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Power of Capital: An Adventure Capitalist’s Journey to a Sustainable Future
Asha Mehta
Wiley (October 2022)

How to thrive in “the fastest-growing, most dynamic markets across the globe”

In layman’s terms, an emerging market is one in which an increasing number of people buy, sell, or trade. The community could be local, regional, national, or international. Marketing creates or increases demand for whatever is bought, sold, or traded. W. Chan Kim and Renée Mauborgne would describe it as one that requires a “blue ocean” strategy. That is, “the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. It is based on the view that market boundaries and industry structure are not a given and can be reconstructed by the actions and beliefs of industry players.”

Asha Mehta points out that technology is key among the drivers of the emerging markets’ growth. Moreover, leveraging machines has brought substantial benefits in terms of objectivity, scalability, and cost. “I know. I have been a global quantitative investor for more than 20 years, using technology to cover tens of thousands of stocks and more technology to build portfolios with hundreds of stocks. This infrastructure has enabled me to invest capital in the farthest corners of the globe, in tiny increments that reach down in the poorest countries’ penny stock companies, all because of technology.”

Her wide and deep experience as well as her highly-developed analytical skills have prepared her well to explain, as she does brilliantly in this book, HOW to thrive in “the fastest-growing, most dynamic markets across the globe.”

Since childhood, I have viewed my favorite books as “magic carpets” that would transport me to foreign places and ancient situations that I could not otherwise experience. Why was Achilles so special? What was Christmas like in Dickens’ London?

In or near the downtown business district in most major cities, there is a farmer’s market at which — at least until COVID — merchants have offered fresh slices of fruit as samples of their wares. In that same spirit, I now offer a representative selection of Mehta’s comments to suggest the thrust and flavor of her thinking. Your carpet awaits….

o “As China’s onshore market emerged, I couldn’t resist the challenge. With the impressive breadth and depth in the local market and its vast mispricing, I could find copious opportunities for investment. In established, developed markets, ‘unicorn’ stocks — those with attractive growth prospects, good management teams, and yet an underpriced valuation — were hard to find, but in China, the opportunities seemed almost ubiquitous.”(Page 14)

o “After the week in Vietnam, I felt that my visit was successful. The ethos and vitality of the people I met validated the data showing a favorable emerging market environment, although I had an understanding of the risk to my thesis. [A journalist’s whispered words re government suppression and corruption] haunted thoughts, but once I turned the model to account for corruption and related risks, Vietnam was irresistible. Ultimately, I would invest, but over time. I’d shift exposures more toward Vietnam’s thriving consumer sector.” (41)

o “That evening I got back to my hotel feeling optimistic. The renewable technology revolution was alive and well in SSA [sub-Saharan Africa] But I was jolted back into reality when all the lights went out. As the whirring of the generator blended with the nocturnal sounds of nature, I was reminded that more than two out of three people in SSA still had no access to electricity. I couldn’t help but think of all the people who could not afford backup electricity generators; children with no lights to study and hence break free from the cycle of poverty; the adults holding onto phones with dead batteries, unable to access their banking apps; and all the local hospitals unable to perform emergency surgeries.” (115-116)

o “Sustainable investing calls on investors to appreciate the dual purpose of their capital to generate a return for the investor and to use capital to build tomorrow’s ecosystem. Investment portfolios are ‘future fit’ when they’re invested to drive profitable returns not only today but also a generation ahead. With today’s technology and sensibilities, we can build portfolios that reinforce climate mitigation, ensure social stability, and promote strong governance norms.” (177)

Those who share my high regard for this book are urged to check out two others: Handel Jones’s When AI Rules the World: China, the U.S., and the Race to Control a Smart Planet (Bombardier Books, October 2022) and Steve Brown’s The Innovation Ultimatum: Six Strategic Technologies That Will Reshape Every Business in the 2020s (Wiley, February 2020)