About

This website is where I post my investment letter to clients; institutional and professional investors. “Emerging Markets Illustrated” is a platform for me to examine interesting, or downright stupid, developments in finance and global affairs. EMI is published weekly (weakly?) or whenever I see something worth pointing out. The opinions are my own, as are any errors or evidence of bad judgment that creep in.

My bio, for those interested is below.

Call me Ishmael. My real name is Derek Hillen and I was not born to finance. Rather, I grew up on an avocado farm in southern California and spent my youth hoeing weeds, swatting flies and killing rattlesnakes. I wasn’t very good at math either and a career on Wall Street seemed about as far away as Saturn on a cold night.

Escape to Montreal

I fortunately was able to escape to Canada, attending McGill University in Montreal, thanks to the fact my Dad is Canadian and since he was an airline pilot I flew for almost free. Once there, after taking my first economics course – and failing – I decided a liberal arts education was for me.

I ended up living in a French-speaking city and majoring in East Asian Studies, mainly because I thought Bruce Lee was pretty cool.

Taiwan and China

During my time at McGill, I had to take introductory language courses in Mandarin and Japanese. These were tough subjects but I found them interesting and after graduation I went to Taiwan to continue learning Mandarin. This was in the mid-1980s and mainland China was just opening up to foreigners studying there. At that time, Taiwan was a much better option for a starving student because it was more advanced and you could get a job to support yourself.

There were no jobs in China then and everyone who was anyone had a bicycle. And aside from a blue Mao jacket, that was about it. Although I always have a soft spot in my heart for Taiwan, I would recommend a young person today to go to China to learn Mandarin and see from the ground up what is really happening there. It ain’t what you read in the newspapers.

Trans-Siberian Express

After two years in Taiwan, I did some travel around China and a buddy and I took the Trans-Siberian Railway from Beijing to what was then East Berlin. This was in November, 1988 during Gorbachev’s “Perestroika” and “Glasnost” era. Russians of Chinese descent were for the first time since the revolution being allowed back to visit distant relatives in northern China.

They came, they shopped and they left – bags bulging with VCRs and other home appliances that China was just beginning to produce en masse but which the USSR, despite its bombast, couldn’t figure out how to do. I spent many evenings drinking vodka with these Chinese Russians as the train chugged across the snow covered Siberian steppe, conversing in Mandarin and learning what was going on in Russia. It was fascinating.

The World of Pain

After travelling around Europe for a few months I decided to go to Japan and study for a few years. I picked Sapporo, on the northern island of Hokkaido and home of the beer of the same name. That sounded good to me. I spent three years there learning traditional Japanese karate and getting the shit kicked out of me by Japanese nationalists. I also learned to speak Japanese; mainly useful stuff like, “Where is the nearest hospital?” and “I think it’s broken.”

The End of the World

Alaska was calling and I had long had an interest in the area so I limped out of Japan and returned to the US. I bought a used Goldwing motorcycle and rode solo up the AlCan Highway 4,000 miles to Alaska to find work. I ended up living in my tent on the tundra in Naknek, Alaska and working in the local supermarket.

My job was to scrape bubble gum off the floors after closing. (Hey, it paid surprisingly well with overtime). Naknek was in the middle of nowhere and the locals were fond of saying, “Naknek ain’t the end of the world but you can see it from here.” Yep.

Two years later I was back in Alaska on another motorcycle and this time found work on a salmon seiner on Kodiak Island, home to the world’s largest bears. We worked the shore inside the bear preserve. It was like living in Jurassic Park. You were not even allowed to go to the outhouse without an elephant gun in hand. In the morning you could see bear prints in the mud the size of trashcan lids. These really were flesh eating monsters.

How I Got Into Finance

I didn’t catch much fish so I wound up back in Taiwan looking for another English teaching job. This was early 1993. I went to an interview at a brokerage firm. I didn’t know what that was, but they were looking for someone to “correct financial essays once a week.” It was work and beat scraping up bubble gum and living in a tent. I showed up in my only suit and only tie to the interview. Here is what happened:

Them:Are you here for the broker’s job?”

Me:The what?

Them:The broker’s job where we will train you to be a stockbroker and send you to Singapore and Hong Kong.

Me: Yes. That’s me!

And I never looked back. Yung Kao Securities was a local Taiwanese brokerage that was going international. They did train me – all in Chinese – and they did send me to see clients in Singapore and Hong Kong. I had to stay at the YMCA and eat at McDonald’s on my business trips and was earning $1,000 a month. My rent was $500 a month. It didn’t matter; this was a huge opportunity and opened up a whole new world for me. No more teaching English, no more gum scraping and no more catching fish.

I worked hard for those two and half years there and was hired away by SG Warburg and sent to New York in 1995. The farm boy with no real skills had landed on Wall Street. SG Warburg was bought by Swiss Bank when I arrived meaning I was probably the last person hired under the venerable Warburg name. Swiss Bank soon thereafter completed a reverse takeover of a larger rival and adopted their name: UBS.

I have been a stockbroker ever since. I worked at UBS for 7 years in New York and in Taiwan. I also worked at CLSA in Hong Kong for 4 years and then at Mirae Asset Securities. I have taken two different sabbaticals over the last 18 years to do what I love most: long distance sailing. Aside from that, I have been broking the North Asia/China story for the whole time. After six years of grinding it out in Hong Kong, we have just relocated to Seattle. I still work for Mirae and the clients I cover include senior portfolio managers at some of the big mutual fund houses as well as hedge fund managers and principals.

I am now happily married with two small children.