POSTCARDS FROM THE EDGE OF CENTRAL ASIA, WHERE, IF IT’S TUESDAY, IT MUST BE YET ANOTHER TELEPHONE INVESTMENT OPPORTUNITY: WISH YOU WEREN’T HERE

On some trips you learn what not to buy. I joined 25 investors and some executives from Global Securities Inc., an investment brokerage in Istanbul, Turkey, for a weeklong tour of central Asia with stops in Baku, Azerbaijan; Bishkek, Kyrgyzstan; and Almaty, Kazakstan. Not surprisingly, the fact that so many people have been willing to trek to the ends of the earth coincides with the discovery that there is little to buy.

Even so, we learned many useful things about obscure markets. A brief diary of the trip:

Azerbaijan has all of 7 million people. While many companies there have been slated for privatization, the only one that looks attractive on the surface is State Oil Co. of Azerbaijan, known as Socca. An American oil man says that in his opinion it would be difficult to pay too much for the oil company, given its massive reserves. Unfortunately, it isn’t clear if holders of so-called privatization vouchers would be able to bid for Socca, as this will be decided by presidential decree.

Our chartered Turkish Top Air 727, with two crews totaling 14 people (pilots can only fly so long per day), heads two hours eastward to Bishkek. I’m going to a capital city I’ve never heard of.

Bishkek, formerly called Frunze, is the capital of the landlocked secular Moslem state of Kyrgyzstan, out in the steppes, just north of the northwestern Chinese border. The town is not distinguished. Most of the capitals of the old Soviet republics were designed in the same fashion: a white house for the government, a statue of Lenin, a plaza in memory of World War II heroes. Bishkek moves slowly — elsewhere in the old Soviet Union all the Lenin statues are gone.

There is a rundown kind of department store, a variation of the independent ones you occasionally find in old midsize American towns. It is good to know that Japanese electronics and foreign videos are available, in case I ever get stuck in Bishkek.

Just as in other stops on our itinerary, our group receives a series of presentations on the economy, including the inevitable phone company development. One woman cut the Gordian knot of security analysis and made an observation: “No one is ever, ever going to call Kyrgyzstan.” In any case, while valuations are low, they are not necessarily low enough.

Approaching Almaty, the capital of Kazakstan, air traffic control gives our pilot incorrect altitude data. Not very comforting.

Unlike the other countries, where we breezed through immigration and had our passports delivered to us the next day, in Kazakstan we must fill out Russian forms in duplicate telling of our jewelry and cash. This is useful for the customs officers, who shake down businessmen and tourists for $10 or $20 with invented penalties and nonexistent taxes.

We stay at the Ankara Hotel, which not surprisingly is run by Turks. It captures the quality and service of a very good Hyatt.

Kazakstan doesn’t have a stock exchange yet (neither do the other countries we visited). But in our group, some already hold Kazak stock. There are several ways to do this. Some stocks trade over the counter. You simply send money to Global Securities, and it acts as your broker and custodian and holds the stocks for you. Four Kazak oil companies had been auctioned off earlier in the year. They had gone up about 800% and are now bid only.

The head of the National Securities Commission, who has just resigned, addresses us. He is trying to use his resignation as moral suasion for the government to hurry up the creation of a stock exchange, and to create it correctly. Three things bothered him:

* There has been no approval yet of tenders to buy the companies slated for auction. Why should this be? After all, there are several anxious bidders, and regulatory procedures are in place.

* The legal framework necessary for shareholder protection, mergers and acquisitions, hostile takeover procedures, etc., has not been completed.

* A draft has been put forth changing the composition of the board of the National Securities Commission to have four outsiders on a board of seven — outsiders who might be cronies of the government.

We fly to Pavlodar, a city of about 150,000 somewhere in the north of Kazakstan. The city looks desolate. We have police escorts for our buses to the city hall, with journalists in the back and the deputy governor in the front. There are speeches thanking us and speeches by Global Securities thanking our hosts for thanking us.

The deputy governor then begins to read a speech in Russian, for which we have an English translation. At first our interpreter translates frequently, after several sentences. This is halted, and the governor just reads away in Russian. In the speech, the word “portfolio” is translated as “bags.” We “international bags investors” are obviously being given the big hello. The region’s big selling point is that it is conveniently located at the crossroads of southwestern Siberia.

We go to the local refinery. After three days of arriving in places after midnight, staying up till 2 a.m. drinking — I am a wimp, my fellow travelers were up until 4 or 5 — the pace is getting to some of us. I preferred to sit in the back row. The companies are not accustomed to nosy foreign investors, and information is not something to be shared willingly.

Karaganda, a Kazak city of about a million people, has built a big airport, obviously designed by the finest Russian airport architects. There are only a couple of flights a day. The Karagandans have decided that if they make access to their distant land easy, then foreign investors will flock there. This is the “If you build it, they will come” method of attracting direct foreign investment.

In the area, there are homes suitable for families of one, and pens for livestock. But there are no people. It appears to be a huge ghost town. Had these been labor camps in the past? Hard to know.

The new freedoms have led to some tastelessness in decor. A bus we take for our investment tour has a large poster, protected by plastic, of an attractive blond nude in some tropical clime. Two fund managers seated just in front of the poster are forced to stare at the young lady for the duration of the ride.

One destination is a steel factory taken over by an Indian multinational, a global organization called Ispat International Group, which is trying to turn it around. It is massive; a vast expanse of land is covered by pipes, tubes, factories and smokestacks, producing 4 million tons of hot rolled coil.

Members of the group ask the usual questions about quality, sales, pricing, financing and transport logistics. I ask why there is an elite force of six camouflaged guards with automatic weapons hidden under their vests manning each entrance to the room. I am told it is out of respect for us foreign visitors.

My trip nears its end. At 1 a.m. on a Friday, I am in the basement disco of the Ankara Hotel with the remnants of the group, waiting for dawn and our 5: 00 flight to Germany. The others have taken a Turkish charter to Istanbul. There are five bleary-eyed investors and in a few hours we have to leave for the airport. The long-awaited floor show begins, with scantily clad women in quasi-native dress. After half an hour, a magician appears. He selects me as his helper and I walk on stage. He puts a silly tuxedo jacket cum apron on me, but secures my arms to my sides with Velcro and stands behind me with his hands through the sleeves, so that he is the hands and I am the head and body. We do simple magic tricks. Afterwards, the topless dancers come out. To honor me for my ordeal, they each sit briefly on my lap. It is time to go home.

Jim Bogin is president of Legend Capital Management Inc., which manages a private global value fund, and he is a Japan analyst for Matthews International Capital Management LLC, a mutual fund manager specializing in Asia. Both firms are in San Francisco.