International Investments – November 2006 Emerging Market Value Analysis


International investments can offer special opportunity and safety because they often offer better value. International investments expert and friend, Michael Keppler, continually researches many emerging international investments in stock markets and compares their value as international investments based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return. He compares international investments in each emerging stock market’s history and from this develops his Good Value Emerging Stock Market Strategy. His analysis is rational, mathematical and does not worry about the short ups and downs of these international investments.

Here is a summary of Keppler’s current comments on recent developments & outlook in emerging market international investments.

Emerging Markets equities recovered from their sharp correction which started in early May and through mid June to reach new all-time highs both in US dollars and in euros.

In November, the Morgan Stanley Capital International (MSCI) Emerging Markets Index (December 1988=100) gained 7.4 % in US dollars and 3.4 % in euros. Year-to-date, the MSCI Emerging Markets Index is up 26.5 % in US dollars and 12.5 % in euros.

As for the regional indices, Asia fared best with a 8.1 % gain, followed by Europe, Middle East and Africa (EMEA), which advanced 7.4 % while Latin America gained 5.7 %.

Year to date, Latin America leads with a 33.8 % gain, Asia returned 27.9 %, while EMEA came in with a gain of 18.9 % (performance in US dollars, if not mentioned otherwise).

Twenty-two markets closed higher in November and five markets declined. Sri Lanka (+19.6 %) turned in the highest monthly return, Argentina (+15.9 %) came in second and Malaysia took bronze with an 11.1 % gain.

Jordan performed worst in November, losing 8.5 %, followed by Turkey (-7.0 %) and Pakistan (-5.0 %).

Year to date, twenty-four markets covered here achieved positive returns, the best performers being Indonesia (+65.1 %), Morocco (+62.7 %), and Venezuela (+60.0 %). The list of the three worst performers consists of the only losing markets: Jordan (-29.8 %), Turkey (-12.0 %) and Israel (-3.9 %).

There are no changes in our performance ratings this month. The Top Value Model Portfolio currently contains the seven markets Brazil , Korea , Malaysia , Poland , Taiwan , Thailand and Turkey at equal weights.

According to our performance ratings, these markets offer the highest expectation of risk adjusted returns.

SELL CANDIDATES: Argentina, Egypt, India, Indonesia, Jordan, Mexico, Morocco, Pakistan, Peru, South Africa

NEUTRALLY RATED MARKETS: Chile, China, Colombia, Czech Republic, Hungary, Israel, Philippines, Russia, Sri Lanka, Venezuela.

You can get ideas on shares in these top value emerging stock markets from Thomas Fischer at Fischer@jbpb.dk

For more details on Keppler's analysis, contact Roderick Cameron at 1-212-245-4304 or email roderick.cameron@kamny.com

Join Merri, Currency Experts from Jyske Bank and me at our next International Business and Investing Made EZ Course in Ecuador, March 16-17-18. Review which current markets offer good value. Meet Steve, our man in Ecuador, and learn about products to export. Meet Dr. Andres Cordova and learn about owning real estate in the Galapagos. Go to garyascott.com/catalog/IBEZec/

Keppler’s valuations tie in very much with Jyske Bank’s recommendations to invest in Turkey. The Turkish equity market and the Turkey Lira (TRY) have been well and truly clobbered. Everyone wants to shy away from this crucial market. This pushes prices down and creates good value.

Our recent report “The Titans Clash” looked at how we have added Turkish equities to the best performing portfolio we track in our Multi-Currency Educational Service. The report said:

Our Asian Emerging Market Fund rose an amazing 114.16%. The idea of that portfolio was to tap into the growth potential of Asia . $100,000 was invested. An additional $200,000 worth of Japanese yen was borrowed at 1.63%. The $300,000 (original investment and loan) were invest as below:

$ Amount Investment
75,000 USD-Rupees J I Indian Equity Fund
75,000 USD-Yuan JI Chinese Equity Fund
75.000 JPY JI Japanese Equity Fund
75,000 USD JI Emerg Mkt. Bond Fnd.

With this type of return one would wonder if it was worth trying to improve on it!

It is and in 2007 we have merged what we felt was the best of the 2006 Asian and Emerging Market Portfolios. From this we derived the 2007 Emerging Market Portfolio that is entirely leveraged with a Czech Koruna loan.

This uses a 100% dollar loan and has no USD investments. The starting date for this portfolio was November 1, 2006. Here is the 2007 US Dollar Short Portfolio.

The Invested amount is US $300,000.00 comprised of $100,000 original capital and US$200,000 borrowed.

The portfolio was invested as below:

CCY Name

Invested Amount

USD JI Chinese Equity Fund 50,000
EUR JI Eastern European Equity Fund 50,000
USD JI Indian Equity Fund

50,000

USD JI Far East Equity Fund

30,000

EUR

JI Turkish Equity Fund

20,000
 
Total Investment    

$200,000

LOAN
CCY Interest Amount  
CZK 3.875% 100,000.00  
    Total Loan $100,000

This 2007 portfolio blends the best performing funds of the 2006 Asian and emerging markets portfolio and adds in 10% in the Turkish market as a speculation that adds enormous extra spice.

You can get this 16 page report FREE and track our 2007 emerging market portfolio plus four others. Double your profit potential with the MultiCurrency Sandwich. Leverage investments in top value markets. See garyascott.com/catalog/bldh.html

Speaking of good value, how would you like to own a home with a garden like this for $90,000. You’ll see more photos in a minute.

First let’s look at some natural awakenings to natural health.

Natural Awakenings to Clean Natural Health

We often worry about pollution in the air water and in our food, yet some of the worst pollution we face is that which we bring directly into our home! A recent article in the LA Times says “Tons of chemicals in antibacterial soaps used in the bathrooms and kitchens of virtually every home are being released into the environment, yet no government agency is monitoring or regulating them in water supplies or food. The findings, in a study published last week in Environmental Science & Technology, add to the growing concerns of many scientists that the Environmental Protection Agency needs to address thousands of pharmaceuticals and consumer product chemicals that wind up in the environment when they are flushed into sewers."

This reminds me of a Christmas story of years ago after trimming one of our outside Christmas trees my hands were covered with pitch so I tried an organic cleaner manufactured by our reader and long term friend, Ted Tidwell. Turned out it was amazing and changed the way we clean everything. I call it Ted’s Cleaner Ted’s Stuff and it’s organic, bio degradable, non toxic, and cleans really well.

Since that time I started taking a look at all the cleaning stuff, soap and all we bring into our home. Thus I was suspicious when visiting a friend's home, and it turns out I should have been. Look at this. I noticed their hand soap was "Softsoap Antibacterial Soap" a brand of liquid hand soap manufactured by Colgate Palmolive. Check the label of this soap and you will read the words. "Proven to eliminate the dirt and germs your family encounters. Contains light moisturizer to leave your hands feeling soft. GENTLE ENOUGH FOR THE WHOLE FAMILY. As with any soap avoid contact with eyes."

"Humm", I wondered what does this mean. How can I find out what this stuff is really like?

There is a way.

Every product shipped has to have a OSHA regulated form called a "Materials Safety Data Sheet". This form is meant to protect workers shipping and handling products so I looked up the "MSDS" on Softsoap.

Get ready to cringe. The "MSDS" on this chemical based formula that is "gentle enough for the whole family" states under the general controls section "Avoid contact with skin and eyes." It warns workers to wear rubber gloves while using this and such. How this warning is mysteriously converted into gentleness on the store shelves is beyond me, but you can see the "MSDS" for yourself

Though it is doubtful that Softsoap alone will be really harmful to our health, we must wonder how many other things that are pushed on us as safe and gentle when they really are not. How many of these light toxins does our body have to deal with every day? How many of our allergies, diseases and imbalances are created by this continual bombardment of chemicals that do not kill, but each take their little tolls.

We have all heard of "death by a thousand cuts". Is our society suffering "sickness by a thousand minimal exposures"?

When Merri and I are away from the farm, its pure spring water and the fresh clean air we feel the difference. We must all be aware of our surroundings and take care. There is a saying that "Man can accomplish the impossible, but cannot overcome the inconvenient". We have walked the moon and sent humanity's imprint to Mars and beyond. Yet we cannot overcome the multitude of tiny toxicities that bombard us each and every day. This a true challenge. Everywhere we are, everywhere we go, poisons have been made easy to consume.

As the New Year approaches, one resolution you mind find good is to remove pollution from you home. This is one of the fastest ways to have a natural awakenings to natural health. You can learn more from Ted Tidwell at tedtid7@yahoo.com

Ecuador Real Estate

While in Ecuador we took our delagtes at our Ecuador real estate tour to see Ecuador real estate for sale like this house offered at $95,000.

Ecuador real estate offers really great value. Imagine living with this view.

Until next message, may your health be naturally clean and filled with good value!

Gary

P.S. Enjoy the following services and courses in Ecuador this winter 2007.

January 5-7, 2007 – Inspired Investing beyond Logic. garyscott.com/catalog/va/index.htm

February 2-8, 2007 – Learn how to Earn anywhere through Import – Export. garyscott.com/catalog/impex/


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