Adapt


* International Investments – Adapt

* Ecuador Real Estate – Fight Inflation in the Galapagos

* Natural Health Tip – Summer Sweet Mango Lassi

Many recent computer models show that Scandinavia seems to be most resilient to ecological and human impacts of climate change. Indeed in the mid-term, numerous cold places, like Britain, Canada and Scandinavia will likely benefit from climate change, with longer, warmer summers, safer climate and increasing crop yields. The same goes for parts of the northern American continent. So we are looking at ways to invest North!

Should we? The idea of global warming is controversial. We can see how our readership was polarized from the recent messages about global warming. One reader wrote: “Hi Gary………just a note to say what an absolutely fantastic newsletter re synchronicity. I regret that I have not had the opportunity to included you and Merri in my circle of personal friends. Best”

Yet another said: “Gary, Please unsubscribe me from your newsletter. That you have bought into the global warming myth as espoused by such scientific notables as Kofi Annan (Kofi Annan of the UN Oil Dollars For Food scandal??) has caused me to lose faith in your prognostications. Bo Gritz got his famous quote ‘The color of communism is no longer red. It’s green.’ from me in Texas in the early 90’s. Still true today. Global warming is yet another attempt to bring down the US and its middle class- without which there will be no free and independent republic (actually, there isn’t much of one left now). Good luck.”

The second reader missed the main point of the messages which are about synchronicity not global warming. The real point was since five seemingly unrelated events all took place within days, I should share the data whether it made logical sense or not. I tried to point out up front that my greatest profits have always come in this was…by accident, just stumbling along and suddenly finding myself in the right place at the right time.

Having said this, the disgruntled reader gives us a valuable lesson, not to close our minds. We can see this in two ways. First, he apparently missed the whole point of what was hopefully a valuable message because his mind was locked on fighting the idea of global warming.

Secondly, we can see that the group belief today is that there is global warming.

However this is a controversial thought and messages at this site have pointed this out before. In 2003 a message at this site told how I was a speaker at a Jyske Bank seminar with Bjorn Lomborg, author of the controversial book the “Skeptical Environmentalist.”

That message said: “Bjorn is an environmentalist himself but says in his book that we might want to reconsider where we place our environmental priorities. He does not feel that doomsday is close or that we have to act in desperation. His speech pointed out that things really are getting better and we have more leisure, greater security, fewer accidents, more education more food, fewer starving and healthier and longer lives. He showed many impressive charts supporting these facts showing how the calories per day per capita are growing everywhere. He showed how cancer deaths are down and that 35% of cancer is related to bad eating habits and 30% to smoking and only 2% pollution. He also asks the question of whether we have enough resources and shows that oil reserves have actually grown as prices of commodities have dropped (indicating an ever increasing supply in relationship to demand). There are also some impressive statistics that suggests that global warming is a limited problem that will wane as we stop using fossil fuels, (not whether but when). He also suggests that continued loss of the rain forest will not dramatically affect the world’s oxygen supply” See the whole message Healthy Investing = Wealth # 15

Plus in 2004 a message at this site reviewed Michael Crichton’s book “State of Fear” book which also seriously questions the Western World’s approach to global warming.

So we must ask several questions. First is there global warming? The answer is undoubtedly, “Yes for now” Second, is this caused by the human impact on the environment or is it just part of a natural trend? Third, will this warming trend continue? These last two answers we do not really know.

Fortunately we do not have to know answers to these questions.

Crichton explains why in State of Fear. He read environmental texts for three years researching this book and states that this research concludes we are in the midst of a natural warming trend that began about 1850 as we emerged from a four hundred year cold spell known as the Little Ice Age. Yet the research shows that mankind knows astonishingly little about every aspect of the environment.

Crichton says: “Atmospheric carbon dioxide is increasing and human activity is the probable cause.”

The point in writing all this is that we really do not know and Crichton agrees with this when he writes “I am certain there is too much certainty in the world.”

Certainty is an illusion of logic and this is what this entire series is about…synchronicity, ie. acting on events no matter how illogical they present themselves.

Even though the thought begins without logic investing north has been incredibly profitable this decade.

Based on uncertainty let’s look more at opportunity in northern climes. We may not know what the weather will do in the years ahead, but we can guess pretty accurately what society will believe about the weather for some years to come. There is a great chance that there will be a belief in global warming whether it is a reality or not.

So we should take advantage of this and follow the last of the seven clues we have been reviewing which is to adapt and adjust!

One northern area this site has been promoting for years is Scandinavia. Yesterday’s message showed us how to create a MultiCurrency Sandwich in top quality bonds and earn as 6.91% per annum and perhaps even more. See Go Nord Young Man

Now let’s see how we can enhance this sandwich with Scandinavian equities.

The Danish market is down 3.3% this year and Sweden is up only 0.5% in local currencies. These two markets are the worst performing major markets this

year. This can be good. Buying in down markets (as hard as it can be to do) is often a great way to maximize returns.

The sense is that these are strong, stable economies with low inflation. Consumer prices are up 4.1% in the US compared to 1.7% in Sweden and 2% Denmark. Plus the Danish and Swedish currencies have been strong. If we look at these two markets in US dollar terms Denmark is up 5.3% and Sweden 11.4% for the year. Finally they are easy to invest in. Jyske Invest has a Danish and Swedish equity fund.

The Jyske Invest Danish Equity fund is up from 255 kroner in December 2005 to 275 kroner per share August 20, 2006 and has risen from 85 Danish kroner to 285 since inception in 1997. That’s a rise of 235% in nine years or about 26.14% per annum.

Some of its major holdings include Noro Nordisk, Danske Bank, Jyske Bank, Maersk and Vestas the windmill maker. You can read all about this fund at Jyske Bond and Equity Funds

Jyske Invest’s current outlook for the Danish market says: “Danish equities remain attractive, and in August several companies will present their half-year results and outlook for the remainder of 2006. Earnings continue to increase and we consider the low level of prices a good opportunity to buy. Once the situation in the Middle East has settled down, we expect prices to increase again. Interest is spurred by favourable accounts and the many taker-over bids from private equity funds. A number of the companies are over-capitalised which increases interest in buybacks and the acquisition of other companies. Corporate sector debt ratios are low, and earnings high. Rising interest rates may cause some unrest, but what is most important is still an increase in corporate sector earnings. Danish equities are no longer cheap, but the quality is high and liquidity abounds and thus supports the market. We still prefer companies such as NKT, Topdanmark, Group 4 Securicor, Nordea, Jyske Bank. Alm Brand.”

The JI Swedish Equity fund is up from 185 Swedish kroner to 195 this year and has risen from SEK95 at its 1997 inception to SEK 195 now. That’s a 105% rise in nine years or about 11.66% per annum.

The top holdings include Ericsson, Nordea, Telia Sonera, Volvo and SE Banken. You can read more about this fund at Jyske Bond and Equity Funds

Jyske Invest’s current overview on the Swedish market is “We are still cautiously optimistic about the future. A sense of unrest has returned, however, and is not likely to disappear overnight. We expect slightly rising prices and for fluctuations to intensify. When picking companies for the fund portfolio, our primary concern is that the company is attractively priced and that earnings have persistently exceeded expectations. Among our current favourites are SSAB, Alfa Laval, Boliden and Carnegie.”

Let’s look at what happens assuming that these funds perform at the same average as they have for the past nine years. We have no way of assuring that this will happen. Growth could be more or less, but this at least gives us a calculation to start with.

Let’s see what happens to growth if we leverage a MultiCurrency Sandwich investment two times. Assume we invest $50,000 and borrow $100,000 in Swiss francs at 2.75% interest.

$Amount Currency Fund Annual Growth Annual Income
$75,000 DKK Jyske Invest Danish Equity Fund 26.14% $19,605
$75,000 SEK Jyske Invest Swedish Equity Fund 11.66% $ 8,745
Less        
Amortized cost of loan   200
Amortized fund purchase cost   100
Amortized forex cost   65
Interest at 2.75%   $2,750
Total costs $3,115  
Net Income before forex shifts $25,235  
    Yield Per Annum 50.47%  

There are a lot of assumptions built into these calculations, but this is what would have happened if you had this portfolio since 1997. Plus of course there is potential profit in (and or loss) in shifts in the parity between the Swiss franc and the Danish and Swedish kroner.

Join Merri, Thomas Fischer of Jyske Bank and me at our next International Business and Investing Made EZ course in North Carolina. Review updates on Scandinavian economics. Learn fundamentals that show where to invest and do business now. Learn which markets and currencies may be strong in the year ahead. Meet Steve, our man in Ecuador, and learn about products to export. Go to International Business Made EZ Information

Double your profit potential with the MultiCurrency Sandwich. Learn how to leverage investments in top value markets. See Borrow Low- Deposit How to Use the Multicurrency Sandwich information

Our sites are based on the concepts that the sun always shines somewhere. But where will the sun be shining next? We can calculate. We can figure, we can study test and extrapolate, but in the end chaos rules. We’ll never truly know.

When we let go and allow synchronicity to lead us a bit, miracles happen. Who would imagine that we could make these kind of profits in seemingly dull staid markets? Merri and I have done exactly this so we know!

Though the sun may shine a bit more than we like, if we adapt we’ll find opportunity that can also serve a purpose. Look for the trends that come and until next message, enjoy good global investing and be happy!

Gary

P.S. On the subject of happiness, here are some more pictures that make our readers happy.

This reader likes the mountains and nature and writes: “Dear Gary, I have been reading about you and Merri for some time now and I thought I would send you a few pictures. I recently went to Golden and stayed in a Tipi in the Rocky Mountains. It was beautiful there and a female deer, a mother, came to the pond to drink, even when dog was out, and she did not mind me being right there either. There is also a sweat lodge and a cabin by the river. Also, seeing my family with their new babies is also fun.

Ecuador Real Estate – Fight Inflation in the Galapagos. We recently looked at a way to invest in an environmentally rich area with a purpose. See Changes in Fight Inflation in the Galapagos

Changes in Fight Inflation in the Galapagos

One reader wrote: Gary, this sounds like an interesting investment…but with respect to your previous newsletters about global warming…is this a property that is likely to be submerged in the future? Thanks.

We checked with our attorney Dr. Andres Cordova who is heading up this project and he replied.

“This is a good question. Santa Fe lies some 7 to 8 minutes from the coast and is elevated by several hundred feet. In this regard I see it very unlikely unless we have a meltdown of cataclysmic proportions that it may be submerged at any time in the future. Kind regards, Andrés”

Here are some more Galapagos pictures.

Natural Health Tip – Mango Lassi

We need to adapt our investing for greater wealth and adapt our diet to the seasons for better health. One great summer food is the mango, one of the best foods in Auyrvedic terms. Mango trees belong to the same family as cashews and pistachios and are so healthy they are often considered medicinal. Ayurveda considers ripe mango sweet and heating and that they balance all the three aspects of the body (air, fire and water) and acts as an energizer.

Fortunately mangos are also pretty easy to obtain. Mangos from South Florida are the best in the United States, since the soil and climate is ideal. Try to find organic mangos and be careful of imported mangos, which are often rich in unhealthy chemicals.

Mangos are also great antioxidants full of beta-carotene, and Vitamin C. They also contain bioflavonoids, the compounds that help plants capture energy from the sun, and when eaten they aid our immune system. Mangoes supply potassium and fiber and are low in calories.

One great way to enjoy mango is via a mango lassi. Here is all you do.

Prepare a mango. The easiest way to cut mangos is to cut the flesh off the center away from the seed. This leaves you with two unseeded halves. Crosshatch the flesh with a sharp knife. Then push the back (the skin side) from the center and the mango flesh pops so it is easily cut off in cubes.

Put the mango in a blender with ground cardamom to taste, a half cup yoghurt (or kefir) and half cup of hot water. Blend. Chill in fridge. Delicious….and very healthy.

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