Emerging Market Value Analysis – October – November 2007


Emerging market values are the best long term indicator of where to invest in this sector.

One way we keep track of value is to follow the analysis of our friend, Michael Keppler.

Michael continually researches international emerging stock markets and compares their value 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 each emerging stock market’s history. From this he develops his Good Value Emerging Stock Market Strategy. His analysis is rational, mathematical and does not worry about short ups and downs.

He is, in my opinion, one of the best market statisticians in the world and numerous very large fund managers use his analysis to manage funds. In January, his company, Keppler Asset Management, was, for the third

consecutive year, named Best Fund Company in the Fund Specialists’ category by Capital, a leading German business magazine. Keppler’s firm was one of only six out of 100 companies tested that received the highest five-star

rating based on an independent evaluation of fund quality, management, and customer service by Feri Rating & Research and Steria Mummert Consulting.

Once a month we share Michael’s emerging market analysis with you.

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

Recent Developments & Outlook

Emerging Markets continued their recent impressive performance with new all time highs. The Morgan Stanley Capital International (MSCI) Emerging Markets Total Return Index (with net dividends reinvested, December 1988=100) has now reached new all time highs in nine out of the last 12 months if measured in US dollars. In euro terms new highs were reached even in 10 out of the last 12 months. In October, the MSCI EM Index advanced 11.2 % in US dollars. In euros, the MSCI Emerging Markets Index gained 9.3 %.

Since the beginning of the year, the Emerging Markets benchmark has gained 49.5 % in US dollars and 36.3 % in euros.

Of the three regional indices, Latin America gained 11.9 % in October, Asia was up 11.2 % and Europe, Middle East and Africa (EMEA) advanced 10.5 %.

Year-to-date, Latin America is up 57.4 %, Asia advanced 56.5 % and EMEA came in with a 30.3 % gain. Performance numbers are in US dollars, unless mentioned otherwise.

Twenty-six markets closed higher in October, one market declined. India (+17 %), China (+16.6 %) and Indonesia (+16.4 %) were the biggest winners of the month. Hungary (-1.8 %), Morocco (+1.4 %) and Argentina (+3.8 %) performed worst.

Year-to date, the number of advancing and declining markets is the same as in October: twenty-six markets are up and one market is down.

The best performing markets so far this year have been Peru (+129.9 %), China (+101.2 %) and Turkey (+83.1 %).

Sri Lanka (-13.3 %), Venezuela (+5.7 %) and Argentina (+11.7 %) performed worst.

The Emerging Markets Top Value Model Portfolio, which invests according to the Top Value Strategy and assumes

index returns for each national market included in the strategy, gained 10.1 % in US dollars and 8.2 % in euros. Year-to-date, the Emerging Markets Top Value Model Portfolio gained 52.7 % in dollars and 39.1 % in euros, outperforming the benchmark by 3.2 percentage points in dollars and by 2.8 percentage points in euros.

There are no changes in our performance ratings this month. The Top Value Model Portfolio contains 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 (Low Value) Argentina , Egypt , India , Indonesia , Mexico , Morocco , Pakistan , Peru , South Africa .

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

For more details on Keppler’s analysis, contact Roderick Cameron at

1-212-245-4304 or email roderick.cameron@kamny.com

You can get ideas on shares in these top value emerging stock markets from

Thomas Fischer at Jyske Bank at Fischer@jbpb.dk

Jyske Bank is the second largest Danish bank with 450,000 domestic clients, 35,000 international clients, USD 23 Billion in total assets, and a Moody’s rating of AA1. Jyske has over 35 years’ specialization in private banking

and Denmark is ranked by Moody’s as the safest country in the world to have a bank account in.

Jyske Bank uses a good value system as well and their affiliated fund management company has been rated #1 by Morningstar. They use this value system to help us select shares for Multi-Currency Portfolio Educational

Tracking Service. This has worked pretty well. In 2006 the mainly equity portfolios we tracked rose 42.93% (Emerging Market) and 114.16% (Asia Emerging Market) in a year.

Here is the final 2007 one year performance of the portfolios we created and tracked with Jyske Bank and excerpts from the 2008 Portfolio Update #2 from our Multi Currency Educational Subscription.

“We look at this one more time because the 2008 portfolios are reacting almost exactly opposite of 2007.

“In 2007 all five portfolios shot straight up from the gate. The performance in just the first two months would have been respectable for an entire year!

“As you will see below this year all the portfolios fell out of the gate. Some have dropped like a stone!

“Thomas Fischer wrote:

“Hi Gary , Attached is the first 2008 up-date. All our portfolios are suffering the “sub-prime blues” as markets world-wide are plummeting. The loss has been further increased by the risk-aversion and thus liquidation of the carry trade which has led to an increase in the funding currencies the Japanese yen and the Swiss franc. It is still early days and hopefully the markets will stabilize when (hopefully) the bad loans have been flushed out and declared. We might have to wait for the full year results of the banks before we see the full, true picture but I guess now is the time to remember Warren Buffets words ” be afraid when the market is greedy and greedy when the market is afraid”

Thomas”

“Here is the first two weeks performance of the 2008 portfolios.

“Portfolios 2008 Nov 16
Infrastructure -16.46%
Emerging Market -13.33%
Danish Health -13.32%
Green -10.86%
$ Short Non Leveraged -5.26%
Blue Chip -2.78%”

You can learn why this performance has taken place and see which shares have risen despite the turmoil…and why, through our multi currency subscription. Details are at http://www.garyascott.com/catalog/bldh

Until next message, may all you global investments be good.

Gary

Join us at a course soon!

Our course fees are rising for our 2008 courses. Since we have had only one price increase in over 20 years we are forced to make a substantial increase now.

We are accepting early enrollments for our 2008 courses at the 2007 price for about two more weeks so if you sign up now, you’ll save.

Here is the entire 2008 schedule below showing the early enrollment and soon to be prices.

If you plan to come to three or more courses next year the best option is the International Club at $1,999. All the courses below are included. The new price will be $2,999. You can enroll in the club for 2008 (though the catalog says 2007) at http://www.garyascott.com/catalog/international-club

Jan. 18 – 23 Ecuador Spanish course

Sign up now for one at $549 before the fee rises to $799. Or sign up for

$799 for two before the fee rises to $999.

Jan. 18-23 Spanish Course & RE Tour and Jan. 24-25 2008 Imbabura Real Estate Tour

Sign up for one now at $899 before the fee rises to $1,199 or $1,199 before the fee rises to $1,599 for two.

Feb 18-23 Ecuador Import Export Course

Remains the same at $999 and $1,499 for two.

Mar 7-9 International Investing and Business Made EZ Ecuador

Sign up now for one at $549 before the fee rises to $799. Or sign up for

$799 for two before the fee rises to $999.

Mar 10-11 Imbabura Real Estate tour

Mar 12-14 Coastal Real Estate tour

March IBEZ plus 1 real estate tour.

Sign up now for one at $899 before the fee rises to $1,199. Or sign up for

$1,199 for two before the fee rises to $1,599.

March IBEZ plus 2 real estate tours

Sign up now for one at $1,199 before the fee rises to $1,499. Or sign up for $1,599 for two before the fee rises to $1,999.

April 10-14 Ecuador Spanish course

April 15-16 Imbabura Real Estate tour

May 13-17 Ecuador Import Export course

May 23-25 International Investing and Business Made EZ North Carolina

$549 up to $799. For two $749 up to $999.

June 11-15 Ecuador Spanish course

June 16-17 Imbabura Real Estate tour

June 19-21 Shamanic Mingo Tour

Sign up now for one at $549 before the fee rises to $799. Or sign up for

$799 for two before the fee rises to $999.

Sept 23-27 Ecuador Spanish course

Sep 28-29 Imbabura Real Estate tour

Oct 3-5 International Investing and Business Made EZ North Carolina

Oct 14-18 Ecuador Import Export Course

Nov 7-9 International Investing and Business Made EZ Ecuador Nov 10-11 Imbabura Real Estate tour Nov 12-14 Coastal Real Estate tour

From December 1, 2007, El Meson de las Flores will charge between $59 and $70 per night including a full served breakfast. They will continue to offer a prepaid 30 day Hometel Plan (you can stay the month all at once or in segments. The rate is rising from $899 for a single to $999 and $999 for a couple to $1,099.


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