Thailand: Ground Subzero
In 1990, Dennis Martin, an emerging markets corporate and investment banker with Citibank (later rebranded to Citi), paid a private visit to an antiques dealer in Bangkok. “She showed me a drawing of a building,” he would later recall to the Wall Street Journal. “She said she was going to put up a big office building where her little shop was.”
In and of itself, it was an innocuous enough moment. But against the backdrop of what Martin saw going on elsewhere in the country, it was enough to send up a red flag. That some small-time antiques dealer with no track record as a property developer could aspire to become a Bangkok real estate mogul—even a mini one—suggested to Martin (a veteran of the Latin American currency crisis) that events in Thailand were starting to take an ominous turn.
My own personal epiphany in this regard took place a couple of years later, when at our local broker’s suggestion, we spent innumerable hours trying to reach the outskirts of Bangkok. The afternoon’s assignment was to scope out (as a prospective investment) a sprawling high-rise “new city” that had recently risen up from out of nowhere, on what just months before had been a verdant vista of rice paddies and hand-hewn canals. If we were lucky, our broker breathlessly advised, we might be able to persuade this developer to let us pick up a piece of this action. It was, he insisted, a no-brainer.
Mobius Rule No. 69: When your broker says “no-brainer,” don’t ...