January 21, 2008
Here is the updated performance of the six multi currency portfolios that Jyske Bank created with our direction. We are tracking them for educational purposes beginning November 1, 2007.
Multi Currency Portfolios
| 2008 | Nov 16 | Dec 14 | Jan 13 | Jan 21 2008 |
| Infrastructure | -16.46% | -20.97% | - 7.28% | -68.47% |
| Emerging Market | -13.33% | - 9.80% | - 8.72% | -36.78% |
| Danish Health | -13.32% | -32.51% | -40.57% | -61.62% |
| Green | -10.86% | -14.31% | + 9.96% | -54.29% |
| $ Short Non | - 5.26% | - 9.08% | - 7.39% | -15.42% |
| Blue Chip | - 2.78% | - 5.14% | - 3.41% | -37.68% |
Thomas Fischer wrote:
“Hi Gary , Attached is the latest up-date of our multi currency portfolios. Three of the portfolios (Danish Health, Infrastructure, Green) are in margin call mode. At the moment we are experiencing a double-whammy with falling equity prices (Danish equities are even taking bigger hits so far the Danish OMX index is down 13,5%) and strengthening loan currencies (yen-Swiss francs)
“The equity and multi currency markets are in a complete meltdown mode. Everything has taken a big hit even well run companies with big profits and great cash flows. The Phily index showed minus 20.6 yesterday indicating a recession in the US . The stock market has moved from the business pages to the front pages of all tabloids adding to the fear factor. It has been difficult times for the doomsayers over the last few years I guess its pay back time. Thomas”
We have learned from the last two years that these multi currency portfolio corrections are the times that set up the greatest profits.
Let’s look for example at the Green Multi Currency Portfolio which dropped hugely in the last two weeks.
Our numbers show that the portfolio was up +9.96% in our last update and now its down -54%
We can see from this review how fast these multi currency shares fell.
| Curr. | Investment | Invested | Value Last | Value |
| Update | Now | |||
| EUR | Seche Environnement | 48,000.0 | 50,248.45 | 42,881.00 |
| DKK | Novozymes B 555.73 | 48,000.00 | 51,670.19 | 42,986.93 |
| JPY | Kurita Water | 51,000.00 | 47,387.35 | 43,727.68 |
| EUR | Q-Cells Ag | 51,000.00 | 57,371.96 | 41,723.86 |
| SGD | Hyflux Ltd | 51,000.00 | 44,296.64 | 41,273.38 |
| 300,000.00 | 311,631.45 | 261,815.20 | ||
| Loan Payoff | 201,772.16 | 216,101.98 | ||
| Portfolio Value | 109,859.28 | 45,713.22 |
Plus look at how much the yen rose and increased the payoff.
Wow what a drop…minus 65% in just over a week!
That’s leverage for you. We love it on the upside. Ouch what a seemingly miserable ride on the way down.
However this is where the numbers can fool and emotions let us down.
Most investors looking at the Green Portfolio since November 2007 think, “what a terrible portfolio!”
Yet last year there was a worse drop and investors thought the portfolio was great. Let’s recall the Green performance last year.
| Portfolios 2007 | Mar 27 | July 27 | Aug 10 | Aug 17 | Sept 9 | Oct. 30 |
| Green | 86.86% | 97.01% | 189.13% | 110.93% | 170.22% | 266.30% |
From August 10 to August 17, 2007 the Green portfolio dropped 78% in a week.
Yet investors did not get the same feeling of fear or panic then. This was because, as bad as that drop was, the portfolio was still up 110%. The bank was not warning that extra money or asset sales were required or near.
Here is the point which is a profound lesson. Three fundamentals remain the same today as they did last August.
#1: Environmental issues are one mankind’s greatest concerns.
#2: The shares represent ownership of well managed companies with good earnings and huge growth prospects.
#3: Regardless of these facts these two facts the portfolio just took a plunge.
This means that now the price of these shares represents a better value.
My guess is the this portfolio will not rebound as fast as it did last August…but to be honest I do not know…nor do you…nor does anyone else.
This is the point. We never know what the market will do. Instead of trying to guess the timing and tops and bottoms of the market, we look for value instead. This is why value investors are among the richest people in the world. They do not see this drop as a loss. They see it as a lever that enhances opportunity.
During this time of turmoil I’ll be sending updates more frequently than normal.
Until next message, good investing.
Gary
P.S. Enroll in Ecuador Living and see why I am buying a large chunk of this beach right now at
Join us this winter or spring at one of our tours and courses are below:
Feb. 18-23 Ecuador Import Export Course
See Ecuador ’s markets.
Join us with Thomas Fischer of Jyske Bank to review markets and update our portfolios.
Mar. 7-9 International Investing and Business Made EZ Ecuador
Mar. 10-11 Imbabura Real Estate tour
Eat in rustic and charming beach front restaurants where we will stay on the coastal tour.
Mar. 12-14 Coastal Real Estate tour
Enjoy Ecuador ’s empty beaches and see the coastal architecture. Here is a local house near the beach where I am buying.
Mar. 7-9 IBEZ and Mar 10-11 Imbabura Real Estate tour
Mar. 7-9 IBEZ and both real estate tours
Most delegates in March will join us for two or three courses as there is a sizable savings.
If you attend all three courses separately the fees are $1,847. Sign up for all three at only $1,499 here. Save $348. Three course savings.
Three courses for two separately are $2,597. Two on our three course adventure is only $1,999. Save $598. Three courses savings for two.
April 10-14 Super Thinking + Spanish
June 19- 21 Ecuador Shaman Tour
Here is a shot taken at a recent Ecuador Shaman tour as the musicians played for us at a shamanic ceremony at Lake Cuicocha .
