Some notes from the Red Zone Profits.

The Big Dog Brands

Hi everyone!

So I told you I would talk for a while about brand names that are big in S. Korea. Obviously, these are mainly domestic Korean brands, but still, here goes.

As for the non-domestic: a lot of the eateries, mainly fast food or chain restaurants, are American. 7-11, Burger King, McDonalds, Popeyes, KFC - all very prevalent and easy to find. American luxury fashion brands are also very big - Coach, Chanel, all the big ones.

For cars: This is one of a few areas where Korean society is EXTREMELY homogeneous. Virtually everyone drives a Kia or Hyundai, and all in either black or silver. Im not exaggerating - I have video from the highway, and there is not one single car of any color. Weird, huh? So i saw dealerships for all types of car, even completely impractical ones - Hummers (as wide as half an avenue) and McLarens (why own a 200mph car when youre in bumper to bumper traffic all day?) So most people settle for the Kia or Hyundai in the end. The nicer model Hyundai, called the Equus (we dont have them here) resembles the Mercedes E-Series very closely and are quite nice on the inside. Mopeds/scooters are also very very popular, virtually all students and delivery people have them. Im still looking into the best brands for investment. Harley-Davidson has a strong following there as well. More on the cars in the full report.

Like I said last time, for drinks: Korea is the #1 importer in the world of Whiskey (I believe) and #2 for cognac. Hence Ballantines, Jack Daniels etc. are very strong there. This is a drinking culture. Also Soju, though for this Im still looking for the best brand for our purposes.

And then came tech. Obviously, Illsave the elaboration for the full report, because this is my bread and butter. But in sum: Samsung, LG, Pantech/Curitel and oh yeah, more Samsung and LG. They do everything: phones, computers, flat panel televisions, home appliances, the whole gamut - and most people buy from them. In fact, I'll explore it more later but Samsung and LG have sooo many branches - each has convencience stores, brokerages, insruance, credit cards, consumer electronics, home appliances, fashion - the list could go on. I feel like Samsung still has the edge, but LG is very competitive. As a point of reference, I own a 32" LCD tv. The list price is around $4-5000 (thank you online shopping for bargain hunting!). In Korea, a Samsung or LG LCD of similar size would probably run no more than $1000-1500 list price. Yes, domestic brands do have a big advantage.

One more to mention now: SK Telecom. These guys are very important, and I will have a lot on them in the full report. They are already one of the worlds most prominent telecoms (even though they are almost exclusively Korea-only, unlike most of the big Western telecoms). They are everywhere, have the best phones from Samsung and LG to work with, and are the main investor/distributor for a very big new technology called DMB (digital media broadcasting) - basically many channels of live tv and radio, straight to the phone. Like I said, Ill have much more on this in the full report.

And one last point, to make up for all my prior teasing: The meeting I referenced was with Dr. Beomjae Yoo, the Director of the Intelligent Robotics Research Center at KIST (Korean Institute of Science and Technology). KIST has one of the worlds most impressive humanoid robots right now and I learned some VERY incredible things talking with him. More on this in the full report.

Until tomorrow,

Alex Chinn

May 3, 2005 in Alex Chinn in Korea | Permalink

Drinking, Golfing, Betting, and Betting on Drunken Golf

Hi everybody!

So last time I told you that today I'd examine some of the cultural trends I noticed so far in Korea. Most of these are pretty apparent to the naked eye just from walking around Seoul. Some of them also require a decent amount of research to capitalize on.

Today I'll tell you about some of the ones Ive noticed. When the full report comes out next week, I'll have specific companies that we can use to profit from them.

So where to begin? It seems like there are two main preoccupations outside of work for the average Korean. These are the two main leisure activities around here: drinking and sporting. OK, now that wont sound too far off anywhere in the world. But there are specific modes that are prevalent in Korea for these two outlets.

Drinking is serious business here. This is a drinking society, where the amount of soju (local liquor, like sour vodka) consumed weekly is equivalent to five litres for every man, woman and child in the country. Business meetings often involve getting college-age drunk. Aside from local drinks like soju, the main foreign drinks around here are whisky and scotch.

Second, I mentioned recreation and sporting. There is plenty of individual sporting activity around here; travel the city and youll see plenty of people rollerblading, cycling and playing soccer. There is a good deal of viewership for baseball, European soccer, basketball, rugby and billiards as well. However, it seems that the Koreans like no sport more than golf. There is a dedicated 24 hour golf channel. Every hotel has a driving range. And it seems that there is AT LEAST one golf store on every block. Tiger Woods is the new Michael Jordan - his face is EVERYWHERE here.

One other thing that whets the Korean appetite- gambling. Again, this is not uncommon anywhere in the world. However, it is remarkably prevalent here. I like to gamble myself, and before I left I asked a Korean friend if there were any casinos in Seoul. He gave me that slow blink that indicates "I cant believe you even had to ask". There are no less than two dozen full casinos here, with another dozen in the works. More frequent are small betting parlors on almost every block, usually featuring only slots with the occasional horse betting station.

Thats all for today. Tomorrow Ill have some info on important brand names that hold a lot of sway in Korea. Some you may know already, some you may not. Remember, in my full report Ill detail how to profit from the trends I've talked about here.

And as one side note, my inside man has informed me that the big surprise has come through! I have one of the most exciting meetings of my life coming up soon; I just hope they'll let me take photos! I'll have details on that once it happens; I dont want to spoil it in advance!

Until next time,

Alex Chinn

April 28, 2005 in Alex Chinn in Korea | Permalink

Yoboseyo! Welcome to Seoul!

Yoboseyo Everyone!

Well, here I am in Seoul. Between the jet lag and running around town, Im a little behind on this blog. I'll update daily for the next business week to make up for the delay.

Today, Ill just talk a little bit about Seoul - the city, the people, the general stuff.

I arrived at Incheon Airport and took a 40-minute ride to the heart of Seoul. That might actually be a bad way of phrasing it; there is not definitive heart to Seoul. The city is a lot like New York - there are several boroughs, each separated by river and highway. The difference between here and NYC is that all of the boroughs are huge - no Staten Island here! Each holds a few million people at a population density that one comes to expect from a buzzing Asian metropolis.

The city is huge and extremely difficult to navigate without the use of taxis. I mastered the London Underground in two days, but the subway here is more than I could learn in a month.

As for the people, they have for the most part been very friendly. Virtually nobody outside of the hotel has been able to speak English. The Kazakhstani bartender I met last night told me that I was only the second American she'd ever seen in her bar - which is on a main avenue, just two blocks from my hotel (and several other major hotels!) Despite the de-isolation of Asia that has occurred in the last few decades, this is still a very closed society. I have yet to see any non-Asians on the streets, except in the hotel (I expect this will change when I visit Itaewon, the foreigner area over by the US military base). However, the use of the English writing is everywhere - many signs, billboards, even business names are in English! Most are in some mix called Konglish, with one or two English words surrounded by Kangul (Korean) script. Those that are in English completely rarely make sense - my favorites so far have been "Bang Bang Plaza" and "Real Estate Fortune Tellers". It seems many more Koreans can read English than can speak it.

Tomorrow I'll have details on social trends that we investors can capitalize on, plus a few notes on companies that I've encountered. And just to be a tease - my inside man here in Seoul may have arranged a VERY special surprise for me and for all of you. Ill have details on that in the next day or two.

Until tomorrow,

Alex Chinn

April 27, 2005 in Alex Chinn in Korea | Permalink