Tag Archive | "Investment"

Not All ETFs Are Equal

Our latest report shows ways to get good low cost, global, good value diversification with ETFs.   Like all investments not all ETFs are of equal value.   As the popularity of ETFs grow, so too do the introduction of vogue ETFs that do not represent such great value.

One readers sent this excellent question about ETFs:  Hi Gary,  thanks for the interesting report.  At first glance I believed the idea of ETFs to be a great opportunity, however, after a deeper look it seems the parasites are having their way with ETF investors as well.  I am not sure about all of the ways in which the bankers fix ETFs to their favor but, for example, I see that some ETFs don’t rise as much as the index they are tracking rises, and falls further when that index falls.   Also, with an ETF your investment is only as good as the ultra leveraged derivative bets made by the investment bank that issues them.  So if that investment bank goes bust, your investment probably will too.  In other words, by purchasing an ETF issued by Morgan Stanley you are taking on some of the risk that Morgan Stanley remains solvent and that the entire derivatives market remains liquid.  Unlike holding real shares of real corps in Germany, for example, that are tied directly to the solvency and liquidity of those businesses.

The title of this message, “Not All ETFs are Created Equal” is the first answer to this question.   Four websites are linked below to help clarify this fact.  Like all investment types there are different horses for different courses.

Here are a few points to help each reader decide if ETFs are good for their financial strategy and if so, which ETFs are the right ones.

To begin we need to remember the overlying rule of all investments, “Caveat Emptor”, buyer beware.  A better phrase is “Buyer Be Aware”.   We need to be sure we understand the strategy of the specific ETFs we invest in. We need to look inside the ETF to see what shares are held in its portfolio.  ETFs are required to disclose their portfolio on a  daily basis at the fund’s website.

We need to read the prospectus carefully to understand the investment strategy of the ETF as this can have a significant impact on, income, tax and timing of profits.

Some ETFs use cap-weighted baskets of securities, others use fundamental-weighted baskets, and some even use derivative products.  There are even some now that use an active or quasi-active management style.  Each investment approach carries with it very different risk/return profiles and tax consequences.

Many index ETFs look the same, but operate very differently.  Review risks, costs and timing with your advisor to be sure that the ETFs you choose fits your specific situation.  ETFs are a hybrid of stock and mutual fund.  As a mutual fund, good ETFs have very low fees, but as stocks their price is ruled by supply and demand. ETF market prices can differ from net asset value.  We want to avoid buying ETFs at a premium (price much higher than net asset value).

The purchase of an ETF creates a brokerage commission every time it is bought or sold.  Brokerage commissions are usually fixed from a few dollars per trade to $20 a trade.  The more we buy at one time the lower the cost as a percentage of the investment.  This favors larger lump-sum investments and means that dollar cost averaging in small investments should be avoided.  The transaction costs can hurt a dollar-cost averaging in small amounts.  Larger quarterly or semi annual investments may be better than small monthly purchases.

We should consider the total costs before investing.  An expense ratio tells how much an ETF costs.   The expense ratio doesn’t include the brokerage commissions.

The average ETF has an expense ratio in the 0.50%, which means the fund will cost you $5.00 in annual fees for every $1,000 invested.  The best bet for small investors is to use online brokers that charge low or no commissions, IF the ETFs they offer fit our needs.  We look for brokers who offer what we need.  Smaller brokerage firms may have a limited selection of ETFs.

We look for the most widely-used and easy to trade ETFs for safety and to reduce buy and sell spreads.  Many ETFs that track long-standing indexes such as the S&P 500 have stood the test of time.  Many new ETFs stretch the definition of indexing.   Be careful of new indexes that track unusual segments of the market.   Avoid newfangled ETFs unless you understand them well.  Beware of leveraged ETFs. These investments are usually composed of derivative instruments and aim to provide investors with daily performance that tracks the underlying index (including leverage).  These are helpful for professional traders making bets on a daily basis, but ordinary investors should avoid them.

We need to be careful of thinly traded ETFs.  We can usually sell an ETF at any time during the trading day, but the growing number of narrowly-focused and exotic ETFs have not passed the test of time and many are more expensive.

We avoid these funds unless we really know what we are doing and the ETF specifically fits our strategy.   Passively managed ETFs are designed to track an index. Actively managed ETFs permit the fund manager to buy and sell securities and derivatives according to a stated strategy, described in  the prospectus.   A benefit of index ETFs is they are transparent and are not dependent on a fund manager who might lose his touch, retire or quit.  The exotic and managed ETFs do not provide this benefit.

ETFs can be sold short and many have related options contracts, which allow investors to control large numbers of shares with less money than if they owned the shares outright.  These positions can create short term aberrations in the ETF share price so we check them out.

Esoteric ETFs can have low trading volume and larger spreads which increases cost and volatility. Avoid a liquidity problem, by using larger funds that have proven themselves.  We avoid this problem by looking for substantial assets and large daily trading volume.

Here is a summation of what Merri and I do and you may want to do as well.  We look for two types of ETFs.  One is passive ETFs that fit into our strategy of investing in good value markets around the world.  The second are active ETFs that focus on high income, good value shares in good value markets.  We dollar cost average on a quarterly basis to keep buying commission costs down.  We buy long term positions to keep tax and selling costs down.   We look for ETFs in these two categories, that have low expense rations, large portfolios and high trying volume.


(1) New York Stock Exchange  What you should know about ETFs

(2) www.dailyfinance.com  10 rules before investing in ETFs

(3) CNCB- ETFs – what you should know

(4) Wall Street Journal How to Choose an ETF

Guilt Free II – Business Protects Pensions

Your ability to serve is ultimately the greatest (and most fulfilling) form of pension protection.

Yesterday’s message “Guilt Free Business”  looked at three problems, low interest rates, high equity prices and big business fines that are paid for by shareholders.  The two solutions viewed were a relentless search for equity value and a pinnacle career micro business.

Gallup Pole

Gallup Poll (1) showing a huge fall in public trust. Click on image to enlarge.

The masses are losing faith in big government and big business.  The wisdom of the masses is correct. We cannot and should not trust big government or big business to look after our future.  Recently, the CDC, health insurance system, the IRS, the Secret Service, and the Veteran’s Department to name a few government agencies have all let the public down.  This is likely the tip of the iceberg.

The loss of confidence should flow into the managers of our pensions, public and private also.   There are irregularities by pension managers that are being paid for by pensioners, rather than the managers.

A New York Times article “Behind Private Equity’s Curtain” by Gretchen Morgenson reveals a glimpse of how this puts pensions at risk.

The article says:  From New York to California, Wisconsin to Texas, hundreds of thousands of teachers, firefighters, police officers and other public employees are relying on their pensions for financial security.

Private equity firms are relying on their pensions, too. Over the last 10 years, pension funds have piled into private equity buyout funds. But in exchange for what they hope will be hefty returns, many pension funds have signed onto a kind of omerta, or code of silence, about the terms of the funds’ investments.
Consider a recent legal battle involving the Carlyle Group.

In August, Carlyle settled a lawsuit contending that it and other large buyout firms had colluded to suppress the share prices of companies they were acquiring. The lawsuit ensnared some big names in private equity — Bain Capital, Kohlberg Kravis Roberts and TPG, as well as Carlyle — but one by one the firms settled, without admitting wrongdoing. Carlyle agreed to pay $115 million in the settlement.

But the firm didn’t shoulder those costs. Nor did Carlyle executives or shareholders.

Instead, investors in Carlyle Partners IV, a $7.8 billion buyout fund started in 2004, will bear the settlement costs that are not covered by insurance. Those investors include retired state and city employees in California, Illinois, Louisiana, Ohio, Texas and 10 other states. Five New York City and state pensions are among them.

The retirees — and people who are currently working but have accrued benefits in those pension funds — probably don’t know that they are responsible for these costs. It would be very hard for them to find out: Their legal obligations are detailed in private equity documents that are confidential and off limits to pensioners and others interested in seeing them.

But the terms of these deals — including what investors pay to participate in them — are hidden from view despite open-records laws requiring transparency from state governments, including the agencies that supervise public pensions.

This is one more problem that can affect our wealth.  The solutions?

One answer is to manage your own pension.   This is what I do.  ENR Asset Managers can help you move your pension to Europe (3).  Two other solutions are as mentioned yesterday, the relentless search for equity value and your own micro business pinnacle career.   The ability to provide a valuable service or product is the ultimate form of purchasing power protection.


(1)  Gallup Poll  Public’s Trust in Government

(2) New York Times Behind Private Equity’s Curtain

(3) Move Your Pension to Europe

Magic in Multi Currency Investment Value

There is magic in seeking multi currency investment values.  For example we must beware of the small investor in US shares.

Wall Street Journal Article

Image from last week’s Wall Street Journal article Retirement Investors Flock Back to Stocks

The Wall Street Journal article said:  Retirement investors are putting more money into stocks than they have since markets were slammed by the financial crisis six years ago.  The rising deposits, combined with the powerful bull market that took the Dow Jones Industrial Average to a record high on Wednesday, have left retirement savers with their biggest exposure to stocks in more than six years.

This rush of small investors means it is time to increase our caution.

The magic is that with multi currency investments, the sun always shines somewhere.  Seeking value leads to that sun.

Right now US equities are being overbought.  However, the Emerging Equity Markets offer some of the best value we have ever seen.

The following table shows how the Emerging Markets Top Value Model Portfolio compares to the MSCI Emerging Markets Index and to the MSCI Developed Markets Index at the end of the first quarter 2014, based on selected assets and earnings valuation measures:

keppler asset management chart

Click on image to enlarge.

Based on Keppler Asset Management’s valuation and return analyses, the emerging markets are now undervalued by 23 % versus the MSCI World Index.

This bodes well with regard to potential outperformance over the next three to five years for the emerging markets in general.

One way to reduce exposure to the US market and US dollar as you increase emerging market positions is with an ENR Viking managed portfolio.

The managers of the ENR Viking High Risk portfolio  recently took a 5% defensive position in the ProShares UltraShort S&P 500 Index (NYSE-SDS).  They feel that the US markets continue to flash dangerous short term warning signals and that it was prudent to hedge some of the stock exposure in the portfolio against the S&P 500 Index, which they believe is historically overvalued.

They also recently purchased the Vanguard FTSE Emerging Markets Index Fund and also took a stake in China Mobile in Hong Kong.

They believe that China Mobile is one of the cheapest telecom companies in the world following a dismal string of poor earnings ahead of introducing new Apple smart phones to its vast subscriber base. They think China Mobile is undervalued as the stock trades at book value and sells at just 9 times trailing earnings and yielding 4.74%.   They believe China Mobile provides good value, great upside and a excellent dividend potential.

Learn more about ENR Asset Mangement

Send ENR questions to Thomas Fischer at Thomas@enrasset.com

See how to join me with ENR Management in Montreal this October

Another easy way to invest in emerging equity markets is with emerging market ETFs such as the Vanguard FTSE Emerging Markets Index Fund (ticker symbol VWO).  Another large emerging market ETF is iShares Core MSCI Emerging Markets ETF  (Ticker Symbol IEMG).

A good bellwether  is to look for funds that have a high and equal amount invested in the nine good value emerging market funds as ranked by Keppler Asset Management.   The good value emerging markets are Brazil, China, the Czech Republic, Hungary, Korea, Malaysia, Poland, Russia and Taiwan.

The fate of most small investors who jump in at the top of super heated markets and jump out when share prices are low, stock markets are dangerous places to invest.  For investors who think long term and seek value, these markets are magic, especially when they offer value like emerging markets do now.

Sandalwood – Better Than Gold

An investment in sandalwood has been better than gold.. or stocks… or bonds… by far.

Our February 14-15-16, 2014 International Investing and Self Publishing seminar will have a sandalwood investment review because the price of Sandalwood has risen 22.8 times in the last 10 years.

sandalwood price

There have been huge increases in demand for sandalwood.   The supply has dwindled so badly that the sandalwood tree is now a protected species.

Gold has risen three times in the same 10 years while sandalwood rose over seven times faster.

We’ll have an indepth review of sandalwood and see three ways to invest in this rare wood and why an obscure share of a small obscure Australian company, TFS corp., may be the best way to enjoy sandalwood profits.  We’ll have a sandalwood expert on hand to speak about the health benefits of sandalwood essential oil and how the demand for sandalwood may grow.

Since I began to research this investment less than a month ago, the shares have already shot from A$.95 cents to A$1.20.  The shares have risen over 142% in the last year.

TFS share chart

You do not have to wait until a seminar to get details. To help you understand the value of this opportunity, I have published a 63 page report at Amazon.com.  The price for the report at Amazon.com will be set at $9.99 after the seminar but for this week I have set the price at a much lower $2.99.

Order the report at Amazon.com and discover why Sandalwood can be better than gold.. or stocks… or bonds… by far…or better yet come to the upcoming conference for all the details!

See details at www.amazon.com


Join us this February 14-15-16 for a review on three commodity shares in copper, silver and sandalwood.





Dow’s Plunge Creates Three Profits

The Dow’s plunge creates three profits, for Spanish speakers, self publishers and investors.

First, here is the opportunities for investors.

Emerging markets offered a 40% discount last week.  Now they offer better value.  See why and what we will predict at our upcoming International Investing and Self Publishing seminar coming up Feb. 14, 15, 16.

wall street journal graph

Image Wall Street Journal article  U.S. Markets Tumble as Fear Spreads by Prabha Natarajan, Nicole Hong and Chris Dieterrich.

The current stock market slide will generate fear in many investors.  However, we should feel opportunity instead.   This shift is creating the next great breakout.

Friday’s WSJ article “U.S. Markets Tumble as Fear Spreads” article said:  “Stocks Post Worst Loss in Seven Months as Investors World-Wide Confront Pullback in Stimulus, Growth Worries.

The article told how this plunge will make emerging markets plunge even more.   This sector was already shaping into a huge bargain due to a factor called the “Small Country Effect”.

Keppler Video

See Michael Keppler Video on the Small Country Effect. Click here

There was a short term anomaly during the big 2009 market correction that threw the average price of developed stock markets below that of emerging markets… especially in Europe.   That distortion disappeared last year and Keppler Asset Management’s latest analysis shows that emerging markets remain less expensive (by far) than developed markets.  The 2013 run-up of equities has pushed developed market equity prices near all time highs.  The chart below shows why emerging markets are now overall a better value than developed markets.

The average p/e ratio for developed markets has risen to 17.9.  Emerging markets overall are at a much lower p/e average of  12.1.  Even better Keppler Asset Management’s Top Value Emerging Markets are valued at a lower 10.7 p/e ration as shown in the chart below.

See the nine Top Value Emerging Markets below.

Once a quarter we review all developed multi currency equity markets through the Keppler Asset Management’s Global Market Value analysis.

If you are a new reader learn about Keppler Asset management here.

Multi Currency Emerging Market Value Update Winter 2014.   Recent Developments & Outlook

Emerging markets equities have disappointed both in the last quarter in 2013. In the fourth quarter 2013, the MSCI Emerging Markets Total Return Index (December 1988 = 100) advanced 3.0 % in local currencies and 1.8 % in US dollars.

Due to the ongoing strength of the Euro, however, the global emerging markets equity benchmark was flat in Euros last quarter.

While the emerging markets benchmark was able to eke out a 3.4 percent total return in local currencies last year, weak local currencies kept their pressure on the 2013 benchmark returns in US dollars (down 2.6 %) and Euros (down 6.8%).

Among the three regional indices, Asia gained 3.6 %, Europe, Middle East and Africa (EMEA) advanced 2.4 % and Latin America gained 1.3 %.

Year-to-date, only Latin America continues to show a negative total return (-4.6 %), while EMEA is up 7.2 % and Asia gained 5.2 %. Performance numbers are in local currencies unless mentioned otherwise.

Fifteen markets advanced and six markets declined over the last quarter.

Egypt (+20.4 %), India (+9.0 %) and South Africa (+6.5 %) performed best.

Colombia (-9.9 %), Turkey (-8.8 %), and Hungary (-8.1 %) did worst in the last three months.

In 2013, for the entire year, eleven emerging markets advanced and nine declined.

Poland was unchanged.

Greece (+44.5 %) — which only entered the MSCI Emerging Markets universe at the end of November 2013 — Egypt (+17.3 %) and South Africa (+15.8 %) performed best.

Peru (-29.8 %), Chile (-14.4 %) and Colombia (-13.8 %) fared worst last year.

There was no change in our performance ratings last quarter. The Top Value Model Portfolio contains the nine markets — Brazil, China, the Czech Republic, Hungary, Korea, Malaysia, Poland, Russia and Taiwan — at equal weights.

According to our performance ratings, an equally-weighted combination of these markets offers the highest expectation of long-term risk-adjusted performance.

The following table shows how the Emerging Markets Top Value Model Portfolio compares to the MSCI Emerging Markets Index and to the MSCI Developed Markets Index at the end of 2013, based on selected asset and earnings valuation measures:

Keppler Emerging Market Analysis

Click on image to enlarge

Based on our valuation and return analyses, the emerging markets are now undervalued by 25 % versus the developed markets, while the Emerging Markets Top Value Model Portfolio is now undervalued by 19 % versus the MSCI Emerging Markets Index and by a whopping 40 % compared to the MSCI World Index of the developed markets. This bodes well with regard to potential outperformance of Emerging Markets in general and our Emerging Markets Top Value Model Portfolio in particular over the next three to five years.

Michael Keppler New York, January 17, 2014

Multi Currency Subscribers can see the full 49 page Keppler value analysis report including the neutral and poor value (sell) markets at the password protected multi currency site. Click here.

See how to get a password here.

Profits for Self Publishers and Spanish Speakers.

The drop in Latin currencies will make these countries increasingly attractive and open opportunity for travel writers who want to travel and create niches there.  Those who speak Spanish will gain the best advantages.

The small country effect will add huge opportunities in South America so we have added an additional Spanish course for March 28-28 and 30 2014.  See below how to attend this three day course free.Gary

New Risks Emerge

New risks have emerged in emerging markets for three reasons.

In 1968 when I first arrived in Hong Kong, I did not realize that I was in the middle of the beginning of one of the biggest socio-economic shifts in the history of mankind. Emerging markets were just beginning to emerge and Hong Kong was a leader. The Heng Seng index was 100.  Today it is over 22,000.

Now that era is dead.

heng Seng

Heng Seng chart from 1986.  By then it had already risen form 100 to 2,500.
The emerging market explosion is over and right now extra risks emerge.

Reason #1: Egypt.  The turmoil there will set many investors in emerging markets on edge.

Reason #2:  Energy Shifts.  There have been two energy sources that have fueled  industrialization over the past 300 years. Fossil fuels have accelerated this economic shift. The other fuel has been farmers moved from rural to urban and suburban environments.   As these farmers moved from the farm to the factory they dramatically improved their productivity at a very low educational cost.  Their enhanced wages increased their consumption.

The burst of emerging market growth has been fueled by cheap labor and fossil fuels.

In this era big business followed the path of least resistance wherever labor was cheapest in the world.  Manufacturing jumped from the US to Germany and Japan.  Then as labor costs rose in these countries the move was to Hong Kong… then to the Tigers (Singapore, Taiwan, South Korea and Malaysia).  Then there was a shift to China, Latin America, India.  Now places like Cambodia and Vietnam supply a lot of the really low cost labor.

As the world runs out of farmers and as the farmers that stay become connected, this cost of labor is rising everywhere.   More government… higher social costs and the rising cost of fossil fuel all have an impact to increase labor expense everywhere.

Reason #3: Valuations.   In the past, emerging markets simply offered better value than major markets.  You could buy emerging market shares with better P/E and ratios… and returns on investment.   This meant that one easy diversification was to reduce positions in major stock markets and increase positions in emerging markets.

Increased emerging market costs mean that we can wantonly just jump into any emerging market.  

Our value analysis noted several years ago that emerging markets were no longer the best value markets.  October 2011 Emerging Market Value Update said: Look for emerging market value. Times and conditions are changing.  We cannot count on emerging markets rising as they have in the past.    The way to adjust to this fact is to continue seeking value.

The July 21, 2013 article “When giants slow down” is an important read for investors in emerging markets. Here are a couple of inserts. A link to the entire article is below.  The most dramatic, and disruptive, period of emerging-market growth the world has ever seen is coming to its close

THIS year will be the first in which emerging markets account for more than half of world GDP on the basis of purchasing power, according to the International Monetary Fund (IMF). In 1990 they accounted for less than a third of a much smaller total. From 2003 to 2011 the share of world output provided by the emerging economies grew at more than a percentage point a year (see chart 1). The remarkably rapid growth the world has seen in these two decades marks the biggest economic transformation in modern history. Its like will probably never be seen again.

BRIC economies are contributing less to global growth. In 2008 they accounted for two-thirds of world GDP growth. In 2011 they accounted for half of it, in 2012 a bit less than that.

Other countries have impressive growth potential. Goldman Sachs touts a list of the “Next 11” which includes Bangladesh, Indonesia, Mexico, Nigeria and Turkey. But there are various reasons to think that this N11 cannot have an impact on the same scale as that of the BRICs.

The first is that these economies are smaller. The N11 has a population of just over 1.3 billion. That is less than half that of the BRICs.

The world as a whole has less catch-up potential than it used to. Its most populous countries are no longer all that poor and its poor countries are no longer all that populous.

Today, European markets offer better value than emerging markets.  A wave of unrest that could flow from the Egyptian turmoil could create a short term drop in emerging markets.  This short term risk coupled with the long term fundamentals shown above mean that one should consider reducing the weighting of portfolios in emerging markets and shift a portion of their portfolios from emerging to European markets.

fincne.yahoo.com chart

Chart from www.finance.yahoo.com

There are many ways to invest in European shares. One of the easiest is with an ETF that tracks European markets.  One example is ProShares Ultra MSCI Europe ETF.

This ETF seeks a return of 200%, over a single day, of the return of the MSCI Europe Index, a free float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of the developed markets in Europe. The Index consists of the following 16 developed market countries: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, the United Kingdom.  This Exchange-Traded Fund is listed on the U.S. NYSE exchange with a ticker symbol: UPV.

The problem of over weighting in Europe is the euro.   Since announcing that ENR Asset management will take over the management responsibilities of Jyske Global Asset Management next month, I have been following ENR’s Monthly Outlooks.

The July 2013 outlook said: Financial Repression’ is increasing as Portugal becomes the latest nation to force pensioners to include up to 90% exposure to sovereign bonds up from 55%.

Spanish social security assets are already invested heavily in local government debt and Italy is selling sovereign bonds across the country vis-à-vis online retailers.

France has forbid the import or export of physical gold.

As nations attempt to avoid outright default, local investors will be forced to buy domestic government securities in order to fund gaping holes in budgets.

Europe’s credit crisis has erupted again this summer as Portugal’s political crisis spills over into government bond markets; France, which we view as the next ‘wildcard’ in the Euro-zone, was recently downgraded by Fitch or the last of the the main three rating agencies. If France’s bond market comes under attack by the vigilantes, then EMU or European Monetary Union, might be threatened or possibly, destroyed.

ENR also provides a solution.

The ENR Global Currency Sandwich, an equally weighted anti-dollar portfolio including the Norwegian krone, Swedish krona, Singapore dollar, New Zealand dollar and gold bullion is down 8.84% this year.

This compares to a rise of 6.62% for the Wall Street Journal Dollar Index and a gain of 4.18% for the U.S. Dollar Index or DXY.

The U.S. dollar is King in 2013 and ransacking almost every currency as it trades near its high.

By far the biggest loser this year is gold, down more than 23% and logging its worst quarter in forty years in Q2. Other currency constituents in our sandwich are also down: The Norwegian krone is off 9%, Swedish krona down 2.7%, Singapore dollar down 3.3% and the kiwi is off 6%.

Currency shots

ENR’s currency recommendations:

Look at the fundamentals from the August 17, 2o13 economic indicator section of the Economist.

Currency shots

Currency shots

Currency shots

Currency shots

(Click on images to enlarge.)

Here is why these currencies are of special interest.  First, all four of these countries have much better currency fundamentals.  All (except NZ) have a positive trade balance and current account compared to America’s huge shortfall.  Second, all four deficits as a percent of GDP run from a quarter to a half of that n the USA.  Finally interest rates are equal or higher than in the US.

In addition Sweden and Denmark are part of the EU, but use their own currency.  If the European market rises and the euro drops… shares in these currencies will gain a double profit.  The New Zealand dollar is part of the dollar block but has much stronger currency fundamentals.

For details on the ENR  Currency Sandwich Portfolio contact Thomas Fischer at fischer@jgam.com
A new era has begun.  From 1968 until 2011 there was one idea we could rely on…. emerging markets offered better value than emerging markets. This is true no more… but through all the shifts…. through all the change… through all the ups and downs and noise, there is one approach that we have always been and can still rely on.   The relentless search for value always brings profits in the long run.


Meet with Thomas Fischer and ENR Asset Management at International Club Think Tanks.

When giants slow down

Great Pension Robbery II

The is the second message in the Great Pension Robbery series.

Dad was a zookeeper. My sister Sandra and I benefited from this because dad brought baby lions for us to raise at home. What fun!  We loved them… so cute, warm and cuddly… sort of like a pension.


Portland news article about us raising “Boots” our first lion.

Pensions can make us feel all warm and cuddly… safe in the future… with not a care in the world.  Then like lions they can grow up.


Oops.  Here is dad with Boots some months later… not so cute… not so cuddly and he might just bite us in the… but there is a solution.

The first chapter in this series The Great Pension Robbery reviewed three ways that the purchasing power of pensions can be stolen away.

That article examined the first way pensions can be robbed through under funding from insufficient contributions.

Two other forms of pension theft… are lowered return on assets and the destruction of the pension currency in upcoming messages.

This message looks at pension theft from lowered return on assets


Thomas Fischer speaking at the  Writer’s Camp delegate at our summer home.

Thomas Fischer sent me this note (bolds are mine):  Hi Gary,  Yesterday the ECB lowered interest rates by 0.25% (deposit and loan rates).

As a consequence Denmark also lowered its interest rate by 0.25% (loan rate reduced from 0.45 -0.20%) and the Central Bank also lowered its CD rate (banks deposit rate at the Central bank) by 0.25% to minus 0.20%. It’s the first time in the Central bank´s  200 years history they have had negative CD rates.

They are doing this to keep the currency peg towards the EUR (it can move within a 2.25% band). The Danish kroner is a safe haven and the Central Bank has taken this step to stop the rise of the kroner.

Danish 1 year government bonds yield minus 0.268% whereas investors can get a “whopping”  1.232% on a 10 year bond!

Great if you a looking for financing but for savers it’s awkward!  Thomas

Ways how to get ideas on better returns from Jyske contact: Thomas Fischer at fischer@jgam.com

Canadians and other non Americans should contact Jyske’s  René Mathys at mathys@jbpb.dk

There you have it… you have to pay to have a bond in a safe currency issued by a safe government.  This is not a low return. This is a negative return.

Your pension contributions may be based on the expectations of earning 8% per annum.

Here is an excerpt from a New York Times article entitled “Public Pensions Faulted for Bets on Rosy Returns” by Mary Williams Walsh and Danny Hakim:   While Americans are typically earning less than 1 percent interest on their savings accounts and watching their 401(k) balances yo-yo along with the stock market, most public pension funds are still betting they will earn annual returns of 7 to 8 percent over the long haul, a practice that Mayor Michael R. Bloomberg recently called “indefensible.”

In New York, the city’s chief actuary, Robert North, has proposed lowering the assumed rate of return for the city’s five pension funds to 7 percent from 8 percent, which would be one of the sharpest reductions by a public pension fund in the United States. But that change would mean finding an additional $1.9 billion for the pension system every year, a huge amount for a city already depositing more than a tenth of its budget — $7.3 billion a year — into the funds.

But to many observers, even 7 percent is too high in today’s market conditions.

Projection 7% or 8%. Reality – .02%.

Most pensions are being robbed through these unrealistic projections. The high estimated return reduces the contributions that will be needed for the retirees in later years.   This is a very subtle theft but just as deadly to purchasing power as an armed bandit with his kerchief and gun.

The past wisdom of relying on pensions for retirement may not be so wise in today’s economic and demographic environment.


One adventurous way to extra earn income is with a seminar tour or events business. To see more details on how to start an events business, click here.

Another way to have a steady income is through agriculture.

Ecuador Agricultural Real Estate Tour

For current Ecuador Agricultural Real Estate information send me a note at gary@garyascott.com

Screen shot 2012-07-25 at 12.29.30 PM

Ecuador coffee farm entrance.

The original owner spent two years searching for the perfect location to duplicate the exact terrain, altitude and growing conditions of the most successful coffee farms of Boquete, Panama and Columbia.

Screen shot 2012-07-25 at 12.28.53 PM

Terrain and coffee plants.

After walking with an altimeter in hand and talking to reclusive indigenous farmers, this region was discovered with all the perfect conditions to cultivate exceptional Arabica coffee trees.

Screen shot 2012-07-25 at 12.30.49 PM

Owners house with roof terrace.

This is a micro climate, blessed with abundant rainfall, in clean mountain air, bounded by a clear trout filled year around rushing river, protected from extremes of wind and large temperature fluctuations,  perfect for growing coffee.

Screen shot 2012-07-25 at 12.30.35 PM

Open drying patio.

It has 11 hectares planted (manageable for a single owner), with approximately 50,000 Arabica, varietal Caturra (self pollinating) coffee trees which  are perfectly distributed over a hillside interspersed with a variety of fruit trees for shade.

Screen shot 2012-07-25 at 12.30.24 PM

Oranges grown to protect coffee trees.

No problem selling this crop for top dollar due to its proven high quality.  The coffee sales last year grossed $70,000 so after $25,000 expenses, $45,000 was the net income.

Screen shot 2012-07-25 at 12.29.47 PM

Coffee beans.

As well, an experimental 1 hectare of Geisha varietal.  Geisha is considered to be one of the finest coffees in the world and garnered the highest auction record in coffee history, fetching $170 per pound in 2010.  The first harvest of this varietal is expected in about 2 years.

Screen shot 2012-07-25 at 12.30.11 PM

Coffee plants grown in greenhouse on farm.

This Andean  location provides an ideal environment for coffee growing without damaging the unique habitat of many species of birds.   Arabica coffee trees are a major source of oxygen production.  Each hectare produces 86 pounds of oxygen per day which is 50% of rain forest habitat.  Ecuador is a biologically diverse country with an abundance of birds, amphibians, reptiles and butterflies.  Inca Mountain Coffee Farm is ecologically in harmony with its environment.

The Arabica coffee trees are 6 years old, providing remarkable yields, allowing for continuous flowering and two annual harvests (major harvest Feb-Jun and minor harvest Oct-Nov).

Screen shot 2012-07-25 at 12.30.00 PM

Covered drying patio.

In the yearly Golden Cup competition, coffee from this farm was a finalist in 2011.

Screen shot 2012-07-25 at 12.31.12 PM

Seasonal worker harvesting coffee.

Owner’s house – 900 sq/ft, 2 bed, 1 bath, with lots of marble, built in cabinets in both bedrooms and upper roof porch

Caretaker’s house – divided into multiple rooms with bathroom

Land line phone installed and operational

110 and 220 volt electric lines

Equipment:  2 coffee bean pulpers with 2 water tanks, 2 weed whackers, misc. tools, scale for weighing coffee bags

1 large uncovered drying patio and 1 covered drying patio

2 full time highly experienced workers – monthly payroll is $650 (plus more during harvest for seasonal workers)

Average yearly expenses:  $25,000 (all payroll, fertilizer, harvesting expenses, utilities, taxes)

Screen shot 2012-07-25 at 12.31.01 PM

This clean mountain river that runs year around with trout.  Also, access to mountain water for farm irrigation, though it is rarely needed.

Farm is fenced along road.

You can set the date for your own tour.

The Ecuador farm tour fee is $799 for single or  $999 couple.

Case Study #3:   This third case study shows an American who has created a   large Ecuador agri operation. This is the farming operation set up by Young Living Essential oils.


After creating a marketing system for the oils and farming in the USA, Gary and his wife…


moved to Ecuador… began a large farming operation as well as…


there own processing and a health spa.

Ecuador is a perfect place for many types of agriculture… large and small.  Find your farm in the safe and efficient way on an Ecuador Agricultural Tour.

For efficiency and logistics this tour is strictly limited to 15 people… 4 persons per four wheel drive vehicle.

You can set the date for your own tour.

The Ecuador farm tour fee is $799 for single or  $999 couple.



Multi Currency Investments – The Darkest Hour

Is this the multi currency investment’s darkest hour when a double dip will increase opportunity?

dow chart

Here is a chart showing how the Dow Jones Industrial Index ended down last week.  See a similar chart below that shows why this could be good news for many.

Since it is Monday, let’s start this week by recognizing that this correction has been suspected and that historical research suggests that this is the darkest hour before the light at the end the global economic tunnel appears.

You’ll see below that the current stock market volatility and economic slow down are to be expected…are completely natural and in perfect order.  This is a time of great opportunity…not of disaster.

This site has continually reviewed the 15 to 17 year economic cycle as outline by Austrian economist, Joseph Shumpeter. The global economy (and US stock market) enjoys an approximately 15 year bull…. then about a 15 year bear (a period of no growth) and then moves back to start a 15 year bull.   These stock market bull and bear cycles are based on cycles of human interaction, war, technology and productivity.


At our June 2011 International Investing & Business seminar we looked at how the US equity market is currently about 12 years into the 15 year trend.

We then compared the last 15 year bear cycle That began in 1968 and saw that after 12 years from  October 1968 to April 1980  the US stock S&P index had dropped -7.7% in 138 Months.

Then we saw how from the beginning of this bear cycle from December 1999 to June 2011  the S& P was down -11% in 138 Months.

Then we looked at this chart from Moore Research Center, Inc. to see what to expect from June 2011 to June 2013 if that period compares with June 1980 to 1982.   The historical story tells us to expect a large drop.

Notice the similarities between the market in early 1980 (Blue Line) and the current Dow above.  There is a strong synchronicity.

s&P chart

A strong 1999 to 2013 bear?

See how to get a FREE recording of the June seminar and how to attend our October 7-8-9, 2011 International Investing and Business Seminar.

If history is our guide, some great new innovation or innovations will then ignite 15 year bull beginning in 2013 to 2014.

This is good news for retiring boomers who manage not to be wiped out from the next several years of sideways and downwards motion.

This is great news for long term investors who can pick up incredible bargains now.

Here is how these cycles seem to work.

Step #1: An economic downturn enhances a war or threat of war. Struggles for survival in the war (like the Civil War, WWI, WWII and the Cold War (WWIII), super charge inventiveness that creates new forms of productivity…the steam engine, the internal combustion engine, production line processes, jet engines, TV, farming techniques, plastics, telephone, computer and lastly during the Cold War, the Internet.

Step #2: Each new invention helped win a war.  Shifting the technology to domestic use… after the war… created a boom.

Step #3: Each boom leads to excess.

Step #4: Each excess led to a correction.  The correction creates an economic downturn.

Step #5: The economic downturn enhances a war or threat of war.

Here we are… in the correction… at the correct time when we should expect that another war (or threat of war such as the Cold War) should begin to build!  This latest downturn started almost exactly (1998), 16 years after the last boom began (1982)…which began after the last great human struggle called the Cold War.

If the cycle repeats, the struggle should build now due to the poor economy.  If the cycles repeat then the bottom is around 2013. Everything will seem bleakest… darkest…blackest and this will be the best time of all to invest… hence my light suit!

This Morgan Stanley graph shows these cycles.


The key for spotting the greatest investment opportunities is to spot the next big invention… the technology that will spin out of WWIV.

The key is that a problem must have such severe consequences (such as losing the war and being destroyed) that all stops… all logics of return on investment are ignored. Technology and research are pushed full steam ahead regardless of cost.

The key to great success now is spotting the war.  It could be against global warming.  The battle could be against a plague…. new bacteria that resists antibiotics.  A bad year of crops could create famine and the war would be on hunger.

The solutions could be the small stuff (nano tubes) or large sun reflectors tied to earth that generate energy.  Whatever, large or small,  the opportunity they create will be huge.

We are betting on water, natural health, agricultural real estate, good value US real estate and Ecuador real estate… because we understand these.

You should look for innovations that you understand that could rock the world.

If markets continue to fall.  If the global economy stalls.  If there is increased unemployment and turmoil… we cannot do much about this.

We can… if we see what is likely to come, be prepared so we can think out of the box and invest and do business in places most likely to be at the forefront of the next social economic expansion.

These are the times of greatest opportunity for the small guy when the old order that has taken advantage of the system lets go and a new order led by new blood continues humanity’s evolution.


Use our Multi Currency Portfolio Service in the year ahead.

See ways to earn globally with our online courses.

See an Ecuador visa warning and see ways to gain in Ecuador from the turmoil in the Western world.


Spot Future Trends & Archives

You can see the whole message “Spot Future Trends” in the archives.

Aghhhh!  Please forgive my delayed replies this last week. My MacBookPro crashed just one day before we started our most recent Super Thinking + Spanish course. I had complete backup… but no computer to put it on.  This left me without a Powerpoint presentation and all thumbs trying to keep up with the steady onslaught of incoming email via GMail and stolen moments on Merri’s PC.  Aghhhh!


I may look relaxed in my office but I can tell you I WAS NOT.

All this led me to spending some time at the Altamonte Springs Apple Store.  What an interesting place for investors to view.  So many ideas. So beyond…. computer.

Now I have two MacBookPros.  I’ll keep them synchronized so this never happens again.  The new computer… and Moore’s Law and watching all these so young, Apple geniuses really started me thinking about future investment trends.    My new Mac has 8 gigs of processing power… 500 gigs of memory and a high speed hard disk that chews up the graphics files I move around like the wind moves dust… all including three year service a one on one program high res, no glare screen… and a remote… $3,500.    I look back at my first fridge sized Data General Eclipse 32 bit machine.  I recall paying about $75,000 in the 1980s.  What a difference 25 or so years have made.

We can learn a lot  (not everything, but quite a bit) about investing in the future by looking in the past… so I often check back to see what I wrote and how the ideas turned out.  Talk about 3H… “Humbling”…. “Humorous” and “Honesty Evoking”.

The excerpts here are from a message posted at www.garyascott.com June 10, 2000, almost 11 years ago: I recently spoke at Jyske Bank’s international investment seminar which Merri and I always enjoy. We began at their Copenhagen headquarters in a grand old building in the center of town where they always speak a little and feed us a lot in their company dining room. Also, I am always impressed that the bankers themselves wait on tables and serve us. The building’s history gives us a bit of architectural awe and since Jyske are not normal bankers they really do work hard to entertain. 70 delegates came from all over the world, five Australians, a handful of Ecuadorians, Swiss, Germans, Danes and Swedes, two Taiwanese, Canadians, French, Austrians, one man from the Ukraine and one from Ghana, plus some more and we had a genuinely fun time as well as learned a lot.

The bank lined up a host of really good speakers including Ian Pierson, the head futurist for British Telecom spoke. He is really a bright guy!  If he is to be believed, we won’t pay for telephone calls in a decade and we’ll have computers that can almost create Star Trek style holodecks. We’ll have computerized skin of chips so small they’ll sink below the skin and connect with neural networks. We can put these on so we’ll feel and taste as well as see and hear digital experiences.

The idea is that TV and phone will drag the world into cyberspace! We will use increasingly powerful, smaller (and smarter) chips in phones and TVs. We will make them interactive with voice and gesture and the computers will even give vocal replies.

Their will be two steps that take place.   First we will move from using computers to using interactive TV and the phone. Too many people are afraid of computers because they are too user unfriendly. But everyone knows how to use the TV and phone.

Second we will shift from the typed word to voice. Not everyone can type but most of us can talk.

These voice and gesture activated devices will be powerful in assessing your needs, sorting out data available and giving you a short list of useable information. You will no longer go to the net and ask a general question which may result in thousands of possible answers. You’ll be able to ask specific, personal questions and get personal, specific answers.

This simple idea could change our entire social, economical, religious, political and economic structure. How?

One change will be the functional decomposition of companies. Many of the aspects of business that currently make companies a powerful social tool, such as human resources, information sharing, clerical, accounting, distribution, procurement, legal, sales, even R&D will be capable of being automated. Companies will simply not be needed. Computers will give the services to workers that companies previously provided.

Another change will be speed of change. In this scenario change becomes so rapid that experience becomes a liability instead of an asset! Businesses are a pool of experience commonly guided by a plan. As computers eliminate the current dynamics of time and space the inflexibility of plans will reduce the effectiveness of companies. Instead we will see highly flexible, loose knit, networks, linked by the net, that take on short term tasks.

This organizational shift will alter the dynamics of everything. Imagine the shift in political power for example. Imagine how a network of a thousand people can gain instantaneous and strong power. If each member in such a network can pass an idea to only ten people, three deep that small network can move a million people (buyers, votes, etc.) overnight. Small networks will be able to apply considerable pressure in very direct places at incredibly specific times, all at low cost.

Interactive TV and cell phones can also reverse the “Cycle of Knowledge”. For the past two hundred years this cycle has shifted from the individual as a general knower of many subjects to the individual as a specialist in just a few areas.

We can presume from this that those who are wealthiest spend the most of their time on a speciality which makes money for them.

But the vocal use of interactive, intelligent cell phones and TVs means that individuals will return to having more general knowledge. Specialists will not be so much in demand because up to date, relevant, less biased, specialized knowledge requirements will be filled on demand by computers.

So look for the cuddly home interface. This could be where the next big action is.

So, her I am Jan. 21, 2011 and I am thinking…..well, Pierson and that message really banged that nail on the head.  But how have the share prices of the cuddly interface companies played out?

Let’s take a look and see how the share price of some businesses that should have profited from these trends have played out.

How about British Telcom?  I mean they hired the guy… Pierson.  Here is the share price since the year 2000.


So the telephone company employing Pierson didn’t do all that well in this decade of the cuddle interface.

How about Vonage the company that let’s us talk on the phone free?


Nope, no great long term profits there.

Noika… the Finnish cell phone maker.  Are they in the race?


Evidently investors in 2000 thought Noika was the company that would excel.  They may still be thinking that and waiting. If so… I hope they had other investments as well.

Apple?  The company that started me thinking about this.  I am sure the IPod… the King of the phone cuddly interface played a big part in its recently rocketing share price, so this is the one share of a company heavily involved in the cuddly interface that has really moved up.


Why has Apple share prices shined and not the others?

One reason behond Apples success may be its lack of debt.

A recent article at www.garyascott.com “No Debt Shares” showed the share appreciation of top performing, debt free, companies. Apple was number two.

Here is an excerpt from that “No Debt” message:


Apple has great design and a very innovative leader. Even now, as well established and successful as Apple is, Steven Jobs’ medical leave brings the company’s future into question.

Big companies like British Telcom are hard to adapt quickly.  Vonage does not have such a cuddly interface yet.  Noika, I am not sure what went wrong.

The clear message though is “just catching the next big wave is not enough!”  Every new technology offers great opportunity but venture investments do not have an obvious value profile so speculation and hence extreme discipline and diversification are required.

The key to prosperity rests in the ability to adapt to accelerating change.   This requires a new form of investment thought.

Our upcoming International Investing Made EZ and our International Business Made EZ seminars include sessions on how to use FM Thinking (Frequency Modulation) to improve investing and business choices.

We dipped into the archives, saw the comparisions and can see that to adapt to think Beyond Logic.  Our FM course is designed to help you to see bigger pictures….


December 18, Q & A

Saturday Questions and Answers.


See below how changes in green investments can affect our wealth and well being.

#1: Question Jyske lawsuit.

#2: Question Multi currency investing with minimal amounts.

#3: Comments on quackery.

#4: Rats in Ecuador.

#5: Comments on natural resource polarity and something to do about it as an investor.

#6:Comments on Terror and Love.

#7: Comments on New FM (Frequency Modulation) Teacher training.

Question #1:  Re Jyske class action suit. Hi Gary, I noticed this article in FIN Aternatives . I was thinking to invest with  these guys, especially as you are so enthusiastic about them.  It does not bode well that Jyske Bank as been sued (successfully) 43 times by investors…do you have a comment? Thank you,

My comments: I do not know the details but am asking Jyske for more insights.We have only had good luck with Jyske and have known the top people for decades. They have also treated our readers with integrity as far as I know.  We get few complaints and do see quite a few positive comments though due to the increased diligence forced on all banks we see more unhappy clients with banks everywhere.
One thing I like about Jyske is that its staff are not given bonuses… so there is no pressure on any of them to pull tricks to make their performance look better. It is in the staff’s best interest for the bank to remain conservative and strong so I do not know what went wrong in this case.

Regretfully Jyske is one of the few major European banks left who will take American clients for less than millions in their account. Not regretfully because Jyske is bad but because it is always good to have choices and Americans do not have many when it comes to overseas banking now.

Any big institution may make errors. I noticed that Morgan Stanley… a huge firm  is just being sued for billions re Madoff.

It is possible someone may have screwed up within Jyske’s organization. It is hard for any big company not to have problems from time to time.  Everything I have seen though suggests a pretty strong organization with good values.

Gary’s Added Comment: Jyske did send the following reply about this lawsuit. I am answering on behalf of Gary Scott’s forwarded email to Jyske Bank Private Banking.

Under reference to your email informing us that IceNews, among others, has published an article, ‘poor investment advice acknowledgement by Jyske Bank’, we inform you that the article is in our view too sweeping and does not reflect the realities of the case.

In the autumn of 2007, Hedgeforeningen Jyske Invest launched a bond hedge fund, Jyske Invest Hedge Markedsneutral – Obligationer, which implemented a market-neutral investment strategy using a combination of Danish mortgage bonds and German government bonds. Many Jyske Bank customers bought units in the hedge fund, which was, we regret to say, hit hard by the global financial crisis in the autumn of 2008.

Jyske Bank has received complaints from customers, and the investment product has been mentioned in a few Danish media. The Danish Financial Supervisory Authority issued a reprimand to Jyske Invest on the grounds that the brochure about Jyske Invest Hedge Markedsneutral – Obligationer did not offer a balanced description of the product characteristics and the risks involved. Also Jyske Bank was reprimanded – for not in a general way having taken steps to improve the sales brochure. Neither Jyske Invest nor Jyske Bank concurs with the criticism. The sales brochure for the product expressly mentioned the risk of the hedge fund going bankrupt, which must be termed the worst-possible scenario.

The Chairman of Jyske Bank stated at the Bank’s annual general meeting in March 2010 that Jyske Bank does not dispute that errors may actually in certain cases have occurred in connection with the advisory service provided with regard to Jyske Invest Hedge Markedsneutral – Obligationer, but Jyske Bank does dispute that errors should have been committed in general in its advisory service.

In June 2010, an independent complaints board, the Financial Services Complaints Board, found against Jyske Bank in five cases. In its decisions, the Complaints Board deviated from the usual practice and held that the burden lay with Jyske Bank of proving that it had provided adequate advisory service to the customers in question. Until the autumn of 2009 it was up to the complainant to prove that the advisory service received had been inadequate.

Jyske Bank has maintained throughout that only case-by-case scrutiny will reveal whether the Bank’s advisers have committed actionable errors in their advisory service. The cases with relation to Jyske Invest Hedge Markedsneutral – Obligationer reflect discrete occurrences, and the customers in question acted on the basis of widely different circumstances.

Moreover, we have repeatedly declared that if we have demonstrably committed actionable errors in our advisory service in individual cases, we shall acknowledge liability.

Against that background we decided, after consideration of each of the five individual cases mentioned above, to comply with the decision of the Danish Financial Services Complaints Board. With some other decisions of the Complaints Board we do not intend to comply.

Correspondingly, we have complied on earlier occasions with decisions made by the Complaints Board after factual individual consideration, and we have also closed cases with customers who complained to the Bank direct.

Best Regards,

Oscar Lindblad
Private Banking Copenhagen

Readers Question #2: Hi Gary,  I was just reading over your email and am very intrigued at the possibilities of multi currency investing.I have recently had some major changes in my life as I have resigned from my teaching job.

With that said, I have no severance or insurance starting at the end of January.  Where I am looking for some guidance is whether to invest this money or live off of it until I start to make money again?  I am going to go ahead and order the multi currency report after I hear from you.

My reply: The minimum the bank in the Borrow Low-Deposit High report accepts is $100,000 so I do not feel the report is appropriate.

I am working on a report that looks at investing less in multi currencies via ETFs… but I have a lot more work to go on this project.

Since I am not a financial advisor, I can’t really provide individual advice about how and where to invest but either of the two contacts below may be able to direct you to an advisor who understand multi currency investing.

One good start is with Everbank.  They offer a multicurrency CD.  Jason Coots can help at jason.coots@everbank.com

Another is the Wisdom Tree Emerging Debt ETF. I have a link to this fund’s site below.

Reader Comments #3: Doctor Wickman is a QUACK. His license to practice in Arizona was revoked in the 1980’s. Please Gary use the internet to find out about him for yourself. I believe your good reputation should not be tarnished by promoting someone like Wickman. Because of your credibility, many people may possibly suffer serious harm  if they entrust their medical care to someone like Doctor Wickman. Please disassociate yourself from him. Again, do your own research.

My reply: The readers who introduced me to Dr. Wickman believe they are still alive due to his treatment would disagree as I do.
I find that as much of the established US medical system is a sham as the alternatives.  I personally do all I can to avoid hospitals.  I am about to share an article from USA Today that shows what dangerous places they really are.

The cancer that was on my body is gone (and has been for over a decade) due to what you would call quackery as well… chosen after the regular medical establishment just made the cancer worse.

We are well aware of Quack Watch and the negative data and disagree totally with it and am disgusted by people who tarnish others reputations with no more facts that what they read on the internet.

However to be sure that readers get the entire view this site has covered these quack allegations numerous times.

On the subject of quackery… this is a good time to review a November 16, 2010 USA Today article entitled “Hospital care fatal for some Medicare patients” by Rota Rubin that says (underlines and bolds are mine):An estimated 15,000 Medicare patients die each month in part because of care they receive in the hospital, says a government study released today. The study is the first of its kind aimed at understanding “adverse events” in hospitals — essentially, any medical care that causes harm to a patient, according to the Department of Health and Human Services’ Office of Inspector General.Patients in the study, a nationally representative sample that focused on 780 Medicare patients discharged from hospitals in October 2008, suffered such problems as bed sores, infections and excessive bleeding from blood-thinning drugs, the report found. The federal Agency for Healthcare Research and Quality called the results “alarming.”

Among the findings in the report obtained by USA TODAY:

•Of the 780 cases, 12 patients died as a result of hospital care. Five were related to blood-thinning medication.

Two other medication-related deaths involved inadequate insulin management resulting in hypoglycemic coma and respiratory failure resulting from oversedation.

•About one in seven Medicare hospital patients — or about 134,000 of the estimated 1 million discharged in October 2008 — were harmed from medical care.

•Another one in seven experienced temporary harm because the problem was caught in time and reversed.

I find that there is a lot of quackery in the established community and the way these quacks cover up errors and protect themselves from good, proven low cost alternatives is to brand these treatments as quackery.  This ranges from the ridiculous statements by the US medical establishment that identical prescription drugs from Canada (costing half the price of US pharmaceuticals) might not be safe to condemning those in totally accepted health modalities such as acupuncture,  Chiropractors and Osteopaths and homeopaths.

Dr. Wickman is a fully licensed OD in Ecuador which has a well regulated and honorable medical system and has been practicing there for decades.

One that subject, here is another reader comment about last week’s Q&A that mentioned Dengue Fever. Hello Gary, This is information you might want to forward to your readers.  As a homeopath I know of Gustav Bracho’s program of treating Dengue fever (and other diseases) homeopathically; where there are outbreaks he also treats prophylactically to avoid the disease.  Dr. Bracho lives in Cuba; his research and treatment through homeopathy are being disseminated worldwide, as he has great success in both preventing and curing Dengue fever and other serious diseases.  I heard him speak most recently at a homeopathic conference in Toronto this past October; his research is impeccable, the cures and prevention are real.  Anyone would benefit from using homeopathy.  Fears can be put to rest, once people are aware there are healing alternatives that are available and can be easily used.

Reader Question #4: Gary-  I read your article about Ecuador rats eating a hidden $100 bill. How many rats are there in Ecuador? Do they live in the houses?  Any other info about them?

My Reply: I have never seen a rat in Ecuador. (Except perhaps some of the real estate brokers who triple charge new residents when they sell them real estate.  It makes me feel bad that these expenses are eating up a lot of people’s savings!)

I read that story about Ecuador the rodent rats eating actual cash money and was surprised.  I have seen no rats… few snakes few spiders… But it of course depends on where you go.   Rat populations are probably very different in The Andes versus the coast versus the Amazon, etc. just as in the US.  We have a lot of rats and mice in NC on our farm…I think perhaps they are a part of nature but adopted a little mouser a few years back and she alone (Alice the cat) has changed the character of life on the farm!

Comment’s #5 from a reader from Oregon. Gary, thank you for your recent news letter.  one point you touched on that was of interest was the environmental challenges that will hinder economic recovery.  oregon now has more timber resources in the forest than 20 years ago.  timber left uncut during the ‘spotted owl’ years has now grown in size and added several million board feet to our inventory.  eastern oregon is now being considered for wind generation, and oregon’s coal deposits might be another source of revenue as demands oversees increase.  the conundrum is the very same progressive movement in oregon that halted most aggressive logging practices in the ’70s will no doubt be a major hurdle in the coming years.  oregon once stood on it’s three pillars of economy, ranching, fishing and timber.  environmental laws all but extinguished that prosperity here.  it is the loss of the use of these resources that hinders our recovery.  oregon will receive subsidies from the federal government as an offset to the revenues no longer generated from our forests.  this will put an additional burden on other states where economic recovery has been slow.  oregon, like other states, has the ability to support its state deficit if only allowed to access the resources and markets that are demanding them.  we must make a decision and exercise it.  we must decide which is of more importance, to blindly apply emotional concepts predicated on false science, or the application of practical fiscal responsibility hindered with environmental stewardship.  the choice is ours to make, or not.

Merry Christmas!

My reply: Happy holidays to you.  I grew up in Portland… had many loggers in the family and recall those huge trucks with about 3 logs to fill them barreling down and out of Mt. Hood.  Zig Zag, Clear Lake, Little Crater Lake, Frog Lake, Frying Pan Lake around Mt. Hood and the Coastal Range were our stomping grounds as teenagers.


Oregon Logging truck circa 1970.

It always seems strange when I watch the log trucks in the Blue Ridge with about 20 logs on the truck… and they are pretty small trucks compared to those in Oregon’s past.  The south has mostly private land for timber so the logging continues.


Today’s typical Blue Ridge North Carolina log truck.

This is such an extremely complicated issue polarizing the country and I do not see any quick or easy solution.

The ultimate value of course is added value and we have been testing various approaches to sustainable logging on our farm using the draftwood approach.


#1: Gain value added. This is the era when small and flexible are beautiful. Modern community technology makes it possible for even micro businesses to virtually integrate. I’ll give you a specifics in a moment.

#2: Invest in real estate. I know, I know people keep saying that prices are going down. Yet these same people keep having kids without making more land. This looks like an opportunity distortion to me.

#3: Bet on inflation. I do not see how with the massive government bailouts this will not happen everywhere…to a great extent.

#4: Invest in alternative power and sustainability. The same fundamentals as for real estate are at work…more kids…no more fresh water…trees…soil…clean air…etc. Plus one factor more. Each child born expects more.

#5: Invest in natural health. The current social economic lifestyle is flawed.  The acquisition of stuff creates too much work…leading to too much stress…with too little time…and poor nutrition…leading to pharmaceutical and surgical intervention. This intervention costs too much and is not a pleasant, effective approach that optimizes maximum human efficiency.

Based on this belief, I have been working with a team on a plan for our farm in North Carolina to create Draftwood homes built from local sustainable timber and fueled by micro hydro power.

Here is a sustainable logger we work with…  Ian Snider…  the local advocate of the Draftwood concept.  Draftwood… sustainable harvested, value added timber hauled out by draft horses.


Here is Ian Snider at one of his projects in North Carolina.

So far this has not caught on… but we keep testing the waters.The wood in the guest kitchen house we just completed in Florida came from this sustainable “dead” poplar we collected on our North Carolina farm.

Sustainable Timber


We are turning dead wood, like this poplar log, into a value added product.


This poplar sitting right behind our house died a few years ago and dropped branches on the house all winter.  Last spring we trimmed off the branches and last week a bad winter storm brought it down…we cut it in three pieces and dragged them to one of our fields.

We set up a portable mills in the summer and…


last year cut over a thousand board feet of nice poplar planks.


We used this wood to make the  guest house we renovated in Florida  more beautiful.

Guest house renovation.  This type of vertical business model may not always be the most economical in dollar terms, short term… but this is rich in satisfaction and fun.

Readers Comment #6: Gary, I know you use the word “terror” in your emails to get ratings, and frankly, it’s not part of what the world needs now, which is love and peace. Please reconsider.

My reply. Actually the way we work on the internet the word “terror” might reduce ratings…  but certainly will not help them. Terror is too common a word. Our rankings are increased by finding unusual niche words. But enough internet SEO lingo.

Dangerous Sparks Exist

The point is… there are many sparks that could create terror in the market.  Astute investors and business people need to be considering this. I want readers to be aware of these risks and I won’t pull any punches if they help readers prepare to make their lives better.

We can change ourselves… but probably not human nature and the herd.  This means if there is going to terror and if this creates a stampede… we need to be prepared.

I agree each of us should serve with love and peace in our hearts.

This is why I write so much about using compassion and passion in one’s business and investing.

Merri and I learned an important lesson while living with an Ecuador Yatchak. The shamans give enormous amounts of compassion, gratitude and positive energy in their healing ceremonies. Yet they also wear protective bracelets on their left (energy receiving side) wrist.

I am told there is an old Arabic saying… “Believe in God… but make sure your camels are tied up at night.” If one believes in the power of positive energy… one has to accept that there is negative energy out there as well and we need protection from it. The terror series looks at why there may be terror and how to prepare for the event… so one can still serve with love, gratitude and compassion during the turmoil.

#7: Comments on FM Training.  The duality of nature is why we have expanded our efforts in helping ourselves  (and our readers) tap our inner resources for outer expansion.

This is why we have started a our Quantum Learning Program that can help you create a new avenue of income wherever you live.

The FM Story

In telecommunications and signal processing, FM stands for frequency modulation that conveys information over a carrier wave by varying its instantaneous frequency.

The educational program Merri and I have developed uses a different form of frequency modulation we like to call “Full Mode” that opens enormous opportunity for expansion, understanding, peacefulness as well as greater wealth.  We are sharing this indepth program with a select few through our new teacher program.

FM teaching uses frequency (in music and a number of other ways) to integrate brain waves so the process of absorbing, processing and recalling information is vastly accelerated.  This brings forth the three C’s:  Calm, Clarity and Coherence.

How the Quantum Learning History Brings Opportunity to You Now.

Merri and I are explorers, always looking for what’s next… trying to stay on or ahead of the leading edge.

This journey has lead us to alter the main mission in our lives every seven to 14 years.

During the 43 years we have been investing and doing business abroad, we have enjoyed capturing seven golden trends.

#1: 1970s Gold & Silver.

#2: 1970s investing in Japan, Germany, Switzerland, England, Australia and Hong Kong .

#3: 1980s. The Tigers, Taiwan , Singapore, Malaysia, South Korea & Turkey .

#4: 1990s. South America (which led us to Ecuador).

#5: 2000s. China, India and Eastern Europe.

#6: Invest in Real Estate and Global Micro Businesses throughout.

#7: Bet Against the US Dollar throughout.

Spotting these trends early brought us a strong and continual flow of income.   Now you can benefit from the latest… and perhaps strongest… of all the trends we have stumbled upon.

Our writing and talking about each of these trends over 43 years has helped thousands of our readers make and save millions.   The success of our readers has been a driving force in our lives yet we have always wanted to do more so continued looking deeper for a core idea that we could share that provided income, stability, good health and contentment.

Recent events have moved us closer to this core which is why we are developing a way for a few others to join us in the profits and fulfillment of this quest.

Since we seem to progress in seven year cycles, when we reached our 14th year in Ecuador we started expecting and looking for… “What’s next?”

That search led us to more time in the USA and our recent Super Thinking courses confirmed to us that our FM program has become increasingly pertinent to solving the socioeconomic problems created by accelerating change.

This Quantum Learning helps in innumerable walks of life.   This is why our new teaching program offers extra opportunity for you now.

Problems Create Opportunity

There is a huge and growing problem of accelerating change that requires accelerated learning.  Learning Spanish is just a tiny part of the demand this problem creates.  Expended learning capacity is far more valuable than just being able to speak Spanish.  So we are expanding the FM focus in our business… shifting into overdrive you might say with what we call FM Plus.

FM Plus Frequency Modulation/Full Mode Plus

FM Plus works by focusing on the learner first… the data second.  FM Plus “grows the learner” rather than just expands the information.  The explosion of data we must all process everyday means there is too much information to process already.    Let’s view this learning in terms of plumbing to outline what “Growing the Learner”  means.

If you have 4.5 inches of information flowing through a 4 inch learning pipe, the solution is not to add another inch of information.  The answer is to first create a six inch pipe and then an even larger pipe…a neverending expansion of abilities!

FM Plus incorporates Frequency Modulation…  7th degree exploration and Core Revelation (wormholes – universal expansion and shortcuts) to expand the learner’s thinking and information processing ability.

We’ll do this through our FM Plus Process which we have been using in our Super thinking Plus Spanish course. Now we are integrating this process into our International Investing and Business courses as well.  This means we’ll provide this training nine times in the US in 2011.

The demand for FM far exceeds the numbers Merri and I can handle in nine seminars.  Because Merri and I don’t have time to do more seminars we have added the teacher training program.

The teacher training program is described below, but let me say up front that this is a Beta program.  We have never trained teachers before. This means we expect the program to evolve… to probably offer more.

As mentioned we will conduct nine seminars in 2011.  Trainees in our FX Plus training plan can attend all seminars in 2011.  They should attend at least five.

There will be a trainee review session everyday during these nine courses.  It is most important to jump on those moments of clarity as they occur.

There will also be online personal training via conference calls and on Skype and via videos…with no additional expense of course.

FX Plus training plan teaches how to teach and how to create your own business simultaneously.

Each trainee will have our upcoming course on “How to Have Your Own Seminar Business” to help teachers see ways to make money by conducting their own seminars.

This course includes…

#1: How to earn millions from seminars courses and tours.  See how we have earned as much as $200,000 for a weekend’s work. (Once $135,000 in two days.)

#2: How to build a seminar business.  See the one day Washington-Atlanta-San Francisco system that helped our courses evolve and how to use this approach to help your teaching grow.  Gain strategic partnerships for added wealth.

#3: When and when not to use other speakers.  Seminars for speakers… a way to get it all out as your bank accounts gets it all in.   .

#4: How to use other speakers.  Gain the key to the room and the people within. Why the golden pen is mightier than both a glib tongue, the sword and the overloaded brain.

#5: Dealing with hotels.  Why the marketing does not talk to catering who will not communicate with accounting and the mess this means for you.  How to chose… arrange and survive the hotel.  Forget the $11,314 coffee bill… for swill.

#6: Scheduling seminars.   Magic dates and times for marketing… how far in advance to market and seminar death dates to avoid.

#7: Creating back end business.  How Merri made $12,936 dollars in 37 minutes by just standing still.

#8: Three types of courses… delegate driven… speaker driven… third party driven.

#9: The  importance of strategic partnerships.

#10: How to market seminars, courses & tours.

#11: List building.

#12: Alternative seminar and course location options.

#13: The benefits each of big seminars and  small courses.

#14: How to survive the dreaded problems.  What to do when enrollments are low. Handling the heckler, the takeover and the unmuted cell phone.  When the hotel fails.  Surviving speaker no shows and all of those types of things.

When it comes to conducting seminars, courses and tours, there are few people with more experience than Merri and me.  Over 43 years we have organized, marketed and conducted thousands of tours for tens of thousands in dozens and dozens of countries (even behind the Iron Curtain).  This course shares how we have done this… what we did right… what we did wrong… and what you can do better.

We’ll only train a small number of teachers to begin and our goal is to these teachers to work in their own ways and methods including of course teaching Spanish.  Teachers of our Spanish program do not have to speak Spanish by the way. In fact I am prohibited from speaking Spanish when I teach. You’ll learn why as a teacher.

Since this is a Beta program and we have never done this before we cannot guarantee who we will work with and who we won’t.

The FM Plus Plan Goes Way Beyond Spanish

Our training will teach you how to teach languages but covers many… perhaps all fields… and on your own.

For example. FM Plus can be applied to forex trading and investing.  Athletes of all types… golfing being one common sport benefit.  The Soviet Union… even though a third world country… excelled in the Olympics… as well as beating the USA into outer space… because it integrated FM teaching tactics as developed by Dr. Gregori Lozanov (one of Merri’s teachers) into its educational system.

Our FX Plus plan goes far beyond Lozanov and allows you to enhance whatever subject you wish to teach.

What You Receive

When you become an FM Plus Trainee, you are automatically enrolled in our International Club which allows you to attend all nine of our investment, business, and Spanish courses in 2011 (worth $5,981) FREE.

Here is the 2011 schedule

Jan. 13-16, 2011 Super Thinking + Spanish, Mt. Dora Florida ($749 or couple $999)

Feb. 11-12, 2011  International Investing Made EZ.  Mt. Dora FL ($499 or couple $749)

Feb. 12-13, 2011   International Business Made EZ,  Mt. Dora FL ($499 or couple $749)

March 10-13, 2011  Super Thinking + Spanish, Mt. Dora Florida ($749 or couple $999)

June 24-25, 2011  International Investing Made EZ,  Jefferson NC. ($499 or couple $749)

June 25-26, 2011   International Business Made EZ,  Jefferson NC. ($499 or couple $749)

Oct. 7-8, 2011  International Investing Made EZ,  Jefferson, NC. ($499 or couple $749)

Oct. 8-9, 2011  International Business Made EZ , Jefferson NC. ($499 or couple $749)

Nov. 3-6, 2011   Super Thinking + Spanish,  Mt. Dora Florida. ($749 or couple $999)

You are admitted to the teacher review sessions at all the courses.

You participate in videos and conference calls for all teacher trainees.

You’ll receive individual Skype training.

There are four payment plans:

#1 and #2: New enrollment full or monthly. This is for teachers who are not International Club members and who have not already attended a Super Thinking + Spanish seminar.  The fee is $2,900 or $259 per month for 12 months.

#3 and #4: Super Thinking plus Spanish Coupon deducts $750 full or monthly. If you have attended a Super Thinking + Spanish seminar… you have a coupon worth $750 so you pay only $2,250 or $259 a month for 9 months.

You attend our January 13 to 16 Super Thinking plus Spanish and learn how to speak Spanish in four days

Enroll ($799)

Enroll couple ($999)

Or finalize your teacher enrollment for the year.  Please select the plan that suits you.

We will be back in touch by email, but please let us know if you’ll attend the first training January 13- 16 in the comments section of your enrollment.

New Enrollment. $2,900 .

Monthly Payment Option: $259 a month for 12 months

Super Thinking less Spanish Coupon. $2,250.

We will conduct nine seminars in 2011 and hope you’ll join us for at least five of them as a trainee in our FM Plus (Frequency Modulator) training plan.Gary

Link to the Wisdom Tree Emerging Debt ETF.
Read “Hospital care fatal for some Medicare patients