Multi Currency Portfolio 2008 – Update #7


Multi Currency Portfolio on January 13, 2007

Here is the updated performance of the six portfolios that Jyske Bank created with our direction. We are tracking them for educational purposes beginning November 1, 2007.

Portfolios 2008 Nov 16 Nov. 27 Dec. 01 Dec 14 Jan 13, 2008
Infrastructure -16.46% – 35.98% -18.58% -20.97% – 7.28%
Emerging Market -13.33% – 29.01% -19.62% – 9.80% – 8.72%
Danish Health -13.32% – 49.54% -38.06% -32.51% -40.57%
Green -10.86% – 38.82% -11.43% -14.31% + 9.96%
Short Non – 5.26% – 9.66% – 6.24% – 9.08% – 7.39%
Blue Chip – 2.78% – 10.58% – 2.00% – 5.14% – 3.41%

There are three great lessons here…the first being about spotting trends. The lessons are that if we spot and focus on great problems…they create great opportunities that defy market conditions. Even in these times of enormous market turbulence the Green portfolio is surging ahead, up nearly 10% in less than three months.

The second lesson relates to value. When we started this year’s portfolios the Danish stock market was, according to Michael Keppler, over bought.

Here are Keppler’s Major market value rankings.

High Value: Belgium , France , Germany , Italy , the Netherlands , Spain and the United Kingdom at equal weights.

Low Value: Austria , Canada , Denmark , Hong Kong , Japan , Singapore , Switzerland , U.S.A.

Neutral Value: Australia , Norway , Sweden .

The portfolio worst hit by the current turmoil is the Danish Health Portfolio…which contains all Danish shares. This does not mean that good shares cannot be found in low value markets where the overall value is not good…but overall this shows how important values are.

The third lesson relates to investing in what we like and know. The last Multi Currency update quoted Thomas Fischer at Jyske Bank:

“The Danish health portfolio is still in bad health mainly due to Alk-Albello down more than 40%. The reason is that the grass allergy medicine Grazax apparently had little effect according to FDA. The stock dropped 35% in one day (November) but our analysts believe it’s an overreaction and that the stock (and medicine) will recover. The other portfolios are also in negative territory but we still have more than 10 months to recoup the losses. Thomas”

When Jyske proposed this portfolio I hesitated for two reasons…one was Keppler’s valuation of the Danish market.

The other reason I hesitated was that I do not know much about this industry. Plus what I do know I do not like. They are part of what I call the fast food-pharmaceutical-insurance destructive system. This system seems to me to have many hidden agendas and is highly unethical, uncaring and imbalanced.

I appreciate that my thinking is in the minority but I trust my feelings and logic…so the pharmaceutical business as we know it may be on the verge of change. The flaws in this destructive system have to eventually back fire and perhaps pharmaceuticals as we know them are on their way out.

Does this make the entire drug industry more vulnerable to these times of turmoil? I do not know, but what we can see is that pharmaceutical businesses are crap shoots when it comes to developing new drugs. This is clearly shown in the Alk-Albello mess mentioned above. Martha Stewart, if we recall, learned this lesson the hard way as well!

I hope that you are not holding these pharmaceutical shares right now. I do not…nor will I ever.

Yet on the other hand if you know and believe in pharmaceuticals, this may be a good time to start looking for bargains.

Isn’t the big message here that Green is up drugs are down! Change is coming and if we spot and invest in it…this is good.

Until next message, good multi currency investing!

See attached file.

Gary

Join Merri, Thomas Fischer of Jyske Bank and me in Sunny Ecuador this winter for our next IBEZ course where we update multi currency markets.

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