When Deere & Co. yesterday (Wednesday) reported a 23-jump in quarterly profits, the agricultural-equipment maker said that a 5% sales slump in its North American market was more than offset by a 30% revenue gain in the company’s overseas markets.

The Moline, Ill.-based Deere (NYSE: DE)  – known for its trademark green-and-yellow farm tractors and earthmoving machinery – reported worldwide net income of $537.2 million for the quarter ended July 31 – the highest total ever for that quarter in the company’s history.

“Deere’s efforts to grow a great business, particularly with the support of improving conditions across the global farm sector, are gaining strong momentum and producing powerful results,” said Robert W. Lane, Deere’s chairman and chief executive officer. “Advanced new products and services are helping expand the company’s market presence throughout the world."

It’s earnings season, and one very clear trend has emerged: Global gains trump domestic pains.

Profiting From a Global Focus

They peddle fast food, unite happy children with long-desired Barbie dolls or racy-looking Hot Wheels and Matchbox model cars, or enable consumers to satisfy a “jones” with an icy-cold Coca-Cola or zesty stick of gum. At a time when the U.S. economy is under attack on four fronts – taking direct hits from high energy prices, a weak dollar, a housing slump that’s crimping consumer confidence and a credit crunch that’s threatening to destabilize parts of the world financial system – the U.S. companies that are continuing to show healthy growth are those that can boast of major businesses abroad. And with long-term global growth trends expected to persist for years – if not decades – to come, investors seeking U.S. stocks should give first consideration to globally diversified firms, as opposed to companies that are focused solely on U.S. markets.

The best performers among the recent spate of corporate earnings reports only serve to punctuate this point. The companies that have honed a nice international presence – either across the oceans or at least outside U.S. borders – are generally the firms that have turned in the best results.

Let’s take a look at a few of these global knights.

Consider, for instance, Yum! Brands (NYSE:YUM) — the former PepsiCo spinoff that now consists of KFC, Pizza Hut, Taco Bell, Long John Silver and A&W All-American Food Restaurants — posted second-quarter profit gain of 11.5%, and then raised its corporate profit target for all of 2007. Success overseas is the main fuel for this financial growth, Chairman and CEO David Novak said.

 “This global growth will contribute to Yum! Brands’ seventh straight year of opening at least 1,000 new restaurants outside the U.S.,” Novak said in company’s quarterly report. 

With the recent product recall issues, global toy giant Mattel Inc. (NYSE:MAT) is right now mired in controversy, and even seems to have lost its way. But just weeks ago, the company that controls such powerful global brands as Barbie, Hot Wheels, Matchbox, Tyco R/C vehicles and more managed to post a bigger-than-expected 13% gain in second-quarter profits. And that was in spite of a 3% drop in U.S. sales.

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“While the first half is not particularly significant to the highly seasonal toy industry, our positive results continue to reflect the benefits of our diversified portfolio of global brands,” Mattel Chairman and CEO Robert A. Eckert said of the company’s quarterly financial report.

And when the company bounces back from its problems, its global reach will help fuel the rebound.

For companies such as Mattel, the power of its brands is enough to boost sales in such far-flung markets as Asia, Eastern Europe and Latin America. Aspiring consumers in those regions have known about these particular U.S. products for years – or even decades – but in many cases had yet to actually see one up close. And they’d never before had the chance to buy any of these brands.

The worldwide reach and barrier-toppling power of both the Internet and satellite TV has changed all that. Consumers have for years been able to see what American consumers have. Now that incomes are rising, they can afford to have these goods imported. And U.S. companies are benefiting.

The shrewdest, and most-aggressive U.S. firms are even re-shaping their product portfolios to appeal to cultural and local consumer tastes. Take the Wm.Wrigley Jr. Co. (NYSE:WWY), the global maker of chewing gum, mints, candy and other confectionary products.

Wrigley has long been a global company: It gets 33% of its sales from its home market here in the United States, 45% from the “EMEAI” region  (company-speak for the Europe, the Middle East, Africa and India), and 17% from Asia, and the remaining 5% from its other markets around the world.

The reason this is key:  In the U.S. market last year, a tepid 4% increase in sales volumes led to an even-more-moribund 3% addition to net sales. In its EMEAI region, however, a healthy 14% jump in sales volumes caused net sales to soar 27%. And in Asia, a 21% improvement in sales volumes translated into an even-better increase in net sales of 23%.

But these global gains didn’t just “happen” – they were the result of conscious and methodical moves made by the company, which developed new products and refocused existing offerings to help make the company more competitive in key overseas markets. In China, for instance, Wrigley infused its traditional products with traditional Chinese medicine to create alternative “flavors” — “beauty” gum, “cooling” gum and “relaxation” gum. The result: double-digit growth and runaway market dominance in that product category in China.

“That was some very creative marketing…very avant-garde,said ” Prof. Eugene H. Fram, the J. Warren McClure Marketing Research Professor for the Rochester Institute of Technology College of Business in Upstate New York. “It’s very good marketing in the sense that Wrigley very effectively worked within its segment and then carefully picked out its target. That Wrigley was able to find an opportunity within its segment to create a product that people would buy is a testament to the company’s shrewdness and creativity.”

Bill Perez, Wrigley’s president and CEO, said the company’s “focused investments in key geographies – in terms of product innovation and brand support – are producing excellent results. All major regions contributed to our growth in the quarter, particularly Europe and Asia.”

Some U.S. companies have been “going global” for years. Among the veterans of the international markets: The Coca-Cola Co. (NYSE: KO), which noted in its second-quarter earnings report that “key emerging markets—including China, Turkey, India, Brazil, South Africa, Eastern Europe and Southern Eurasia – all increased at double-digit rates” during the quarter.

Shrugging off the Real Estate Blues

But if you’re a U.S. corporation, global growth isn’t a cure-all for whatever ails you. For example, take Caterpillar Inc. (NYSE: CAT), the U.S. industrial stalwart known for its trademark yellow and black earthmoving equipment. Even though Cat said “continued strength outside North America offsets weakness in on-highway truck engines and North American construction,” it wasn’t enough to keep the Peoria, Ill.-based firm’s profits from plunging 21%.

First, it showed the trickle effect of the real estate plague, which has sacked many other industries — banking, storage, REITs, automobiles, home supply, furniture, property insurance, department stores, lumber, hardware and more. It doesn’t drag them all down equally, but it’s a burden all would love to shed.

And it again proved that international growth and development is crucial, especially companies that can’t fully sidestep some of the U.S. economy’s current ills.

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Global investors should take heed: Japan’s economy continues to be much stronger than it looks.

When the world’s No. 2 economy reported its second-quarter performance on Monday, the figures were largely viewed as a disappointment; they showed economic growth of only 0.1%, or 0.5% on an annualized basis. That’s down from a revised growth rate of 3.2% for the first quarter, and was well below the median estimate of 0.9%, according to a survey of 27 economists surveyed by Bloomberg News.

With growth having slowed even more dramatically than economists expected, investors are fretting that it’s now much less likely that Japan’s central bankers will boost interest rates when they meet for two days next week.

Unfortunately, those fretting investors are focusing on the wrong elements of Japan’s prospects.

The Case for Japan

There are many sound strategies for investing internationally. One, which we advocate wholeheartedly here at Money Morning, is to “follow the money” – that is, ferret out the investment flows that point to the best profit opportunities. Another is to track what other noted global investors are doing, and following in their footsteps.

But one of the best is to pick out a country with terrific prospects, and then look for the best investments that nation has to offer. This so-called “top-down” approach to investing can be quite effective.

Especially when the country in question is as solid and promising as Japan.

In breaking down the second-quarter growth figures, we see that Japan’s consumption growth slowed from a 3.2% rate in the first quarter to a 1.6% rate in the second. Private-sector investment, on the other hand, was strong; it grew at a 4.8% annualized pace, up from 1.2% in the first quarter. (Don’t forget that Japan – unlike the United States – has no population growth, so a 2% growth rate in Japan is reflective of real growth; whereas in the U.S. market, a 2% economic growth rate represents true growth of only 1% – net of the 1% annual growth in the American population.)

Thus, in many respects, Japan’s economic position is the reverse of the U.S. economic position of 2005. Whereas U.S. consumption in 2005 was strong, it’s actually fairly weak in Japan, growing no faster than the overall economy. Conversely, whereas the U.S. economy of 2005 had to struggle against weak investment totals, investment in Japan today is quite strong, as this key Asian nation re-equips itself after 15 years of recession.

Housing, too, was a strong contributor to the U.S. economy’s overall vitality in 2005. But in Japan, it is very weak today, with private residential investment down in the second quarter at an annual rate of 12%.

In terms of government spending – always an interesting area to analyze – the United States of 2005 and Japan of today are uncannily once again mirror images of one another. Whereas public spending was increasing rapidly in the United States in 2005, it is flat in Japan, where public investment actually plunged by an 8.4% annual rate in the second quarter. This accounts for much of the decline in GDP growth, and reflects the tight fiscal policy in the Japanese budget propounded by Prime Minister Shinzo Abe at the beginning of the year.

Public-spending restraint is never popular, but in Japan’s case it is vital to rebuild public finances, and to allow the private economy to increase at a healthy rate. One of Japan’s major problems in the 1990s was that the rapidly expanding public sector was growing faster than the economy, leaving little or no room for private-sector expansion. This position is now reversing, as the public sector shrinks its share of the economy and the private sector correspondingly expands. Japan still has public debt of about 160% of GDP, but most of that is held in various domestic savings funds.

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Some Top Plays on Japan

So it depends what you like. If you like a country where people spend more than they earn, government expands more rapidly than the economy, house prices and investment roar ahead and business investment is sluggish because of massive overbuilding in a bubble a few years earlier, you’ll prefer the 2005 version of the United States.

If, on the other hand, you prefer a country where people save, private consumption is restrained, housing is subdued, the government is keeping a tight rein on wasteful spending, and business investment is booming after a 15-year recession, you’ll prefer Japan. It’s all a question of investor tastes.

I know which way my tastes run. For those who agree with me – and who like to carefully manage their risk – I would suggest the streetTracks SmallCap Japan ETF (AMEX: JSC). As this illustrates, on the whole I prefer smaller companies, which can benefit from continued growth in the Japanese economy without being buffeted by international problems. But there are some very interesting larger plays, too.

Of the larger companies, Toyota Motor Corp. (NYSE-TM) warrants a close look, if only because it’s trading at a very modest 13 times earnings – and because it’s steadily eating the global lunch of U.S. stalwarts General Motors Corp. (NYSE: GM) and Ford Motor Co. (NYSE: F). It’s also worth taking a very close look at Canon Inc. (NYSE: CAJ); while it’s true that this stock is trading at 30 times earnings, which is expensive, remember that Japanese shares historically trade at rather steep valuations.

For the truly adventurous, consider a look at Omron Corp., the world’s leader in fuzzy logic control systems, a business we don’t really have in the West. Alas, in the U.S. market, Omron is quoted only on the pink sheets (OTC: OMRNY). But it does trade actively in both Frankfurt and Tokyo (TYO: 6645).

[Once again we’ve come across a solid overseas stock that U.S. investors can’t easily access. Money Morning newcomers would do well to spend a few minutes checking out two recent research reports: “Global Investing: Has Wall Street Rigged the Game?” and “International Investing: Why U.S. Investors are ‘Boxed Out’ of Big Global Profits.” Both reports are available for downloading directly from the Money Morning web site. And, naturally, both are free of charge.]

Japan: A Play on China

Lastly, whenever you discuss the investment allure of Japan, there’s also the question of China. As we know, China has a bright long-term future. But share prices have been on a torrid run for an awfully long stretch, which I believe substantially elevates risk. Japan is a solid investment in its own right, for all the reasons we’ve articulated [If you’d like additional reasons, you absolutely must check out our 6,000-word investment research report: “Global Investing: The Three Best Investments in Asia Today.” It, too, is available at no cost to subscribers to our free Money Morning global investing news service.] But, for the risk-averse, Japan is a solid indirect play on China (as are the other two markets we detail in our Asia research report). Many of Japan’s major manufacturing companies have established operations in Mainland China, which offers such benefits as lower wages and a close proximity to the headquarters operations of the big firms.

Martin O. Hutchinson is the Chief Global Investing Strategist for Money Morning, as well as an advisory panelist for The Money Map Report. An investment banker with more than 25 years’ experience, Hutchinson has worked on both Wall Street and Fleet Street and is a leading expert on the international financial market.

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Whenever I’m faced with a market like this one – rocky and volatile, with hidden wildcards just waiting to trip us up – I can’t help but think about my late grandmother, successful amateur investor Virginia Gruner, and the warning she would issue in just these situations: “Hold onto your bippies!”

As I sit here and stare at my trading screens this afternoon (Monday) – watching as central banks around the world inject billions into the global economy in an effort to blunt the effects of the spiraling credit crisis – I can just hear my grandmother issue her ever-so-familiar warning.

The Greatest Investor I’ve Ever Known

You see, my grandmother was a super-successful amateur investor.  She’d spent most of her adult life managing her household, the wife of a highly successful insurance-industry executive (my grandfather). When her husband died, my grandmother found that her family’s own finances were in disarray. So with characteristic commitment, and with a resolve I always admired, she set out to become a successful investor. She became one of the smartest individual investors most of us will ever see – and, actually, one of the best investors of any kind I have ever known.

My grandmother then set out to pass that “gift” along – to me. Starting when I was a teenager, she made sure that I always had the entire Value Line investment research series, and annual subscriptions to such leading publications as Business Week and Forbes. She wasn’t forcing this on me, mind you, but rather was sharing it with me – and in a way that made me want to learn all that I could, and be as successful at this wonderfully engaging pursuit as my grandmother.

Yesterday’s late-afternoon trading patterns suggest that her bit of wisdom may somehow be fitting to keep in mind over the next few days. I’m now hearing from traders based both here in the United States and around Europe that the $275 billion injected into the world economies by the global central banks may not be enough.

And, yet, Asia’s traders seem placated.
 
So, what gives?

I honestly don’t know. But here’s what my experience tells me should be happening – as well as what’s actually happening.

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The Global Realities

Somehow, the Euros and Americans don’t trust the system. They think that Monday’s rally is nothing more than a continuation of the short covering and limited bottom fishing that began Friday on the heels of nearly $275 billion in central bank liquidity injections

They’ve got a bad case of: “I’ll believe it when I see it.” And investors seemingly want the ECB and Fed to drop rates as a sign of good faith that things are truly behind us. Yesterday, in fact, I saw no fewer than 20 different news stories, research reports, and market essays from various people suggesting that a “Fed rate cut is in the bag” – which makes me suspect all the more that it isn’t.

Asian traders, on the other hand, seem to think that the massive amounts of money shot into the system was enough to fix the problem.

It’s the way that the Asian markets are trading that leads me to draw this conclusion – that, of course, plus the 20-plus years I’ve spent in and around the Asian markets.

The Japanese and Chinese in particular have a different cultural framework than we rely on here in the West. As a result, the Japanese have a sort of implicit trust in the government as a benevolent entity while the Chinese view it as a strict leader to be obeyed…maneuvered, but obeyed nonetheless. There are, of course, finer points to each but those are more academic than anything else.

In more practical terms, based on how the two camps (the West vs. Asia) appear to be divided in their trading philosophy right now, what we as individual investors are left with is a dichotomy: Roughly half the world’s financial system wants more “liquidity,” while the other half seems content with what it’s got.

Really Time to Go Global

So, who’s right and what does it mean for us?

That remains to be seen. I’m personally of the opinion that we have a long way to go before the extent of the damage is truly recognized. There will undoubtedly be some big names on the chopping block in the weeks to come as more light is shed on this messy credit situation. Some of these revelations will have been anticipated. But others will be huge surprises, and could well roil the markets.

Either way, this suggests to me that individual investors have yet another reason to focus at least part of their financial strategies on global investing (Wharton Professor Jeremy Siegel recently said that an international allotment of under 40% was a “disservice,” as well as a recipe for substantial underperformance).

That said, it’s clearly not enough any more to diversify by country because most of the countries, as so many people found out last week, are inextricably linked at the central banking level.

Therefore, it is vitally important to take a different approach that both lessens your risk and heightens your potential returns. Part of that approach includes lining up your money with the virtually unstoppable trends of our time. The other part suggests “an offensive defense” may be more appropriate now more than ever.

Last week’s financial shenanigans have clearly changed the rules of the game – yet again.

As I reason this all through, I can’t help but consider what my grandmother would say about this situation. The best revenge, of course, is to take advantage of all possible profit opportunities. But we all know that these next few weeks could be highly volatile, which either connotes danger or opportunity – depending upon your viewpoint.

So brace yourself for still more volatility (“hold onto your bippies!”). Then capitalize on whatever opportunities the financial markets throw at you. Look especially closely at global investment opportunities, but don’t be afraid to be opportunistic domestically, either. Be bold, but not reckless.

And have at it!

Good Investing to us all.

 Keith Fitz-Gerald

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“The Prince” has targeted China’s booming hotel sector.

If you’re a confirmed Contrarian, like me, or are merely an avid investor, you already know that I’m talking about Saudi Prince Alwaleed bin Talal Alsaud, the shrewdest and most-successful investor to come out of the Middle East. Prince Alwaleed is best known for the $590 million he invested in Citicorp back in early 1991, an outlay that saved the struggling U.S. banking giant – and that netted the prince a fortune.

Prince Alwaleed’s subsequent financial triumphs are too numerous to list here, but suffice it to say he’s become an investing legend. And now he’s back in action again: The prince is searching for investment bargains in China’s burgeoning hotel sector and has a $1 billion kitty to help finance this latest foray, according the latest issue of Forbes.com.

I’m bringing this story to your attention for several reasons – and my objective with every single one of them is to make you a better investor, with a greater propensity for making profits.
Let me explain;.

The Three Pathways to Profits

If someone offered to tell you how you could profit with virtually every investment you make, would you listen? While I can’t quite make that claim, I can offer several bits of wisdom that will tip the odds well into your favor. And the story about Prince Alwaleed’s latest business venture reminded me of most of them.

To be the very best investor you can be:

• Follow the money, and not the crowd.
• Watch the moves the “real” experts are making.
• And whenever possible, go global.

If you think that these snippets of wisdom are overly simplistic, you’ll one day discover that the best profit strategies usually are. Let’s start by studying why it’s dangerous to follow the crowd;

What Goes Up Can Also Come Down;

While researching my book Contrarian Investing back in the middle 1990s, my co-author and I made an interesting discovery: Probability research demonstrated that, as a group, stocks that have run up a very long way are more likely to decline than to continue their run. Conversely, stocks that – again as a group – have fallen a long way are more likely to reverse course and -rise. If you take a moment to really think that through, the concept makes a ton of intuitive sense.

Indeed, that’s really the entire philosophical basis for the discipline of Contrarian Investing. Members of “the crowd” are more likely to buy the stocks that everyone else is buying – the ones that are soaring right now. And the investing masses are just as likely to avoid the ones that have fallen. But it’s the stocks that have fallen that offer the biggest profit potential, while the shares that are trading at stratospheric levels are the riskiest ones to own. Simply put, the high-priced shares are the most prone to a big decline.

If you follow one of our other key strategies and search out newly developing money-flow trends, you can spotlight investments that either haven’t risen yet, or are just starting to rise. And you’ll pocket the biggest share of the profits when those shares take off, with the accelerating money flows acting as the fuel.

Watch the “Real” Experts

If you have a tough time using this kind of analysis to ferret out such opportunities, take the next best approach and watch what the acknowledged experts are doing. As an avowed Contrarian, I tend to favor value-oriented investors, including such folks as:

• Warren Buffett, the so-called “Oracle of Omaha (If you want to read a terrific book that really illustrates how this super-investor operates, and is also a fascinating biography, take a look at Roger Lowenstein’s: Buffett: The Making of an American Capitalist.
• Bill Miller, manager of the Legg Mason Value Trust mutual fund, and a fascinating and genuinely decent guy who I interviewed many times during my business journalist days (though I was never able to persuade him that Eastman Kodak Co. was a misguided play. Still, any investor who’s a genius, but is still a regular guy who enjoys shooting the breeze at a cocktail party, is aces in my book).
• Jim Rogers, TV personality, world adventurer, author of such best-sellers as Investment Biker, and a noted Contrarian who was kind enough to allow my co-author and me to adapt one of his terrific essays for the “forward” for our Contrarian Investing book. Check out the piece I wrote about Rogers just last month, and make note of the new book he has coming out late this year.
• Prince Alwaleed, whose career I’ve followed since he purchased those Citicorp (NYSE: C) shares at a split-adjusted price in the $1.50 to $1.75 range. His timing was so perfect, and his windfall so massive, that I used his Citicorp investment as a key case study in the Contrarian Investing book. The shares of the largest U.S. financial-services firm closed yesterday (Wednesday) at $49.49 each.

There are others, as well, but I was merely trying to provide a representative overview. You might well have in mind other investors whose style or philosophy is more in tune with your own approach. That’s actually a smart way to go: If you’re not comfortable with a strategy, you won’t stick with it. And changing horses in mid-stream can only lead to you taking an unwanted soaking.

Story continues below…

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Go Global

If you only take one lesson away from this report, make sure it’s this: International investments are no longer a nice bit of diversification, or a way to “spice up” your portfolio. They’re a necessity. You go global – or you get left behind.

Best-selling author and famed Wharton Business School Professor Jeremy Siegel recently pronounced that the long-held conventional wisdom on international investing should be thrown out the window. For decades, we’ve heard over and over how international investments should comprise 5%, 10% or at most 15% of our portfolio’s total value. Any more than that is foolhardy and risky, we were programmed to believe.

But according to Siegel, the truly foolhardy act is to limit our international exposure that much. In other words, the biggest risk we now face isn’t just the possibility of losses incurred when some foreign market plunges. The real risk now is the possibility U.S. investors face – getting left behind financially because most of the major global growth that will come in the decades ahead will be generated outside U.S. borders – by such countries as China, Japan, Taiwan, Korea and Brazil. We’ll even eventually start to see growth from such countries as Vietnam.
Investment advisors who stick with the old asset-allocation model are actually doing their clients a huge disservice, Siegel says.

Siegel now believes that international investments should comprise about 40% of your total holdings. Most individual investors know Siegel for his best-selling book, Stocks for the Long Run: The Definitive Guide to Financial Market Returns and Long-Term Investment Strategies. The book first came out in 1994, and is considered one of a handful of “must-read’ titles in investing finance. But when the fourth edition appears in December, there will be something new to look at: This edition will include a long addition addressing the international arena, and how investors must adapt their strategies to the new realities of globalization.

And Siegel isn’t alone in this assertion that global growth is a huge investment opportunity. From 2005 to 2010 alone, the worldwide value of all financial assets – stocks, bonds, CDs and other investments – will soar from $118 trillion to $200 trillion, according to projections made by the McKinsey Global Institute in a just-released report.

That’s an increase of $82 trillion, or 69%  – and in only five years. And a big portion of that increase will be realized outside U.S. borders. The longer-term projections are even more sobering for investors who have traditionally held themselves to a “U.S.-only” investment strategy. Consider some statistics recently released by the World Bank and several other researchers.

Right now, Asia and the United States each account for about 28% of the worldwide economy. Forecasters say that the U.S. share of the global marketplace will slip a bit, dropping back to 24% by 2030.
But Asia’s share of the worldwide market will double during that same stretch, reaching a staggering 55% by 2030. Think about it this way: The Asia of tomorrow will be twice as powerful as the United States is today.

It’s a transition that’s too powerful to stop. But the next best thing we can do to protect our futures and to advance this country’s standard of living is to personally profit from these trends. It’s the greatest wealth-producing opportunity most of us will ever see. Climb aboard. Or get left at the station.

The nation’s wealthy already really understand what’s at stake and are already profiting from these trends – and in a big way. According to a study by the Spectrem Group, 40% of affluent U.S. households are continuing to invest internationally, while a full third are actually planning to invest more. Their chief country of choice when it comes to investing abroad: China.

Alwaleed Redux

With the $1 billion he reportedly has earmarked for the purchase of hotels in China, Prince Alwaleed has essentially been kind enough to make my case for me. And please note that this isn’t a standalone foray: It’s just the latest piece of a broad strategy in which he’s positioning himself to profit from the newly capitalist markets emerging around the world.

According to the Forbes.com report, Prince Alwaleed is aiming to buy 10-15 hotels in some of China’s small- or even medium-sized cities over the next three to five years. The investments will be managed by his hotel-investment operation, Kingdom Hotel Investments, which is listed in both London and Dubai.

Forbes.com based its report on a story that ran in this week’s Shanghai Securities News, which interviewed Sarmad Zok, the CEO of KHI.

KHI is looking to acquire “mature” properties in China’s second- and third-tier cities, where growth rates will even exceed the quick pace of the already-soaring national economy, Zok was reported to have said.

Forbes lists Prince Alwaleed as the world’s 13th-richest billionaire, with a net worth of $20.3 billion. He has an affinity for the hotel business: He recently announced that he and Microsoft Corp. (Nasdaq: MSFT) founder Bill gates would take the famed Four Seasons Hotels private for $3.8 billion.

Forbes.com also noted that Prince Alwaleed’s recent foray into China’s hotel market follows a profit windfall reaped from a series of Chinese IPOs. Indeed, the magazine said the prince “became a habitual investor” in these deals, including the public offerings of China Merchant Bank, Industrial and Commercial Bank of China and China Communications Construction

And if you go back to my three central investing rules, Prince Alwaleed is clearly telling us that China is a market with such immense long-term potential that U.S investors can’t afford to avoid.
William (Bill) Patalon III is the Managing Editor and Senior Research Analyst for Money Morning, and is also the Managing Editorfor The Money Map Report. A published author, Patalon is an award-winning journalist with 22 years experience that included stints with Gannett Co. Inc. and The Baltimore Sun. He has an MBA in finance from the Rochester Institute of Technology.

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