승인 2016-09-01 15:25
An economic expert who forecasted ‘Hope’ while the rest of the world was insecure after Brexit
Big attention from the leading international press, combined with integrated analysis
Accurate Forecast “Europe, recovers quickly from the Greek experience”
Actual farming experience brings real understanding of market economy
Principal Key Strength, 'Exceptional Real Estate Capability’ 'Hospitality‧Hard Working‧Communication'
Visit to Korea to share market views with investors, but also to listen directly from investors
Optimistic view on South Korean Economy "Despite a few threatening elements such as relationship with its neighbor in the North, South Korea will certainly do well”
[Cheonji-Il-Bo=Song, Tae-Bok] “I was a farmer for a long time. My father and my grandfather farmed. I came to learn in depth of the global markets with an integrated understanding through external economic factors which influenced commodity prices.”
Asked how Bob Baur (Robert F. Baur, PhD) has obtained an integrated perspective in analyzing and anticipating economic trends and movements, who works as Chief Global Economist for a global asset manager Principal Global Investors (PGI) that manages over KRW 750 trillion, our Newspaper has learned a rather surprising answer –live experience in person through farming from early days.
Unlike other economic forecasters who expressed pessimism ever since the June 24th result of Brexit, Bob Baur anticipated quick rebound in Europe thanks to the lesson learned in the Greek crisis.
Financial market was actually astounded when the UK and European economies all recovered by a month, but it wasn’t the case to Bob Baur as he accurately expected as quoted at the Wall Street Journal “the fall in bond yields since the Brexit vote will help the global economy by lowering borrowing costs for governments, companies and consumers”.
He further emphasized that “People may call me delusional, but it is possible the Brexit vote may even help global growth because of the decline in interest rates”.
With great attention from the press worldwide for his accurate economic forecasts, Bob Baur has not visited Korea for more than 7 years. Our newspaper has met Bob Baur to conduct an exclusive interview on various issues such as forecast on Korean economy at the Grand Hyatt Seoul on August 24th.
- Introduction about yourself.
As a Chief Global Economist and a Managing Director at Principal Global Investors (PGI), I am also a Vice President at Principal Financial Group (PFG). I oversee the Economic Committee and am responsible for anticipating global economic trends and market movements by conducting macroeconomic and quantitative research. It will soon be my 22 years at Principal after 5 months.
- Distinctive characteristics of Principal.
Established in Iowa USA in 1879, Principal has always performed consistently across asset classes thanks to its outstanding economic analysis which has fortunately resulted in strong reliability from investors worldwide. With a unique mid-west welcoming culture and the emphasis on close communication, these have become the root of Principal’s distinctive culture – no wonder all of the employees at Principal are hardworking and very kind.
- What would be the objective of this visit to Seoul and the result so far.
Primary objective is to support Brian Shin (Head of Korea – Sales) by visiting clients together in order to provide as much economic views as possible, but also to help those investors by explaining how we see the market today, what we forecast in various areas of economies and what we could share our views in terms of asset allocation in a big picture.
Secondly, another important purpose of this visit is to exchange views with one another, and to listen from the investors directly about their markets and views. I actually learned significantly by spending time together discussing with the investors face to face. I do spend quite amount of time globally on these purposes. We help investors with the solutions by providing valuable information and sharing views on various economic areas in the market, and thus, fundamentally guiding them to solve their concerns on investments.
- Our newspaper is aware of your economic forecast through various international media. They were indeed significantly accurate and were based on integrated analysis. Is there any special know-how for such integrated perspective?
I was originally a farmer in Iowa. My father, grandfather and even my great-great grandfather all farmed. I spent my time in the farm during those days when President Nixon’s Doctrine was in place – the United States exported wheat to Soviet Union and soybeans to Japan. I’ve experienced myself how global economic environment dictates directly on the prices of agriculture.
We would talk about interest rates and currencies on the dinner table regularly, and how those external factors actually influenced our lives in the farm because of commodity prices and revenues as a whole. I naturally understood what and how the commodity prices were determined, and as a result, have become very curious to learn how the world evolved and worked, and ultimately have brought me here today.
- It is interesting that you’ve learned about the importance of integrative perspective from farming.
The Dollar was so strong in the early 80s and the opposite in the 70s. As a farmer, I have directly experienced and learned the real source of economics and markets – we borrowed money from the banks and when interest rates spiked, we needed to understand what this meant to us and in a larger scale, the broad influences on the economy from external factors as well. As global economy has become more and more correlated with the price of commodities,
I naturally got interested in other parts of the world. Because the world is so connected today, one needs to further knowledge and understanding than ever so on markets worldwide, and thus it is essential to broaden the view on global economy from an integrated perspective.
- How do you forecast on Korean economy.
I am not fully aware of Korean economy for now, however one thing for sure is that its economy does have a positive outlook. As an exporting country, it is essential to have positive relationships with those neighboring nations,and Korea is doing well to maintain such close ties in that perspective.
Sure that there is always a foreign policy factors such as the geopolitical conflicts with North Korea as well as the THADD today in the Korean peninsula in relations to trying to take control over the entire South China Sea by China – we still believe that such issues related to foreign relations will be resolved sooner than later.
- Real Estate is a big interest to Korean investors in general, and we’re aware of Principal’s exceptional capabilities in this field. Please share your view on real estate investments.
As far as the United States is concerned, there is the so-called “bubble” in gateway cities such as New York, San Francisco, Miami and LA. However, we still consider other cities to be attractive to investors such as Houston and Seattle. Principal has a large Real Estate department that focuses on the 4 Quadrants.
It is a dedicated real estate specialist boutique that provides investors with plenty of attractive opportunities, and large Korean institutional investors have much exposure to the US Real Estate through Principal’s Real Estate capabilities.
- If asked why Principal should manage on behalf of clients.
First and foremost, Principal has a very strong long-term track record with expertise in various areas of asset class. We are also truly global and well connected worldwide – our offices in the United States, London, Germany, Netherlands, Dubai, Australia, Japan, Hong Kong and Singapore as well as JV operations in Latin America, India, China and Malaysia - all cooperates to work closely for the good of clients.
With local presence worldwide, Principal has a superior advantage with immediate access to valuable information on the ground, as US Real Estate being one of the best examples in identifying good property and providing clients with opportunities for great risk-adjusted returns. In essence, Principal is a very client-friendly organization that values the integrity and client servicing, and all employees genuinely work so diligently.
- A comment for Cheonji-Il-Bo soon facing 7th anniversary.
Cheonji-Il-Bo has grown remarkably well over the past 7 years. I am very impressed with your newspaper’s progress; I strongly believe you will develop further more rapidly. I wish Cheonji-Il-Bo the best, and equally look forward to seeing you again in the near future.
Robert F. Bauer, PhD
Managing Director for Principal Global Investors (PGI)
Chief Global Economist for PGI
Vice Presidentfor Principal Financial Group(PFG)
Ph.D. in Economics from Iowa State University