Key Themes in Asia - Fritzell Oct 2026

# Key Themes in Asia - Fritzell Oct 2026 Asia has split in two. East Asia trades the AI capex boom. Southeast Asia trades as cheap, unloved value. - Author: Michael Fritzell, Asian Century Stocks. Deck dated 20 Oct 2026.^[Michael Fritzell, "The Key Themes in Asia", Asian Century Stocks, 20 Oct 2026. [[The_Key_Themes_in_Asia.pdf]]] - Visual summary: [[Key Themes in Asia Diagrams.html]] ## The map ```mermaid flowchart LR AI["US AI capex boom debt-funded"] --> EA["East Asia Taiwan, Korea, Japan high CAPE, crowded"] USD["Expensive US dollar"] -.-> EA CN["China deflation"] --> EX["China export boom autos, chips"] KR["Korea reforms"] --> KV["Korea deep value"] ID["Indonesia politics"] --> IC["Cheap Indonesian consumer stocks"] INS["Insider buying KR, HK, TH, ID"] --> SEA["Southeast Asia + HK low CAPE, neglected"] IC --> SEA EA --- RISK{{"Bubble risk"}} SEA --- OPP{{"Value opportunity"}} ``` ![[Key Themes in Asia Diagrams.html]] ## Five themes 1. [[East Asia vs Southeast Asia Divide]]: Taiwan +197% since 2022. The Philippines -21%. 2. [[AI Bubble - Ponzi Finance Stage]]: hyperscaler free cash flow is near zero. Debt now funds the capex. 3. [[China Credit Shift to Exporters]]: credit moved from property to factories. Exports boom. Prices fall. 4. [[Korea Discount]] and [[Korea Corporate Value-Up Program]]: 52% of Korean stocks trade below book. Reforms target the causes. 5. [[Indonesia Political Risk 2026]]: policy errors crushed the market. Consumer stocks are now cheap. ## Fritzell's conclusions - East Asia holds the AI capex stories. Southeast Asia holds the value. - Fund managers are overweight AI. AI capex depends on debt. - The US dollar is expensive against East Asian currencies. - Insiders buy heavily in South Korea, Hong Kong, Thailand and Indonesia. - China has serious deflation, but its exports boom. - Korean reforms are real. They help deep value stock pickers. - Indonesia is a political mess, but consumer stocks show value. > [!note] Author's positions > Fritzell owns Photosynth, Philippine Seven, Avia Avian, Air Water, NICE Information Service, Samart Aviation and Carabao. Most are Southeast Asian or Korean value names. His "value" view and his book point the same way. > [!question] Open questions > - Which breaks first: hyperscaler balance sheets or the dollar? > - Does Korea's discount close before or after an MSCI upgrade? > - How does this change my [[AI Capex Super-Cycle]] positioning? ---- tags: #boat #investing #macro links: [[Asia Macro MOC]] [[Investing System MoC]] [[AI Capex Super-Cycle]] [[Sep 25 Market Gauge]]