Grounded Multi Currency Opportunity Flies


Multi currency opportunity flies high while the markets decide what to do… moving one day up and one day down.

msci-chart-bloomberg

This Bloomberg.com chart of the one week movement of the Morgan Stanley Capital Index of global stock markets shows that investors are not sure what to do. That’s a good sign as it suggests that greed and panic are balanced.  Plus your investing can soar if others are confused and you are grounded in what you want to do.

All this volatility… plus a note from a reader reminded me of the importance in the duality of investing.

The reader wrote: Good Morning Mr. Scott.  My feet refuse to touch the ground.  The universe has sent me to you and Mrs. Scott ; I am full of inspiration to FULFILL MY DREAMS. 

My reply was:   Flying high is good as long as the principles behind the flight are well grounded.  We’ll do our best to help with both… the flight and the grounding.  Regards, Gary

This is about the importance of duality with multi currency investing and business.

The challenge of international investors and business people is to see the big picture but also pay attention to the minute details.  Take for example how this duality works in answering a question for a reader who wrote this very grounded query:  Hello Mr. Scott,  I just subscribed to your online newsletter this week and I’m looking for your opinion on investing in the Canadian market.  I haven’t yet seen you address it in your newsletter, I’m hoping I didn’t miss it.

With the volatility of our stock market I have decided to pull out and thought I would use the Canadian dollar as a safe haven.  At this point I’m just not sure where else to go?  I would very much value your opinion .  HELP!!!!  Thank you.

My reply was:  We believe in value investing and the value analyst we use, Keppler Asset Management, find that the Canadian market is among the low value sell candidate markets at this time.

market-values     

Here is my the currency breakdown of my portfolio.

Dollar Bloc  46.6%

US Dollar         22.0%

Australian $      7.0%

Canadian $        6.8%

New Zealand $ 10.8%

LatAm Bloc    17.7%

Colombian peso    .8%

Mexican peso      4.5%

Brazilian real      13.4%

Euro Bloc         32.5%

Euro                    20.6%

British pound         .4%

Danish kroner      3.6%

Norwegian krn     6.5%

Polish zloty           2.0%

Asian Bloc          1.o%

Singapore $           1.0%

You’ll see in my personal portfolio that 6.8% of my portfolio is in Canadian dollars.  This is not an investment in the Canadian market but half in electricity (Brookfield Renewable Power) and half Canadian dollar bonds.

I recommend our Multi Currency Report.

I also highly recommend Jyske Bank Private Bank as they offer for Canadians Jyske Invest Global Funds which invest in a VAMOS (Value Momentum and Strength) system and have enjoyed excellent success.

René Mathys at Jyske can be reached at mathys@jbpb.dk  for non Americans.

Thomas Fischer at Jyske Global Asset Management can help Americans at fischer@jgam.com     Regards,

Our challenge as investors… as business people… as living human beings trying to evolve internally as we grapple with external events beyond our control is to integrate the established box of thought that currently maintains social economic order with wiser expanded thinking outside the box.

In this instance my investing logic uses numerous “in-the-box” processes such as the ideas about diversification… price earnings ratios and price to book valuations…. 30 year economic cycles, national debt ratios, income per capita, asset allocation, demographics, supply-demand, technology and political stability to name a few.

However there is always something one does not know. To avoid being blinded by the tyranny of reason, I also use several out of the box thought processes. One I depend on is Vedic Astrology.  There are three elements I throw into my “thought pot”.

Vedic Astrological Concept #1: My nature.  Based on the place and time of birth to minute (Oct. 14) my chart shows I am a Leo rising, Taurus moon and Virgo sun… not  a Libra as generic astrology based on day of birth suggests. The placements in my chart suggest that I will have success in publishing, communication, real estate, liquids and gases.

So when I review the investment potential of Brookfield Renewable Power, and whether it might be good in my portfolio or not, I think about the chart of this investment. I recognize that the Canadian market is a bad value market from a statistical point of view.  I look at Brookfield’s earnings and its potential future earnings. I review the demographics and potential for electricity prices to rise.

Then I ask, “Is this an investment suited to me?”  Electricity created by liquid (hydro power) and gas (wind power) is perfectly in tune with my chart.

Vedic Astrological Concept #2: My current astrological position.  Once  a year I review my chart with Blaine Watson and we discuss the portion of my chart down three levels… major, sub and sub sub cycle.   For example I have been in a major Saturn cycle for the last 19 years (ending this December).  This is a cycle that turns grain into wheat… refines and improves though grinding hard work. Because of my chart Saturn favors laying of foundations… foreign involvement… and sits in my house of wealth and fame… through great effort.  In this cycle I expect a slow grinding process and expect to thrive by having challenges.

So if I see an opportunity that looks good but will require steadfastness… I would not discard this.  I expect to have to work hard at whatever I do in this major cycle.

My sub cycle is Jupiter. This is a transformation sub cycle (for example transforming water and air into electricity which gets transformed into light and or heat and or motion).  Jupiter governs knowledge and is the teacher and dispels darkness.  Jupiter is the planet of intelligence and owns my 5th house of higher learning, spiritual, philosophical and governs the house of success in change and transformation.

Today my sub sub cycle changed from Mars… a cyle when I would gain through acts of being bold to Rahu… a cycle that will favor being busy.

Here are my notes for this sub sub cycle: Busy? You ain’t seen nothing yet. Relentless. Business rises exponetially but unpredictably so take one step at a time. Exalted. Expect to achieve other large amounts. Foreigners will be a big part of this pacture.

Warning!  You get what you want. Be cautious of your own intelligence. Be careful of illusion. If something comes to you, consider it. If it comes from you… be suspicious.

That busy element has already cranked up as these sub sub cylces often do. We are just jammed. New sales highs… increased email… more people working with us…creating more questions to answer and ideas to review… more guests than we have ever had… new grandchildren arriving… a new charity event to fulfill.. all at once.

Were this not expected… one could get discouraged.

Here is Blaine Watson’s (my astrologer)  explanation of this thinking.

There are 2 main factors to be taken in to consideration when making an investment, boiling it all down to its basics.  One is the timing and the second is what to invest in.  The birth horoscope will give us strong clues as to both.

We have had some fairly good results using the natal chart. The most frequent experience I have had in this regard is in the real estate sector.  Most people, at some time in their life, will have to buy or sell a house or land.  Using the natal chart and the timings via the cycles of the chart and the current transits of the planets we have been able to use a system of calculation called in Sanskrit, Muhurtha, to time both the sale and purchase sides of the transaction with sometimes spectacular results. A muhurtha is actually the horoscope for the moment of the transaction itself. It is calculated by the astrologer and can be done independently of a birth chart although ideally in conjunction with it.

A client in Canada emailed last year saying he was needing to sell his house and buy a larger one to accommodate his expanding family.  The market at the time was in a downslide and property values were dropping rapidly, not extremely, but enough to cause concern when selling a smaller place and moving to a larger one.  His chart and the muhurtha that was calculated gave a particular date and time to list. His real estate agent wanted to immediately put the house on the market and have an open house the day before the muhurtha. I told him it was up to him but that he had asked and his chart said this time on this date would produce good results for him. He bit the bullet and listed it on the day suggested in the 12 minute window that was given to him. He had showings the next day and house was sold the following weekend at 19% above his asking price.

Another client in Canada had listed her house a year before she approached me.  She had not had a single showing in the entire year and her real estate agent said there was no market. I told her to take the house off the market and re-list it on a particular date at a particular time. Ironically it was only 2 days from the day she got in touch with me. She suggested she should just leave it on the market since the date was so close. I told her that she had listed the house a year ago at a time that was not favourable to real estate in her chart and that it would be best to completely close out of that not favourable energy in order take advantage of the more positive cycle coming up.  She took it off the market that day and re-listed on the day and at the time suggested.  She had a showing that very day and 3 days later the house closed and she was able to move on with her life. Literally.

This approach can be used for any sector at any time.  From the chart we can know what sector to invest in, or if investment is even something that should be considered.  There are high risk investments and long term conservative investments.  There are major and minor gambles. Anyone who has invested will know this. With the knowledge of the cycles of time we can take advantage of those cycles that favour us in particular and the world in general. We can think of them as the circadian rhythms of the universe if you will.  The stock market in general is difficult to call to say the least. I know of one company on wall street that uses western astrology (I practice Indian astrology – Jyotish) to time its entries and exits and it has, statistically, a 50% success rate, which is by any standard, not too shabby. I don’t have expertise in global predictions and prefer to use the individual horoscope to choose the sector and the timing.  Unfortunately or fortunately this approach requires an absolutely precise and known birth time. If someone doesn’t know their time of birth or if the birth time has been rounded off (99% of the time it is recorded as a rounded off time) we have to find it. There are ways of doing this. Once we are confident that the birth time is 100% accurate, we can be confident of the timing.

We have this knowledge in the west that for every thing there is a season.  For growing in greater substance and stability there are tools that we can take advantage of.  One thing we cannot do though is make everyone a multi billionaire. This tool is like any other tool that we have access to.  Also, we rely on our common sense and what works and doesn’t work for us.  For example, a client’s chart might say oil is a good sector to invest in. Morally they may not want to invest in petroleum but they could just as easily and profitably invest in food oils or essential flower oils.  This is something you would decide for yourself once you knew which sector was good for you.

Basically it all boils down to taking advantage of whatever knowledge we can to make life more smooth and easy so that we can move through life consciously and less like a log floating down the river at the mercy of whatever currents seize us at the time.

When I look at Brookfield Power or any business or investing idea…  I combine this out of the box thinking with the normal economic financial thought process.  For example… yes, transforming water and air to energy made sense in my chart… and Merri’s also.  I have not touched on this but because Merri and do almost everything together, we always look at both our charts.

Brookfield made sense in all the normal reasons, a solid company with good assets, strong management, a growth record and solid footing in an industry that has growing demand.    Plus the investment fit perfectly into our asset allocation and diversification plan.

Out of the Box… Whatever

Merri and I have found that reflecting on our charts has been meaningful… accurate and helps us regularly.  Yet one can use other methods as well. I often use the Bible to get me thinking out of the box… but not in a customary way.  I open to a page or passage and read whatever I see first… then reflect on this.  Other times I use several other great books… Rumi and Gibran being two notables… depending on what’s close when the impulse to get out of the box arrives.

Everyone should use what works for them. I Ching is popular… Tarot cards could work well.  I reckon flipping a coin works also. 

There is even some evidence that a blindfolded monkey throwing darts at a financial page can pick stocks as well as professional investment managers.  Excerpts from an article (linked below) at Investorhome.com explains:

In 1988 the Wall Street Journal began a contest that was inspired by Burton Malkiel’s book A Random Walk Down Wall Street. In the book, the Princeton Professor theorized that “a blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.”

The Journal set out to create an entertaining contest to test Malkiel’s theory and give its readers some new investment ideas in the process.
The contest began on October 4, 1988 and since then more than 100 contests have been completed under the current rules.

On October 7, 1998 the Journal presented the results of the 100th dartboard contest. The pros won 61 of the 100 contests versus the darts.

Researchers that have come to the defense of the darts argue that the contest has some unique circumstances that deserve elaboration.

Professor Bing Liang studied the contest over an even longer period and published a paper in the January 1999 issue of the Journal of Business titled “Price Pressure: Evidence from the Dartboard Column.”

Liang also documented a 2-day announcement effect, which reversed within 15 days. Liang found that the returns were intertwined with the pro’s track record.

Liang concluded that the pros neither outperformed the market nor the darts.

According to Liang, the pros supposed superior performance could be explained by the small sample size, the announcement effect, and the missing dividend yields. One of the strongest criticisms of the contest is the fact that the Journal measures performance by price appreciation only, despite the fact that total return is measured by both price appreciation and dividends. \

For the period that Liang studied, the pro’s stocks had an average dividend yield of 1.2% versus yields for the darts of 2.3% and 3.1% for the DJIA average.

Liang found that the pro’s stocks were riskier (they had higher betas than the market and the dart’s stocks) and had higher relative strength at the beginning of the contest. Liang also found abnormal volume in the pro’s stocks before the contest announcement. This could be coincidental or could indicate that someone knew the pro’s picks were coming and traded on them prior to the columns. Interestingly, the dartboard stocks tended to perform well after the contest ended.

Faith

The Arabic saying… “Trust in God but make sure your camels are tied up at night” summarizes the importance of grounding and thinking outside the box. The process you use to think outside the box should be one YOU have faith in.

My Quaker upbringing and experience with Chinese, Indian and Andean ancient philosophies gives me great faith in the direct connection we all have to a higher being and universal wisdom.  I have found Holy books, mystic poems, animal signs and Vedic Astrology work remarkably well for Merri and me.  So we have faith in these guides to paths that are out of the box.

Whatever works for you… whatever thought evoking process you can have faith in will help you be better at investing, business and earning in this age of declining faith in the words, honesty and order of the establishment.

History shows us in every instance that part of the population flies higher during all times good or bad.  Those who fly highest are grounded by integrating logic and a greater universal intelligence.   That’s a fact you can have faith in.

Have a good weekend.

Gary

Join Merri, me and Thomas Fischer as we enjoy the Blue Ridge leaf change and update where to invest globally and how to earn extra income with an international micro business. See  our October 7-9 International Investing Seminar.  See details here.

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Join Merri, me and Blaine Watson for his Investing Beyond Logic.

Track MSCI World Stock Index at Bloomberg.com. Click here

See more on Brookfield Renewable Power

Read more about dartboard investing


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