Did
you know that college kids in France have been
burning American flags for more than thirty years, and it has had little or
no effect on the French stock market, or foreign investment into the French
stock market? Investors are
never interested in what college kids are doing. All they really care about is what
grown-ups who manage listed companies are doing. Korean government officials have an
unfounded fear that anti-Americanism will hurt Korea’s economy and stock
market. The only thing that
really counts is “pro-Korea-economism,” not
anti-Americanism. As long as
Korean businesses are allowed to thrive and prosper, its economy will grow,
and its stock market will go up – no matter how many square meters of red,
white and blue cloth burn up in the streets of Seoul.
Did
you know that, despite the fact that Korea has the world’s #1 steel maker,
the world’s #1 ship builder, and the world’s #1 memory chip maker, its
system of unemployment insurance is terrible, at Latin American levels or
below? With a
the best fiscal balance of any Asian country, why is the Korean
government so stingy with its unfortunate unemployed? Why are Korea’s
overflowing tax coffers used to prop up insolvent banks and businesses,
when so many unemployed are hurting so much?
Did
you know that labor-management negotiations don’t really exist in Korea? That’s because any negotiation
requires two parties with leverage, and in the case of Korea, one
party has no leverage at all.
In labor-management negotiations, it is critically important that
labor has the ultimate power to go on strike for an extended period of
time; in fact, it must have the power to destroy the business
altogether. By the same token,
management must have the ultimate power to fire its workers altogether and
replace them with a new workforce.
Henry
M. Seggerman
(pictured) is President of International Investment Advisers, an investment
management company which has focused exclusively on the Korean market for
ten years, registered with the Financial Supervisory Service for Korean
clients and with the Securities and Exchange Commission for U.S.
clients. As of August 25, 2003,
this year its Korea International Investment Fund is the top-performing Korea
equity fund amongst 65 which are tracked by Bloomberg. The fund has a five-year annualized
return of 28% and in its lifetime has outperformed the KOSPI (in US$ terms)
by 238%..
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