As a student in Tokyo, I played on a talented U.S. Embassy basketball team full of Marine embassy guards.
While we were mowing down every opponent, I noticed that the Japanese referees tried very hard to even things out by calling fouls on us every chance they got.
For example, a blocked shot was always a foul.
This is called home-court advantage.
American multinational executives, trying to grow in emerging markets like India, must feel just like we did, as regulators do everything possible to keep them off balance by favoring domestic companies.
This is just one reason you should invest in emerging market multinational stocks.
I call these stocks "boom chips." The best way to describe a boom chip is to contrast it with, what is in many ways its opposite, a blue-chip stock.
Blue Chippers
Blue-chip companies are large, stable, mature companies with slow but steady sales and profit growth, and dependable dividends.
A good example is Kraft (NYSE: KFT) – a bundle of blockbuster brands including Jell-O, Maxwell House, Tang, Miracle Whip and Oreos. Kraft has 12 brands, generating $1 billion each year, and Tang is the most recent addition to this exclusive club. With all of these killer brands aimed at emerging growth, Kraft is expected to grow revenue around 4% a year over the next three years. Not bad for a food giant.
But while a stock like Kraft is a great way to protect wealth, you need to think a bit more boldly to put some sizzle into your portfolio and build real wealth.
You do this by following John Train's advice in his book Preserving Capital:
"Be an adventurer; like the American of a century ago, not his clerkish descendant of today.