INVESTMENT strategies developed for other stock markets rarely work in Hong Kong, K L Law warned the Tai Tai Investment Trust last week. The author of Family Money's 'Diary of a Private Investor' column said theories developed for efficient markets such as New York were out of step with the local stock exchange. For example, the small size of the territory's exchange limited its diversity, causing shares to move en masse. 'There are no really separate sectors in Hong Kong,' he said. 'On a bad day, everything goes down. There's no place to hide.' On a poor day in the United States, in contrast, technology stocks might dive but consumer stocks rise, giving investors more defensive options. Also, local listing rules requiring only 25 per cent of a company's shares to be in public hands put controlling shareholders of Hong Kong companies in an impregnable position, rendering useless one of the most popular US investment strategies. 'Value investing in Hong Kong - and, I think, in Asia in general - doesn't work,' he said. 'You make money here on growth stocks.' Mr Law said many counters on the local market were trading at 50 per cent of book value or less. In the US, these companies would be prime targets of corporate raiders looking to buy them up, split them up and sell them off. But the closely held nature of most Hong Kong companies meant this was impossible, he said.