Tag Archive | "Morgan Stanley"

Why We Need to be Distrustful


One important part of value investing is to keep trading costs down.  One way we can do this is to invest in good value shares so we don’t need to that much. Let’s buy and hold good value for the long term.  When we let value help us select our investments we are also less vulnerable to being misguided by bankers or brokers with conflicted interests.

However there is a problem.

There is a good chance you read how Martin Shkreli became the most hated man in America because of his price gouging with pharmaceuticals.  Yet he was arrested for securities fraud.

The Independant News

Image of Martin from the Independent (1)

The fact that Shkreli was linked to both financial services and health care is not surprising because health care and investment services share a connected theme. 

The problem in both industries is that they are rife with conflicts of interest.   The conflict stems from the fact that health care givers and financial advisers are also both sellers of health care and financial services respectively.

An old saying is “If you ask a hammer for a solution, the answer will always be a nail”.

A New York Times article “Why Investors Are Right to Be Distrustful” shows once again how when we need big banks and brokers to help, they hurt investors, even their customers, instead.

This article explains how many banks and financial firms, like JPMorgan, steer customers into expensive in-house mutual funds and hedge funds, even when better, less expensive options are better.  Firms are at least supposed to let their clients know of the options.   JPMorgan, from 2008 to 2015, did not and due to numerous pervasive conflicts agreed to admit their wrongdoing, pay a settlement of $307 million and improve their disclosure process.

The article said, “After the deal was done, the bank took little true responsibility for the misconduct; a spokesman described the problem as “disclosure weaknesses,” adding that they were “not intentional and we regret them.”  But in fact, the violations were more like standard operating procedures than unintended lapses.  JPMorgan brokers told The New York Times that they were pressured by their bosses to put clients into overpriced and underperforming proprietary funds.”

Regretfully this is nothing new.  I recall a friend who was a broker for Merrill Lynch in Hong Kong in the 1970s.  He was regularly grumbling because Merrill had a pay system that forced him to push shares that were not in his client’s best interests.  As I recall he had a three tier system:  A shares, B shares and C shares.  Merrill wanted him to push the “A” shares as these paid the highest commissions.  Plus at the end of each pay period he was expected to have sold a certain percentage of “A” shares.  The problem my friend had was that the “A” shares were often really lousy investments, so he could not honestly do what Merrill demanded AND look after his client’s best interest.

There are ways to beat this problem.  When we started our new course on value investing, I decided to find the least expensive way to invest in good value, for even the smallest investor.  At our October 2015 Value Investing Seminar I outlined a portfolio of 17 good value, Country ETFs.   This portfolio was created based on my 50 years of experience and research from several of the sharpest, good value mathematicians.

According to the analysis I put together, the equally-weighted combination of these ETFs offers one of the easiest ways to attain the highest expectation of long-term risk-adjusted performance.  In fact, with time above average performance is almost guaranteed.

The chart below, by Keppler Asset Management shows how after just 18 months this type of portfolio has a 75% chance to outperform the Morgan Stanley MSCI World Index of shares.  After three years the odds are 85% that this portfolio will outperform the MSCI World Index and after eight years the odds rise to 95%.

keppler profit probablility

Click on chart to enlarge.

The keys to this portfolio are good value, low cost, minimal fuss & bother.  Plus a great savings of time.  Trading is minimal, usually not more than one or two shares are bought or sold in a year.  I wanted to find the very least expensive way to create and hold this portfolio so I performed a test.

The Test for Low Cost Trading

Research put every part of this portfolio in place, except knowing the best, easiest and least expensive way to buy.  A search for an optimal way to buy and hold boiled down to two methods.  One tactic to test was to use a unique online broker that appeared to offer the lowest cost deal.  The other approach was to use a community bank in Smalltown USA.  The small town bank that I use looks after my 401K trust account and their service is first class.  The benefit of small banks is that they still treat us as a human beings (instead of a number) and when we need, it’s easy to go right to the top to answer a question or get a problem resolved.  There are no call centers.  The bank and the person looking after my account is just around the corner.

I created a test to see which offered the least expensive service.

Working with my banker in Smalltown USA,  I created two accounts, one at the online broker and the other at the bank. I placed $40,000 in each.

I set up the order for the 17 country ETFs online, while my trust manager set up orders for the identical amounts of the same shares in his system.  Then we got on the phone, coordinated our timing and on a count of three each pushed the button “BUY”.

I am sharing the results of this test with Pi (Purposeful Investing) subscribers this week and want to offer you a chance to subscribe to Pi before I release these results.  The savings you can gain on any purchase of 17 shares has the potential to be more than the cost of the Pi subscription.  Learn below how to join us with Pi.

Regardless of whether you subscribe and review the test, here is the portfolio that I have invested in for your review.

good value portfolio test

Click on image to enlarge.

Beware of medical practitioners and investment advisers who offer services, products or procedures that give them income and profit.  Their advice may be conflicted.  Rely instead on value and mathematics.  They always reflect truth.

Last Friday our shopping cart provider had a problem that stopped many of you from taking advantage of our special free seminar offer, so I have extended this  opportunity, that ended Sunday, through today.

Gary

(1) www.independent.co.uk martin shkreli the drug industry

(2)  http://www.nytimes.com  Why investors are right to be distrustful

 

Gain Comfort, Time and a Value Edge With Pi

If you subscribe to our Purposeful investing Course today, you’ll get our Value Investing Seminar online FREE

The goal of our seminar is not to make money one time, but show how to repeatedly find special profit opportunities that enhance safety as they increase profit.

Learn an investing strategy that reduces stress with slow, worry free purposeful tactics that cash in on financial rather than economic news.

I am sending this report “How to Grab Sequential Value Profits” to subscribers of the Purposeful investing Course (Pi)  this weekend and want to give you a chance to  save $517.90 if you subscribe to Pi.

The annual fee for Pi is $299.  I have reduced this to $197 in this special offer.  You receive the updated for 2017 $29.95 report “Three Currency Patterns For 50% Profits or More”.  You receive the $39.95 report “Silver Dip 2017”.  You also receive the $49 report “How to Grab Sequential Value Profits” plus our $297 online seminar for total savings of $517.90.

Subscribe to a Pi annual subscription for $197

Learn from the Value Investing Seminar, our premier course that we have been conducting for over 30 years.  Tens of thousands of delegates have paid up to $999 to attend.  Now you can join the seminar online FREE in a special offer described below.

This three day course is available in sessions that are 10 to 20 minutes long for easy, convenient learning.   You can listen to each session any time and as often as you desire.

The sooner you hear what I have to say about current markets, the better you’ll be able to cash in on perhaps the best investing opportunity since 1982.

seminars

Tens of thousands have paid up to $999 to attend.

Improve Safety – Increase Profits

Start this weekend.  Learn how to improve the safety and profit of your savings and investments by selecting diversified, good value investments in a multi-currency portfolio during stock market downturns.  Few decisions are as important to our wealth as the value of the markets and currencies we invest in.

Double Risk

Many investors missing the great long term risk, the falling US dollar.  The greenback has been strong for the past five years, but this is temporary.   The dollar’s strength came after the great recession of 2009 just as there was a temporary dollar strength after the great recession of the 1980s.  In the 1980’s that dollar strength lasted five years.  Then the dollar collapsed over 50% versus major currencies.  Now the greenback is in a similar place.

The strong US dollar and low interest rates created  a bigger than normal stock breakout, but the US market has been in an overall bear trend since 2000.  Now both, the market and the greenback are scheduled to fall.

This year I celebrate my 51st anniversary in the investing business and 49th year of writing about global investing.  Our reports and seminars have helped readers have better lives, with less stress yet make fortunes during up and down markets for decades.  This information is invaluable to investors large and small because even small amounts can easily be invested in the good value shares we cover in our seminar.

Stock and currency markets are cyclical.  These cycles create extra profit for value investors who invest when everyone else has the markets wrong.  One special seminar session looks at how to spot value from cycles.  Stocks rise from the cycle of war, productivity and demographics.  Cycles create recurring profits.  Economies and stock markets cycle up and down around every 15 to 20 years as shown in this graph.

stock-Charts

The effect of war cycles on the US Stock Market since 1906.

Bull and bear cycles are based on cycles of human interaction, war, technology and productivity.  Economic downturns can create war.

Here is the war stock cycle.  Military struggles (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.  The military technology shifts to domestic use.  A boom is created that leads to excess.  Excess leads to correction. Correction creates an economic downturn and again to war.

Details in the online seminar include:

* How to easily buy global currencies, shares and bonds.

* Trading down and the benefits of investing in real estate in Small Town USA.  We will share why this breakout value is special and why we have been recommending good value real estate in this area since 2009.

* What’s up with gold and silver?  One session looks at my current position on gold and silver and asset protection.  We review the state of the precious metal markets and potential problems ahead for US dollars.  Learn how low interest rates eliminate  opportunity costs of diversification in precious metals and foreign currencies.

* How to improve safety and increase profit with leverage and staying power.  The seminar reveals Warren Buffett’s value investing strategy from research published at Yale University’s website.  This research shows that the stocks Buffet chooses are safe (with low beta and low volatility), cheap (value stocks with low price-to-book ratios), and high quality (stocks of companies that are profitable, stable, growing, and with high payout ratios). His big, extra profits come from leverage and staying power.  At times Buffet’s portfolio, as all value portfolios, has fallen, but he has been willing and able to wait long periods for the value to reveal itself and prices to recover.

keppler asset management chart

This chart based on a 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Time is your friend when you use a good value strategy.  The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.

Learn how much leverage to use.  Leverage is like medicine, the key is dose.  The best ratio is normally 1.6 to 1.  We’ll sum up the strategy; how to leverage cheap, safe, quality stocks and for what period of time based on the times and each individual’s circumstances.

Learn to plan in a way so you never run out of money.  The seminar also has a session on the importance of having and sticking to a plan.  See how success is dependent on conviction, wherewithal, and skill to operate with leverage and significant risk.  Learn a three point strategy based on my 50 years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

Enjoy investing more with slow, worry free, good value investing.  Stress, worry and fear are three of an investor’s worst enemies.  These are major foundations of the Behavior Gap, a trait exhibited by most investors, that causes them to under perform any market they choose.  The behavior gap is created by natural human responses to fear.  The losses created by this gap grow when investors trade short term, under stress.

Learn how to put meaning into your investing by creating profitable strategies that combine good value investments with unique, personal goals.

Learn what I am doing with my good value portfolio.  My personal investment portfolio comes from a continual analysis of international stock markets and a comparison of their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.

We’ll update the good  value markets for the beginning of 2017 next week, but the markets included in this 2016 portfolio are:

Norway
Australia
Hong Kong
Germany
Japan
Singapore
United Kingdom
Taiwan
South Korea
China

These markets have been chosen based on four pillars of valuation.

• Absolute Valuation
• Relative Valuation
• Current versus Historic Valuation
• Current Relative versus Relative Historic Valuation

The online seminar also reveals how to use Country ETFs to easily construct a diversified, risk-controlled, equally weighted representative country portfolios in all of these good value countries.

To achieve this goal my portfolio consists of Country Index ETFs that track an index of shares in a specific country.  These country ETFs provide diversification into a basket of equities in the good value countries.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

This is an easy, simple and effective approach to zeroing in on value because little management and guesswork is required.

The seminar also discloses the results of a $80,000 share purchase cost test that found the least expensive way to invest in good value.  The keys to this portfolio are good value, low cost, minimal fuss and bother.  Plus a great savings of time.  Trading is minimal, usually not more than one or two shares are bought or sold in a year.  I wanted to find the very least expensive way to create and hold this portfolio so I performed a test.

The Test for Low Cost Trading

Research put every part of this portfolio in place, except knowing the best, easiest and least expensive way to buy.  A search for an optimal way to buy and hold boiled down to two methods.  One tactic to test was to use a unique online broker that appeared to offer the lowest cost deal.  The other approach was to use a community bank in Smalltown USA.  The small town bank that I use looks after my 401K trust account and the service is first class.  The benefit of small banks is that they still treat us as a human beings (instead of a number) and when we need, it’s easy to go right to the top to answer a question or get a problem resolved.  There are no call centers and the bank and the person looking after my account is just around the corner.

I created a test to see which offered the least expensive service.

Working with my banker in Smalltown USA,  I created two accounts, one at the online broker and the other at the bank. I placed $40,000 in each.

I set up the order for the country ETFs online, while my trust manager set up orders for the identical amounts of the same shares in his system.  Then we got on the phone, coordinated our timing and on a count of three each pushed the button “BUY”.

I share the results of this test in the seminar.  The savings that can be gained on any purchase of country ETFs has the potential to be more than the cost of the seminar.

gary-scott-seminar

I have good news about the cost of the seminar as well.   For almost three decades the seminar fee has been $799 for one or $999 for a couple. Tens of thousands paid this price.

In this special offer, you can get this online seminar FREE when you subscribe to our Personal investing Course.

The Purposeful investing Course (Pi) teaches exactly what to do in situations such as we are seeing in global stock markets now.   This course is based on my 50 years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

Enjoy Repeated Wealth

Pi’s mission is to make it easy for anyone to have a strategy and tactics that turn market turmoil into extra profit.

Pi reveals investing secrets and the sciences that make investing easy, safer, less time consuming and increases the chances of profit.

One secret is to invest with a purpose beyond the cash.  Another tactic is to have staying power.  This means not being caught short and having to sell during a period of loss.  This also means having enough faith in a strategy that we stick to the plan.  When we invest with purpose, doing what we love, and when we believe in the basic mathematics of value, we enjoy the process more and are more likely to hold on during down times, when most poor investors panic and sell.

Lessons from Pi are based on the creation and management of a Primary Pi Model Portfolio, called the Pifolio.  There are no secrets about this portfolio except that it ignores the stories from economic news (often created by someone with vested interests) and is based mainly on good math that reveals the truth through financial news.

The Pifolio is a theoretical portfolio of MSCI Country Benchmark Index ETFs that cover all the good value markets using my (almost) 50 years of global experience and my study of the analysis of four mathematical investing geniuses (and friends).

The Pifolio analysis begins with a continual research of international major stock markets that compares their value based on:

#1:  Current book to price

#2:  Cash flow to price

#3:  Earnings to price

#4:  Average dividend yield

#5:  Return on equity

#6:  Cash flow return.

#7:  Market history

We combine the research of several brilliant mathematicians and money managers with my years of investing experience.

This is a complete and continual study of what to do about the movement of international major and emerging stock markets.  I want to share this study throughout 2017 with you.

This analysis forms the basis of a Good Value Stock Market Strategy.   The analysis is rational, mathematical and does not worry about short term ups and downs.   This strategy is easy for anyone to follow and use.  Pi reveals the best value markets and provides contacts to managers and analysts and Country Index ETFs so almost anyone can create and follow their own strategy.

A country ETF provides diversification and cost efficiency by spreading one simple, even small investment into a basket of equities in a good value stock market.  The costs are low and this type of ETF is one of the hardest for institutions to cheat.  Expense ratios for most ETFs are lower than those of the average mutual fund.

Little knowledge, time, management or guesswork are required.  The investment is simply a diversified portfolio of good value indices.  Investments in an index are like investments in all the shares of a good value market.

Pi opens insights to numerous long term cycles that most investors miss because they have not been investing long enough to see them.

For example in the 1980s, a remarkable set of two economic circumstances helped anyone who spotted them become remarkably rich.  Some of my readers made enough to retire.  Others picked up 50% currency gains.  Then the cycle ended.  Warren Buffett explained the importance of this ending in a 1999 Fortune magazine interview.  He said:  Let me summarize what I’ve been saying about the stock market: I think it’s very hard to come up with a persuasive case that equities will over the next 17 years perform anything like—anything like—they’ve performed in the past 17!

I did well then, but always thought, “I should have invested more!”  Now those circumstances have come together and I am investing in them again.

The circumstances that created fortunes 30 years ago were an overvalued US market (compared to global markets) and an overvalued US dollar.  The two conditions are in place again!   There are currently ten good value (non US) developed markets,  plus 10 good value emerging markets.

Pi shows how to easily create a diversified, worry free portfolio in some of these good value markets using Country Index ETFs.

The current strength of the US dollar is a second remarkable similarity to 30 years ago.   The dollar rose along with Wall Street.  Profits came quickly over three years.  Then the dollar dropped like a stone, by 51%  in just two years.  A repeat of this pattern is growing and could create up to 50% extra profit if we start using strong dollars to accumulate good value stock market ETFs in other currencies.

This is the most exciting opportunity I have seen since we started sending our reports on international investing ideas more than three decades ago.  The trends are so clear that I have created a short, but powerful report “Three Currency Patterns for 50% Profits or More.”   This report shows how to earn an extra 50% from currency shifts with even small investments.  I kept the report short and simple, but included links to 153 pages of  Good Value Stock Market research and Asset Allocation Analysis.

The report shows 20 good value investments and a really powerful tactic that shows the most effective and least expensive way to accumulate these bargains in large or even very small amounts (less than $5,000).  There is extra profit potential of at least 50% so the report is worth a lot.

This report sells for $29.95 but you’ll receive the report, “Three Currency Patterns For 50% Profits or More” FREE when you subscribe to Pi.

Plus get the $39.95 report “The Silver Dip 2017” free.

With investors watching global stock markets bounce up and down, many missed two really important profit generating events.  The price of silver dipped below $14 an ounce as did shares of the iShares Silver ETF (SLV).   The second event is that the silver gold ratio hit 80 and has remained near this level, compared to a range of the 230s only two years ago.

These two events are a strong sign to invest in precious metals.

I prepared a special report “Silver Dip 2017” about a new leveraged speculation that can increase the returns in a safe portfolio by as much as eight times.  The purpose of the report is to share long term lessons about speculating in precious metals gained through 30 years of speculating and investing in gold and silver.

The low price of silver offers special value now so I want to send you this report because the “Silver Dip 2017” offers enormous profit potential in 2016.

Subscribers who acted on the report when it was originally issued  picked up a fast 54.1% profit.  The report updates what to do in 2017.

Save $517.90 If You Act Now

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but to introduce you to this online, course that is based on real time investing, I am knocking $102 off the subscription.  Plus you receive FREE the $29.95 report “Three Currency Patterns For 50% Profits or More”, the $39.95 report “Silver Dip 2016”, the $49 report “How to Grab Sequential Value Profits”  and our latest $297 online seminar for a total savings of $517.90.

ecuador-seminar

Triple Guarantee

Enroll in Pi.  Get the first monthly issue of Pi and the three reports Value Investing Seminar right away. 

#1:  I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free purposeful investing.

If you are not totally happy, simply let me know.

#2:  I guarantee you can cancel your subscription within 60 days and I’ll refund your subscription fee in full, no questions asked.

#3:  You can keep the three reports and Value Investing Seminar as my thanks for trying.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential.

Subscribe to a Pi annual subscription for $197 and receive all the above.

Gary

 

 

Bad Banking News


Golden Rule of Investing #3 is that there is always someone trying to steal from you.

Recent bad banking news fortifies this fact and shows that the bad guys are often the biggest of the establishment.  The Wall Street Journal announced bad banking news in a recent article (1).

Jyske-bank

Gary Scott at Jyske Bank’s Trading Hall.

For more than two decades I visited Jyske Bank’s Trading Hall.

Jyske-bank

One lesson I learned was that I did not want to trade against this team of experts backed by huge amounts of capital and the most modern facilities.  However I always believed that Jyske, a small bank in global terms, had a great deal of integrity.

Such honesty has been lacking in the bigger international banks.

The bad news is that as reported by the Wall Street Journal, Morgan Stanley is quietly increasing its fixed-income trading business to help Chairman and Chief Executive James Gorman hit long-held profitability targets.

The bad news is that Morgan Stanley nearly collapsed in late 2008, when it lost a fortune in such trading.

In February this year Morgan Stanley agreed to pay $2.6 billion to settle claims linked for misleading investors with mortgage-backed securities issued before the financial crisis and its part in the housing bubble that triggered the 2008 financial crisis.

In  April the bank was fined $2 million for inaccurately reporting its short positions — bets that certain stocks would fall — over six years.  It was claimed that during one 13-month period, the bank failed to report short positions on nearly 4 billion shares held in foreign affiliates.

In May 2015 the bank agreed with the Attorney General of New York over the payment of about $500 million to settle claims for misleading investors.

Do we want this bank that might be advising us (or the broker we use) to now be trading against us?

I am not just blaming Morgan Stanley.  They are at the bottom of a list of major US banks in terms of mortgage-related fines. Bank of America and JPMorgan Chase were much more involved in the mortgage scandal.  They paid $73 billion and $26 billion respectively to settle claims, while the losses of Morgan Stanley were estimated at $4.5 billion.

Last year Goldman Sachs was fined for over pricing rule violations stemming from its “dark pool,” marking the latest in a string of recent enforcement actions targeting anonymous trading platforms.

Regulators claimed that Goldman’s dark pool executed nearly 400,000 trades that were at inferior prices, in violation of investor protection rules designed to ensure customers are getting the best deal.

About the same time, New York Attorney General filed a lawsuit against a Barclay’s Bank dark pool alleging more serious violations, including claims that Barclays lied to investors by giving high-speed traders unfair advantages, even though the bank had pledged to police the pool for “predatory” trading.

The intentions of management at most big financial institutions must be suspect.  The systems have been focused on enhancing the girth of their own wallets rather than those of account holders.

In another case, UBS, Citbank, Barclays, Deutsche are some of the banks who have paid more than $9 billion to settle allegations that some of their traders manipulated Libor and other related interest rate benchmarks.

The allegation is that traders intentionally moved the rates close to the time of the fix to benefit their own trading books.  The traders even joked about this and in one email, a trader said, “If you ain’t cheating, you ain’t trying.”

This is one more example of  greed dominating the history of investment trading.  Since equity trading began, there has been a never ending battle between authorities and unethical trading.  Every time a loophole is closed, another is found.  We cannot depend on the authorities to totally protect us as investors.  Nor can we expect our banks and brokers to protect us either.

This leads back to the Golden Rule of Investing #3. “There is always someone trying to rob you when you trade“.  This is why I have a relentless search for value, buy and sell as little as possible and invest in long term strategies that can be slow to evolve.

Robbers will try to tempt you with great stories of how to make fast bucks.  Sometimes they are true, but more often misleading at the best and downright dishonest or even worse.

We cannot eliminate the big banks nor can we do much to change the system.  However, we can protect ourselves by recognising banks as a necessary evil and avoid trading and speculation as much as possible.

Gary

(1)  wsj.com  Morgan Stanley revisits bonds

If I Live Long Enough

“If I Live Long Enough, I’ll really cash in next time”.   I made this promise to myself in the 1980s. A remarkable set of economic circumstances helped anyone who spotted them become remarkably rich.  Some of my readers made enough to retire.   Others picked up 50% currency gains.  I didn’t do much to invest then, but I did what I could as the profits rolled in for about 17 years.

Then the cycle ended.  Warren Buffet explained the importance of this ending in a 1999 Fortune magazine interview.  He said: Let me summarize what I’ve been saying about the stock market: I think it’s very hard to come up with a persuasive case that equities will over the next 17 years perform anything like—anything like—they’ve performed in the past 17!

Now I see those circumstances headed our way again.

The Dow Jones Industrial recently soared past 18,000 and reached an all time high.   So why aren’t average investors all rich?   There are several answers.  First, even though the Dow has peaked, for the last 17 years the US stock market has been in a bear trend.  You’ll see why in a moment.  Another reason why the investors have not done so well is because of currency loss.

One final reason why profits have not been so good.  Someone, probably someone you trust, has been stealing from you.

One of the biggest obstacles in profiting from the upcoming circumstances has been and remains the financial system.  The reality is that banks and brokers have been structuring investments that are sure to lose.  They sell you on these investments and then another division of the very same bank (or broker) that recommended the investment, bets against you.   The bank knows that the investment is toxic.  To add insult to injury, many of these same institutions cheat you on the way in and the way out (when you buy and sell a share) of the bad investment.  Most brokers and bankerds are interested in your money making them rich, not in helping increase your wealth.

Three Patterns Create 50% profits.

Despite the predators on Wall Street who are waiting to take big gouges out of your savings and wealth, equities are still the best place to invest for the long term.  This chart from the 24 page Keppler Asset Management 2014 Asset Allocation Review shows that over the past 80+ years equities have dramatically outperformed other types of investments.

keppler

Because of the predators on Wall Street (and every stock market in the world) the search for good investments requires a relentless search for value.   Your investments have to be good enough to reap an outstanding profit even after the parasites siphon off part of the profit.

To take advantage of the once every 17 year circumstances, I chose to track Keppler Asset Management who continually researches developed and emerging markets globally.  Keppler is one of the best market statisticians in the world and numerous very large fund managers use his analysis to manage funds such as State Street Global Advisors.  Keppler compares the value of each share in each market based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.  From this study of monumental amounts of data Keppler develops a Good Value Stock Market Strategies.  The analysis is based on long term, rational, mathematical facts and does not worry about short term ups and downs.

From Keppler I learned that market timing is not the way to get these high profits.  Another graphic from the 2014 Keppler Asset Allocation Review explains why.

keppler

Click on image to enlarge.

A dollar invested 88 years ago in Treasury bills rose to $20.58.  The same dollar invested in U.S. stocks over the 88 years grew to be was worth $4,677, UNLESS you missed the best 43 months.  Literally all of the the Dow’s growth in 1,056 months came in 43 of those months.   Your odds have been one in 24, better than roulette perhaps, but not good enough.  Plus even after these odds, the predators are going to take their cut.  You have to ask, “Am I that good at timing?”

The better alternative to timing is investing long term indexing based on value.  Long term strategic investing in market indices reduces the amount of trading.  Low trading activity is important because trades are where you are most vulnerable to predatory tactics.

A part of the long term strategic trading is to invest in low fee diversified Index ETFs.  This simplifies your search for value because it focuses your research into lumps.

A comparison of US versus German stock market indexes gives an example of lump research and you can create good value, low cost, diversified portfolios that offer maximum potential for profit as they reduce risk.

Keppler’s research shows that Germany’s stock market is a good value market.   Keppler lumps all the shares (or at least 85% of the shares) into the calculations.  There is no attempt to select any one specific share. Keppler’s research shows that the US stock market index (a lump of about 85% of all the US shares) is now a bad value.

Germany has the world’s fourth largest economy.  The country is the third largest exporter in the world and in 2013 recorded the highest trade surplus in the world making it the biggest capital exporter globally.  Yet German shares have been overlooked.  German share prices are cheap.

The German Stock Market as of January 2015 in terms of US dollars has a relative price to book value ratio of  .78,  a relative price earnings ratio of  0.87 and a relative dividend yield of 1.12.  The US Stock Market has a much higher relative price to book value ratio of 1.29, a relative price earnings ratio of 1.07 and a relative dividend yield of 0.81.  German shares cost much less, compared to the values and earnings, than US shares.  German shares pay much higher dividends as well.

Keppler predicts that the US Stock Market (which is ranked as a sell market by Keppler) will have an annual index gain for the next five years of  3.1% and a total return (with dividends) or a total five year return of 21.7%.  The same calculations for the German Market predicts an average annual index gain over the next five years of 7.5% and a total return (with dividends) or a total five year return of 47.3%.

Which would you rather buy,  a 47.3% return sold for 78 cents on the dollar or a 21.7% return sold for $1.29 on the dollar?

You can forget about any specific share in the US or Germany and invest into an index (in this case the Morgan Stanley Capital Index) which represents about 85% of all the shares traded on the exchange.

You can invest in ETFs that passively invest in all the shares of the index in stock markets that offer good value.  iShares investment company for example has  an ETF that invests in 85% of the shares traded on Wall Street.

ishres

This ETF icalled the iShares USA (symbol EUSA) has risen from 22.91 to 43.40 or 89% in the past five years.

iShares also offers an ETF that invests in about 85% of the stocks listed on the German Stock Exchange (Symbol EWG).  EWG has risen from 19.70 to 28.13  or 42% in the past five years.

ishares

Keppler’s lump reseach shows that Germany is a good value market.   One simple (even very small) investment in iShares Germany MSCI Index ETF gives you a portfolio  of almost all the shares traded on Germany’s largest stock exchange in Frankfurt.  This ETF is a share traded on the New York Stock Exchange. The ETF invests in 85% of the shares in Germany.  This ETF is a passive fund that does not try to outperform the growth of the German Stock Market. The managers simply track the investment results of the MSCI Germany Index.  The MSCI Germany Index is designed to measure the performance of the large and mid cap segments of the German Index which is composed of the stocks of 54 different German companies and covers about 85% of all the German equities.  Germany’s ten largest companies compose about 60% of the index.  These ten companies are:  BAYER (Health Care) composes 9.91% of the index – SIEMENS (Industrials) 7.89% – DAIMLER (Consumer Discretionary) 7.04% – BASF (Materials)  6.81% – ALLIANZ (Financials) 6.65% – SAP STAMM (Info Tech) 5.69% – DEUTSCHE TELEKOM (Telecom Srvcs) 4.46% – DEUTSCHE BANK NAMEN  (Financials) 3.66%  – VOLKSWAGEN VORZUG (Consumer Discretionary) 3.18% – BMW STAM (Consumer Discretionary)  3.15%.

You lump your research. You lump your investment.  This makes it easy to capture the powerful economic circumstances that are unfolding now.

Just investing in Germany is not enough.  There are currently ten good value developed markets, Australia, Austria, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore and the United Kingdom.  Plus there are 12 good value emerging markets. You can easily create a diversified portfolio in each or all of these countries with Country Index ETFs.

Investing in many stock markets through ETFs gives you opportunity in the second pattern of the falling US dollar.  Preserving the purchasing power of your earnings, savings and wealth requires currency diversification.

The strength of the US dollar over the past five years is a second remarkable similarity to 30 years ago.  In 1980, the dollar rose along with Wall Street.  Profits came quickly over three years.  Then the dollar dropped like a stone, by 51%  in just two years.  A repeat of this pattern is growing and could create up to 50% extra profit if you start using strong dollars to accumulate good value stock market ETFs in other currencies.

For example because of fears about the euro, EWG, the German ETF is down 9 percent over the last 12 months and down 8 percent over the last six months.  These declines are created by currency concerns.  When the euro regains strength, the shares have the potential to appreciate even more.

This is the most exciting opportunity I have seen since we started sending our reports on international investing ideas more than three decades ago.  There is so much more to write and the trends are so clear that I have created a short, but powerful report “Three Currency Patterns For 50% Profits or More.”  This report shows how to earn an extra 50% from currency shifts with even small investments.  I kept the report short and simple, but included links to 153 pages of Keppler Asset Stock Market and Asset Allocation Analysis so you can keep this as simple or as complex as you desire.

The report shows 22 good value investments and a really powerful tactic to use that allows you to accumulate these bargains now even in very small amounts (even $5,000).  There is extra profit potential of at least 50% so the report is worth a lot.

Order the report here $29.95

Research shows that most people worry about having enough money if they live long enough.  I never thought of that.  I just wanted to live long enough to see the remarkable economic opportunity that started in 1980 start again and those that continue to offer opportunity.  This powerful profit wave has begun. I made it and am glad you did too.  Even more I look forward to the next 17 years and sharing how to have more than enough money for the rest of your life.

Gary

 

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.

15-year-economic-cycle-chart

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.

morgan-stanley-graph

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.

Gary

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.

 

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Sustainable Investments Sweat the Small Stuff


Sustainable investments are not small stuff  but… small stuff may create the best sustainable investments in this new era.

Jyske seminars are really informative.  I especially enjoy them… getting to speak, getting to hear the other speakers and then getting to spend extra time with many of these speakers.

This year’s Jyske seminar in Copenhagen had an added benefit (for me) because two speakers had quite differing views on America and the importance of innovation.

gary-scott-photo-jyske-seminar

Gary Scott speaking with David Darst.

The first speaker was David Darst. David Darst is managing director and chief investment strategist at Morgan Stanley Smith Barney with responsibility for asset allocation and investment strategy.   He was the founding president of the Morgan Stanley Investment Group after he joined Morgan Stanley 14 years ago from Goldman Sachs where he held senior management posts within the Equities Division and earlier, for six years as resident manager of their private bank in Zurich.  He  earned his MBA from Harvard Business School and was awarded a BA degree in Economics from Yale University.  He has lectured extensively at Wharton, Columbia, INSEAD and New York University business schools.  For nine years he served as a visiting faculty member at Yale College, Yale School of Management and Harvard Business School.

Wow… what a resume.

David is an incredibly powerful speaker and a key point in his speech was that the power of American innovation could create a huge positive economic recovery and offered excellent investing opportunity.

The other speaker, Jeff Rubin, had a differing view.   Jeff stated that the US was in a secular decline (the definition is Declining consumer prices – Declining real estate prices – Declining stock market values) and that American innovation will not create a recovery.

jyske-seminar

Jeff Rubin and speakers at Jyske Copenhagen Global Wealth seminar.

Jeff Rubin has credentials as well.  He has been has been one of North America’s top-ranked Canadian economists in oil markets for more than a decade. He is best known for his work on global energy markets and is recognized for good calls on oil prices and their economic impacts.  He was chief economist at the large Canadian CIBC World Markets and authored the book “Why Your World Is About To Get A Whole Lot Smaller.”

See other Jyske speakers,  Gary Scott… Steve Forbes and Ken Rogoff on… Jyske TV.

gary-scott-photo

The Small Stuff can be huge!

ecuador-seminar

I wore a light colored suit and removed my tie when I spoke at Jyske’s seminar because I wanted to be the guy with the white hat!  If we abolished neckties we could probably turn air conditioning up a degree or two everywhere, the energy savings would be huge!

gary-scott-photo

Everyone else… as a banker or economic analyst had to be dressed in dark or black.  We writers get certain liberties and my message was as upbeat as can be…  “There are few times as ripe with opportunity now”.

A double dip will only increase opportunity!

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 a 15 year bull…. then a 15 year bear (a period of no growth) and the moves back t start a 15 year bull.   These stock market bull and bear cycles are based on cycles of human interaction, war, technology and productivity.

These cycles are intricately connected with the new waves of productivity that grow from the great human platform of combat. The cycle goes like this.

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.

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

Each boom leads to excess.

Each excess led to a correction.  The correction creates an economic downturn.

The economic downturn enhances a war or threat of war.

Here we are… in the correction again… 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 2012. Everything will seem bleakest… darkest…blackest and this will be the best time of all to invest… hence my light suit!

One of David Darst’s graphs showed these cycles.

morgan-stanley-graph

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… like removing ties… or even smaller… really tiny… itty bitty.  Yet the opportunity they create will be huge.

For example look at the war on oil based energy in a September 2010 article by Peter Pachal at Device.com entitled “Scientists discover tiny solar panels that create themselves”.

innovation

The article says: File this one under “holy crap,” but scientists at MIT have discovered molecules that spontaneously assemble themselves into a pattern that can turn light into electricity — essentially a self-creating solar panel. In a petri dish.

The researchers set out to create a synthetic process that imitates photosynthesis. Certain molecules respond to light by releasing electrons; the trick was discovering a substance that sticks them together in a consistent structure. Phospholipids do just that, and they also attach themselves to carbon nanotubes, which conduct electricity. With the nanotubes holding the phospholipids in a uniform alignment, the photoreactive molecules are all exposed to light at once, and the tube acts as a wire that then collects the resulting electrical current. The most interesting part is that the tiny solar array can be disassembled and reassembled just by adding chemicals. Spray on an additive and the molecular components break apart into a soup; remove it with a membrane, and the system spontaneously puts itself together.

Tiny nano particles in a petri dish that could change our entire world.

How about a war on bacteria. Here the answer may be in the small stuff as well.

A September 2010 National Geographic article by Christine Dell’Amore entitled “Cockroach Brains May Hold New Antibiotics?” says:  Insects naturally kill deadly MRSA and E. coli bacteria, experiment shows.

national-geographic-illustration

A Global economic savior? An American cockroach, as seen in an artist’s rendering. Illustration by Paul M. Breeden, National Geographic

Cockroaches may make your skin crawl, but the insects—or, to be exact, their brains—could one day save your life. That’s because the central nervous systems of American cockroaches produce natural antibiotics that can kill off bacteria often deadly to humans, such as methicillin-resistant Staphylococcus aureus (MRSA) and toxic strains of Escherichia coli, scientists said this week.  Two species of locust tested so far also have the same bacteria-killing molecules in their tiny heads. The findings suggest that the insect world—which makes up 80 percent of all animals on Earth—may be teeming with new antibiotics, said study co-author Simon Lee of the University of Nottingham in the U.K.

Such a discovery is crucial, because scientists are scrambling to combat strains of several infectious diseases, including MRSA and E. coli, that are resistant to traditional antibiotics, Lee said.
The scientists found the bugs had antibiotics only in their brain tissue, the most essential part of the body, he added.  A bug might live with an infected leg, for instance, but a brain infection would almost certainly be fatal. Insect-brain drugs for humans are still years away, Lee said, but there’s one hopeful glimmer: When the team added the insect antibiotics to human cells in the lab, there were no toxic effects.

On the subject of bugs, National Geographic also pointed out some small  stuff  that could be huge. In this case the war on hunger could create a huge quantum economic shift and the technology for innovation is already available.

According to the September 9th, 2010 National Geographic, the UN’s Food & Agriculture Organization (FAO) is working on a policy to promote insects as food worldwide. The article says: Beetles, crickets and many other types are very nutritious. A serving of small grasshoppers has almost the same protein as ground beef. Also, insects can be farmed more cheaply and on much less land. At least a 1,000 species are already part of the human diet. Mexicans liquefy stinkbugs for sauces, Thais deep-fry giant water bugs.

For example, 100 grams of giant water bugs yields 62 calories, 19.8 grams of protein, plus phosphorus, iron, calcium and carbohydrates.

There you have three potential wars… and small stuff that could change the world… in positive and explosively profitable ways.   I have to agree with David Darst in this case. The USA has a huge innovative streak. this is the one nation where failure can be viewed with respect.

Which war… or combinations of wars will change the world? I do not know… yet.  Which small solutions will be huge? I do not know that either.  Which companies will be the winning suppliers of the solutions? That is also still beyond me.

What I do believe is that taking the positive approach is the only one that makes sense…. so watch the problems… the wars and the solutions.  This is where the next huge fortunes will be.

Gary

How We Can Serve You

How to Have Real Safety

Regain Real Security

There is a path to true security.

I was reminded of this once when I made a horrible mistake.  Almost!

The supposed error?  Letting my mind wander six decades back to an hour I spent with a girl.

Learn from this near disaster, seven most powerful sources of wealth, health, security and fulfillment in this era.

The girl was pretty and blond.  Terry was her name. My imagination spanned decades returning to my Oregon roots seeing her as if she were there.

We were 11 or 12 and had known each other since we started Rockwood grade school.  Just buddies, our non-romantic friendship lasted 12 years, from first grade till high school’s end.  Then she went off to Pepperdine College in California.  I started traveling the world.  Never saw her again.  I hope her life has gone well.  But until that reflection I’d never thought much of Terry in so many years.

What could have been the tragic error was letting that memory touch my heart.  Two kids, walking on a crisp, Pacific Northwest autumnal afternoon.

We walked down a sun filled, pine needle covered, dirt path.  Huge, fat, green Douglas firs lined the road.  Traffic was no problem, not many cars.  Crossing Stark Street we turned left, hiking three blocks to 182nd.  There we passed an old clapboard candy store.  I can still hear the wooden sidewalk of that store slap beneath my feet, felt the soggy planks sag and smelled astringent pitch from the fir trees.  Then we turned right, up 182nd for about a mile.  There was Terry’s house.

I carried on, walking through a big field, waist high grass turned straw brown by an early frost.  There were dozens of paths made by who knows what.  Animals perhaps or countless generations of other kids walking home alone from school.  I chose one following it to another wood of tall, rough-barked fir.  Crossing one more field, I climbed a rock wall, struggled through a barbed wire fence (my Mom hated that fence ripping my jeans).  I was home!

Sweet simplicity, that dream.  Two kids holding hands, walking on a dirt trail under a crisp, but blue, sunny sky.  Pure innocence.

My tragic error was looking back.  I returned to Rockwood, Oregon with Merri and my kids to show them this part of their roots.  Following the route, Terry and I had walked were the candy store, grange hall, old wooden buildings and their home spun honesty and charm.

Instead we found six lanes of fast, frantic traffic and road rage.  McDonalds, KFC, strip shopping centers.  The car radio blared warnings of local gangs and drive-by-shootings. Beauty, innocence, sweet simplicity, replaced by drive ins and drive bys.  Gangs and drive-by shootings replacing a tender walk in the sun.  Good bye memories, good bye.

How can our kids walk in places like this?  How can we return to those old feeling of security and comfort?

How can any of us possibly keep pace in this world that’s moving so fast?  Then something inside snapped. “There has to be an answer for honest, hard working folks to enjoy the wonderful opportunities of today and regain what we’ve lost over the past forty years”, I swore to myself.

How can we keep up, without having such a fast paced life we turn into machines?  Where do we find time for God, family, charity, and our friends?  How can we rediscover those sun filled, pine needle covered, dirt paths we want to walk?

“There has to be places that are still innocent and pure”, I thought.  “There has to be a way of life that does not pound us with stress”.

This thinking led me to begin reviewing the thousands of economic and business experiences I have shared with readers over the decades.  This started a search for a simpler way of life and a better place to earn and protect our wealth.

By digging, asking and observing, traveling and talking to investors and investment managers all over the world I found that there are true paths to real security in the here and now.  That knowledge helped me develop courses on how to have natural health, everlasting wealth and purposeful investments.

This knowledge helped Merri and me invest in stocks and real estate all over the world.  It helped us find and develop Merrily Farms into a sanctuary here on Little Horse Creek.

That almost error led us to create an entire portfolio of information on how to keep pace, get ahead, enjoy our modern society but, to enjoy life wherever you choose without having to move too fast.

I want to share this information with a special few in our summer course in the Blue Ridge Mountains where the air is dry, crisp, with a bright sparkling sun.  Our North Carolina woods is a place where we can once again walk down sun filled, pine needle covered, dirt paths beneath huge, fat, green fir and hemlock.

We start the course with this question that can help us get our lives back.

“What would you think in the last 30 seconds of your life if you were the richest man in the world but were unhappy?”

This quote is from the opening slide of our Value Investing Seminar, “How to Secure Your Future With a Value Breakout Plan”.  This a vital question because few investors think about the value of comfort and happiness.  Yet the truth is, those who are comfortable and happy with their investments are likely to make good investment decisions.  If not, no matter how much money an investors has, changes are, they’ll lose.

Bring Value and Purposeful Investing Together

value

Join us to learn how to make safety and profit easier and less time consuming so we can focus on our individual purposes in life.

Become an International Club member and join like-minded souls, who take a positive view and think outside the box for better health, greater income and safer, more profitable investments. Share ideas on how to add value to everything and make 2016 -2017 your best years yet.

In 2016 Merri’s, David’s and my mission is to share our 50 years of experience in international business, investing and living to make ourselves happier, healthier and wealthier.

To reach a wider audience we have shifted our seminars online including the seminar “How to Secure Your Future With a Value Breakout Plan”.

Here is a partial syllabus of this seminar.

  • Three common sense ideas:   Avoid lines.  Go where you are a name not a number.  Decide who you are and what matters to you.
  • Why three economic trends that have make smart investors rich every 30 years are ready for cashing in now.
  • How to look for short term problems that create long term value.
  • Update on the best ten markets for safety and profit.
  • How to diversify in value with Country ETFs.
  • The value of time in investing and life.
  • The economics in cyber wars. How to look back at the economics of war to see ahead.
  • Great new innovations that will ignite a 16 year bull market from 2016 to 2032.
  • The next great fuel.
  • Timing long cycles, economic cycles and seasonality.
  • Investing in Demographics.
  • Trading Down, the biggest global trend ahead.
  • Hidden Inflation .
  • How to protect against pension loss.
  • The Silver Dip 2016. When and how to invest in gold and silver . How to double your position with loans.
  • How to spot currency distortions and borrow low to deposit high.
  • How, Why When & Where to bank abroad.

Club membership is for an entire year and the recorded seminar is just one high point.

In 2016 and 2017 we are conducting online seminars about value investing, natural health and how to write to sell.

International Club members receive all the online seminars free.

In addition club membership includes:

  • Personal investing Course (Pi), normally $297, FREE
  • Self Fulfilled How to be a Self Publisher, normally $299, FREE
  • Eventful Business, normally $349, FREE
  • International Business Made EZ, normally $299, FREE
  • Report “Three Economic Conditions for 50% or More Profit,” normally $29.95, FREE
  • Report “Silver Dip 2015” normally $27, FREE
  • Three online Value Investing Seminars, normally $477, FREE
  • One online Natural Health Seminar, normally $119, FREE
  • One online Writers Camp, normally $299, FREE

Annual International Club (one year) Membership  $1,199

Annual International Club (one year) Membership four quarterly $375 payments

Merri and I have been organizing courses, seminars and newsletters about international and Super Thinking  lifestyles for over 30 years.  The importance of this sharing… by like minded souls… was reinforced when a delegate from a course sent an email that said:

My Dearest Merri and Gary, Thank you for your most gracious hospitality last weekend. I am just thrilled at being a part of your group.  You and Gary were exactly as I imagined you to be, warm friendly, kind, considerate, genuine, helpful, fun, sincere, what else can I say……I felt so comfortable in your presence and learned so much in your course. I was sad to leave the farm that Sunday afternoon.  You made us all feel so welcome and cared about.  You were so kind to make arrangements for a ride with the other delegates from the Charlotte Airport.  They were so nice to me and so helpful, by the time the weekend was over I felt like they were my long lost brothers. Monday morning we all had breakfast at the airport together and I was so sad to see them go, I was sad the weekend was over, perhaps sad is not the right word for how I was feeling perhaps Gratitude is a better way to describe it.  Grateful for having the opportunity to share the weekend with such wonderful, like minded Human Beings, in the beautiful mountains of North Carolina. Thank you Merri and Gary.  Thanks to you I now have new hope and a new direction to move forward in my life.   I know by attending your classes and conferences that through education and due diligence I will make the right choices.

I invite you to be a member of the International Club.

Let’s prosper in these times of change. Won’t you join us in this exciting club and share Merri’s and my lifestyle for the next year?  Join us online.

Club members receive everything we offer in 2016 and 2017.

Annual International Club (one year) Membership  $1,199

Annual International Club (one year) Membership four quarterly $375 payments

Gary

See more on David Darst’s book The Art of Asset Allocation: Principles and Investment Strategies for Any Market, Second Edition

See more about Jeff Rubin’s book

Read Scientists discover tiny solar panels that create themselves

Cockroach Brains May Hold New Antibiotics?

For Most People, Eating Bugs Is Only Natural

Ecuador & International Banking Update


Here is an important Ecuador & international banking update created by the wonderful world of mobility in which we live.

Our global mobility provides huge benefits… broadens our horizons and enriches mankind through global trade.   Yet being global also creates some problems… one of them is banking.

This site recently posted a message about Ecuador banks that began with, “I do not trust Ecuador Banks.”

This is not a slight on Ecuador.  This statement is a comment on the realities of trying to maintain control of one’s own wealth in an era where almost all governments are increasing control over money.

The banking article was followed by  another article stressing  the importance of diversification in Ecuador Diversified.

Here is a reminder of the importance of this information.  A couple of years ago I purchased a block of buildings in Ecuador planning to resell them.  I am according to plan selling them now and recently received a payment.

My attorney wrote this to me:

They deposited funds in my account last Wednesday to pay for the condo and asked me to send to you.  There is a 2% tax on money going out of Ecuador which was recently established, plus bank commissions.  I will wait for your instructions  to wire these funds to you.

There previously was a 1% tax but it has now been increased to two percent. This increase is not a big deal but a step in the wrong direction and a reminder that we should never trust any one country, currency or banking system.

I just sent our Ecuador Living subscribers an alert about one more Ecuador banking problem.  Ecuador Living subscribers click here.

Learn how to subscribe to Ecuador Living here.

Hence my mantra to have what I call a “Six Point Command Posture” which is to:

Live in one country
Bank in a second country
Invest in many countries
Earn in two or more countries
Use a company incorporated in a fifth country
Take a second residence

Where to Bank

Knowing where to bank is a growing problem… especially for Americans.  Non Americans should read this article any as you’ll see that you are not exempt from this problem either.

Americans are being crushed between a rock and a hard spot.

The Rock. Many US banks will no longer accept Americans residing overseas because they have a foreign address. This has been caused by the US Patriot Act.  Banks have to know their clients so they refuse to accept (or keep) clients with overseas addresses, even Americans who have banked with them for decades, but change their address.  The following banks have been sited as closing accounts with just 30 days notice of long term customers just because they took on a US address: Ameriprise, Bank of America; Bank of New Hampshire; Citibank; Citizens Bank; Edward Jones, St. Louis; E- Trade; Fidelity Investments; INGDirect; JPMorganChase; Morgan Stanley; National City Bank in Riverview, Michigan; Provident Bank, Maryland; Smith Barney; T. Rowe Price; USAA Federal Saving Bank; Vanguard mutual fund; Wachovia; Washington Mutual; Washington Mutual Investment, Spokane; WellsFargo; Zions Direct.

The Hard Spot. At the same time the IRS has created a set of regulations that discourage non US banks from accepting Americans.

Many Swiss and British based banks will no longer accept Americans.

Here’s an excerpt from a 13, June 2009 Telegraph article entitled “Lloyds Bank hit by Obama tax purge” by By Louise Armitstead:   Banking group drops American customers in UK ahead of costly proposals to stamp out tax evasion  Lloyds Banking Group is ditching American customers based in Britain pending a crackdown on international tax evasion planned by President Barack Obama.

This week American private client account-holders at Lloyds’s received letters informing them of an “important change in policy regarding clients who are resident, domiciled or linked to the United States by property or asset holdings”. They were told the bank had “no choice” but to “cease acting as your investment manager.”

One letter sent to Bank of Scotland’s portfolio management division, which is now part of Lloyds, said: “The USA has a mature regulatory environment governed by its Securities and Exchange Commission. These regulations mean that we are not licensed to manage portfolios for US clients.”

The letter added: “Unfortunately we cannot offer an equivalent service from within Lloyds Banking Group.” Clients have been advised to transfer their assets.

One recipient, who has lived in the UK for over 25 years, said: “After all this time, I’ve suddenly been told I must take my money elsewhere and I don’t understand why. Now I’m scared that other banks won’t take me on either.”

The Brits are no the only group shedding US account holders.

A July 12, 2009 USA Today article entitled “Some foreign banks drop U.S. clients because of UBS flap”  by Kevin McCoy explains how other banks have booted Americans as well.  An excerpt says: The closely watched Justice Department court fight to get the names of 52,000 suspected American tax evaders from Swiss banking giant UBS has prompted some other foreign banks to drop U.S. clients they once welcomed, tax experts said Monday.

Eager to avoid a similar struggle with federal prosecutors, banks including Credit Suisse and HSBC in recent weeks have notified American clients they must close their offshore accounts or transfer them to the institutions’ U.S.-based operations, where tax reporting requirements are far stricter.

“Overall, the international banking community, and particularly the offshore banking community, has been very friendly to American account holders,” said William Sharp, a tax law specialist at the Sharp Kemm law firm in Tampa. “That changed in the past couple of months as a result of the UBS case.”

The Dutch were early in dropping American clients.

ABN AMRO, a huge, Dutch based, international bank gave all clients  with U.S. passports within 30 days notice in 2008 and then closed their accounts because of the  high costs to comply with U.S. regulations.

Expect this problem to get worse! Beginning in 2010 stronger US reporting rules will force even more overseas banks to stop accepting Americans.  They simply cannot afford to fill all the obligations.

Americans should not feel totally alone…nor should non US investors feel totally safe from being shut out of a banking center.

According to the British Times Newspaper, Barclays Bank used the US anti-terror laws to shut down the personal bank accounts of British citizens who were working for Iranian owned businesses.

The bank enforced anti-Iran sanctions under the US Patriot Act.  Accounts of Iranian owned companies that operated completely legally in Britain were shut.  But Barclays went much further. They amazingly shut down accounts of directors of these companies and even more amazing they shut the personal accounts of ordinary staff members, including clerical officers, computer engineers and bank tellers, just because they worked for an Iranian owned company.

Here is an excerpt from a June June 6, 2008 Times of London article entitled, “Barclays bank rejects customers to comply with US terror law:”  Barclays began the account closures in February, shortly after reports from industry sources that US Treasury agents had been touring the City of London putting pressure on financial institutions to withdraw from any form of business that might have Iranian links.

One source told The Times that City banks had been warned that they would lose access to the US market if they continued to deal with Iranian businesses. Barclays has extensive business interests in the United States.

Case study: Cast out in the supermarket

Chris was doing the shopping in Tesco when Barclays rang to tell him that his bank account was being closed. Later that evening his wife was told that her Barclays account, which she had held for 25 years, was also being closed.

Chris, 46, works in IT for Bank Saderat, and his wife is in the accounts department of Melli Bank. Both institutions are Iranian-owned. “They said it was because of sanctions but I knew there were no British sanctions on the banks. I asked them if they were responding to US laws and they said they didn’t have to give me a reason,” he said.

The couple opened new accounts with one of Barclays’ rivals but they had difficulty transferring standing orders, especially Chris’s child-support payments. He said: “I know that UK banks are being pressured by America to stop all dealings with Iran but what impact will it have to shut an English bloke’s account with an English bank? The Iranians won’t give a monkey’s. What upsets me is the lack of respect Barclays have for their customers.”

This last comment hit me strongly… the lack of respect many of the big banks have for their clients.

This is one reason I have enjoyed banking with Jyske Bank in Denmark for more than 20 years.  Jyske is big and well managed enough to be very safe, but small enough to provide genuine care and attention to the individual.

This is why I was not surprised that a number of years ago, Jyske made the decision to spend a lot of time, energy and money to comply with US law so they could continue to serve US as well as non US investors around the world.

This shift though has created some confusion. For example a Reader from the Netherlands sent me this note:  Hello Gary, Since beginning of this year we are subscribed to your newsletter. In your articles we read that it is possible to go to Jyske Bank and start doing multi-currency for about 30,000 dollars. We were very enthusiastic about this philosophy and asked the Jyske Bank for information. However we were very surprised when we got information back including the message that we have to start with $150,000 euro. Can you help us and maybe clarify the misunderstanding about this starting amount?  Thank you very much in advance!

The services and minimums required by Jyske Bank Private Bank (JBPB) for non US investors differs from those offered by Jyske Global Asset Management (JGAM) who serves US investors.

Jyske Global Asset Management (JGAM) offers Americans managed accounts, advisory accounts and IRA services to US clients.

JGAM’s managed accounts provide Americans with access to international investments in all currencies, traded on all stock exchanges.

There are two levels of managed accounts for US investors:

Mutual Fund Managed Accounts, $50,000 to $200,000.  Accounts from $50-200,000 are mainly  invested in mutual funds and ETF`s in order to get the appropriate diversification.

Individual Investment Managed Accounts from $200,000 up are mainly invested in individual securities as trading costs are not prohibitive for this size of account.

There are two forms of advisory accounts for US investors.

Advisory Accounts for US Residents.  Accounts for US residents are available and provide access to investments in currencies, commodities and US listed securities.

Advisory Accounts for Americans who are resident outside the US.   US citizens who are resident outside the US (proof of residence is required) have access to investments in currencies, commodities and all international investments in all currencies, traded on all stock exchanges.

The minimum required to start an advisory account is $25,000.

Because the minimum annual fee is  $1,000 JGAM recommends an initial deposit of minimum $50,000.

IRA accounts are managed accounts with more conservative investments than those in a normal  managed account.  IRA accounts require a minimum investment of $50,000.

Jyske Bank Private Bank offers the following services to non US investors.

Non US Clients can open accounts with minimum deposit of Euro 150,000 (approximately 220,000 USD), or equivalent in another currency.

JBPB works with six profiles:

Income profile. A low-risk profile, invested in currency accounts (cash) and/or traditional bonds.

Stable profile. A low-risk profile, invested in bonds (incl. high- yielding bonds), a small equity part.

Balanced profile. A medium-risk profile, invested in equities and bonds (main emphasis on bonds).

Dynamic profile. A medium-risk profile, invested in equities and bonds (main emphasis on equities).

Growth profile. A high-risk profile, invested mainly in equities and a lesser share in bonds.

Aggressive profile. A high-risk profile, invested almost exclusively in equities.

There are six managed strategy funds (available only in Euro) for investors who want managed services with minimum deposits of US$ 220,000. These six funds are based on the principles of asset allocation and match the investment profiles above so all investors can attain risk diversification, risk management with even a limited investment.

There is a full Discretionary Portfolio Management service for investors who want managed services with US$ 350,000 and above. This service is also based on the six strategies above. Jyske Bank will invest and manage the clients portfolio in close cooperation with the Bank´s experts and their network of international partners. These strategies are offered in EUR, USD, GBP, DKK and SEK.

Investors, who do not want managed services, and have accounts of US$ 220,000 or more, can wish to engage in an active dialogue with their advisers and be very involved in the decision-making process. based on the client’s investment profile. They can invest in currency accounts in a large number of currencies, all tradeable equities and bonds, mutual funds and commodities.

Here is one huge feature I like very much about both JBPB and JGAM…  No Jyske employees in  management, advisory services or any employee receives any kind of bonus pay. This eliminates any temptation for hidden agendas to exist.  Employees have no incentive give any advice or take any action that is not in the client’s best interest.

Technology has given great mobility to our wealth. This mobility is good for the individual and the global economy… but governments do not like this as they wish to control our finances.  The tension created by this struggle between the individual and the collective has created a never ending thrust and counter thrust of regulations and adaptions to these rules.  It is harder to maintain a diversified global portfolio than it used to be… but the effort is still worthwhile.

Gary

The greatest asset of all is the ability to earn wherever you live, which brings everlasting wealth.

This is why we offer our course Tangled Web… How to Have an Internet Business.

A clear mind and healthy body are also a vital assets… plus a second language is a powerful diversification tool.

This is why I am giving everyone who enrolls in our North Carolina or Ecuador International Business & Investing seminar in October or November our “Tangled Web… How to Have an Internet Business Course” (offered at $299) free.

Here are comments from a reader about the way we help:  Thank you for your inspiration and information outlining foreign banking and retirement.  Your comments and suggestions are welcome for planning the steps to evaluate the early stages of living abroad.

Sept. 17-21 Ecuador Super Thinking + Spanish Course

Sept. 23-24 Imbabura Real Estate Tour

Sept. 25-28 Ecuador Coastal Real Estate Tour

Join us with Jyske. Learn more about global investing, how to have an international business and diversification in Ecuador at the seminar.

Oct. 9-11 IBEZ North Carolina with our webmaster  David Cross & Thomas Fischer of JGAM

October 16-18 Ecuador Southern coastal tour (early sign up before Sept. 1, $499 per person).

Oct. 21-24 Ecuador Import Export Tour

Oct. 25-26 Imbabura Real Estate Tour

Nov. 6-8 IBEZ Ecuador Seminar

Nov. 9-10 Imbabura Real Estate Tour

Nov. 11-14 Ecuador Coastal Real Estate Tour

Attend any two Ecuador seminar or tours in a calendar month…$949 for one.  $1,349 for two.

Attend any three Ecuador courses or tours in a calendar month…$1,199 for one.  $1,799

Read the full articles:

Lloyds Bank hit by Obama tax purge

Some foreign banks drop U.S. clients because of UBS flap

Barclays bank rejects customers to comply with US terror law

International Investing Trick


Here is a global diversification trick that may do well in the likely global economic scenario ahead. Buy good value shares internationally as markets dive during the summer dip.

In a moment we’ll look at some Ecuador health ideas… first the investing trick.

Global equity markets have been in a bear market rally for six months but are now hitting the summer blues due to seasonality.

Share prices will probably drop now. Chances are there will be a strong global equity slump at least through October 2009.

This will create extra value in equity markets and provide good opportunity to pick up high value long term.

The bear market is likely to carry on until 2012-13, but good value shares acquired during dips are more likely to spike early and have extra potential after the bear ends.

Now through October 2009 could be a good time to invest in high value shares for long term appreciation.

But which shares… in which markets?

One way to approach this is to look for extra value created by inefficiencies in markets…to find markets where the values are best.

Statistically this is the best way to be absolutely sure of the best long term returns.

There are numerous investment managers who use very strict valuation criteria (usually based on dividend yields, cash flow, price earnings) to spot the best value markets.  They then try to apply similar criteria to select good value shares in the good value market.

The next goal is to decide how much should be weighted in major market and how much in emerging markets.

Here is a comparison of the Morgan Stanley Major Market versus Emerging Market indices.

The MSCI World Index is a market capitalization weighted index that measures the equity market performance of developed markets.  It includes 23 developed market country indices : Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States.

The MSCI Emerging Market Index includes Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey.

MSCI Indices performances.  Total per annum return over:

Major                            Emerging
15 years    4.10%                   5.41%
10 years  -3.85%                   9.11%
5 years    -2.77%                  11.16%
3 years   -10.81%              -00.17%
1 year      -20.81%             -27.53%
3 mos.      14.30%               27.53%

Regardless of the time frame observed,  the emerging equities almost always seriously outperformed major markets… but as a class they also dropped further in the 2008 downturn.

Here is a year-on-year comparison for the past five years.

Major                   Emerging
2003  10.74%           29.63%
2004    6.46%           16.51%
2005   26.17%           54.41%

2006     7.40%          18.23%

2007     -1.66%         25.71%
2008   -50.30%      -37.64%
2009      5.39%         34.79%  3 months

This history suggests that emerging markets deserve a substantial ranking.

However before becoming too aggressive in over weighting emerging markets, we have to keep in mind two thoughts.

First economic thought. The last 15 years has been a catch-up era when the investing world caught on to the idea that emerging markets offered great opportunity.

Second economic thought. A great deal of emerging growth came from debt financed exports to the developed world. This leaves emerging economies holding huge amounts of debt for customers who may not be able to repay the debt nor continue to buy the same volume of goods as before.

The easiest way for investors to invest in good value during dips is via a value mutual fund.

You can select a value major market fund, a value emerging market fund or a value diversified fund.

The benefit of a value diversified fund is that the professional manager decides how much to weight in emerging and major markets.

For example I just sent a lesson to our multi currency subscribers that showed a US traded international diversified value fund that has risen 36.08% in the past quarter ending June 30, 2009.  This fund is 86% in major markets and 14% in emerging markets.

Learn how to read about this fund as a multi currency subscriber.

The most valuable asset we can have in tough economic times is good health. This is why we studied Ecuador health ideas at our June tour.

Cotacachi is considered sacred by the shamans… a place of wonderful mountains that ring the valley.  This is Mt. Cotacachi to the west.

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Mt. Imbabura to the east.

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The valley is surrounded by mountains like these twin peaks…

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creating wonderful, mystic  sunrises.

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The first afternoon of the tour we visited La Mirage Spa and the Shamana Estella.

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She began a theme that the many shamans we visited confirmed.   She said that the three keys to better health, increased longevity, more energy and fulfillment are good nutrition, proper exercise and good sleep.

The purpose of the Ecuador shamanic tour is to learn ways to unlock this healthy  combination in a natural low cost way!

The second day we joined Clemencia, the Shamana of Zuleta and drove 15 minutes from our hotel Meson de las Flores to Otavalo market where we visited the local food market…

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filled with fruits…

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vegetables…

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flowers and …

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herbs.

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Here is the shamana speaking to the group with Merri and Mauricio translating.

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We learned the importance of the herbs to make good teas that hydrate the body are cedron, chamomile and lemon verbena.

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We learned how other herbs relax such as chamomile and valerian root. Plus we were told to boil lettuce in milk as a prebedtime drink for better sleep.

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On the other hand, tea from cinnamon, paprika, cloves and ginger help reduce sluggishness in digestion and to speed the system when we need to be fired up.

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You can read this entire report as an Ecuador Living subscriber.

Gary

We hope you’ll join us and enjoy Ecuador’s or North Carolina’s beauty soon.

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Sunrise from Meson de las Flores.

July 24-26 IBEZ North Carolina

Oct. 9-11 IBEZ North Carolina

Or join us in Ecuador and learn more about living and retiring in Ecuador.

Sept. 17-21 Ecuador Spanish Course
Sept. 23-24 Imbabura Real Estate Tour
Sept. 25-28 Ecuador Coastal Real Estate Tour

Oct. 21-24 Ecuador Import Export Tour

Nov. 6-8 IBEZ Ecuador
Nov. 9-10 Imbabura Real Estate Tour
Nov. 11-14 Ecuador Coastal Real Estate Tour

Attend any two Ecuador courses or tours in a calendar month…$949 for one.  $1,349 for two.

Attend any three Ecuador courses or tours in a calendar month…$1,199 for one.  $1,799 for two.

Ecuador & Banking


When living in Cotacachi, Merri and I do not use Ecuador banking. See below why banking globally is better.

ecuador-banking

This Cotacachi plaza has one of the village’s two Cathedrals and…

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a bank with an ATM… plus

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a new credit institution with an ATM as well.

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This works just fine for us.

This is an even better idea now that the Ecuador government has created a new wealth reporting regulation. See yesterdays article on Ecuador’s new financial reporting law if you missed this.

For wealth protection we bank mainly with Jyske Global Asset Management… who look after our investments in Denmark, but comply with US regulations.

I have banked abroad for 40 years and this has become increasingly difficult… though there are still ways.

In fact I co hosted Jyske Global Asset Mangement’s (JGAM) first US seminar  last month in Naples, Florida. Here I am with Thomas Fischer of  JGAM. While other banks are dumping Americans, Jyske is working harder to enhance its global service for US investors.

bank-privacy

Since I wrote my first book, Passport to International Profit in the 1970s, my mantra has been to have what I call a “Six Point Command Posture” which is to:

Live in one country
Bank in a second country
Invest in many countries
Earn in two or more countries
Use a company incorporated in a fifth country
Take a second residence

bank-privacy

The seven speaker panel answered questions at the JGAM – Gary Scott seminar.

Since Merri and I reside most of the time in the US and Ecuador, we do as little banking in these countries as possible.

There are some good reasons to have the “Six Point Command Posture”.   You can see why below.  The “Six Point Command Posture” is worthwhile even though recent events remind us that this posture is regretfully more difficult to attain than before.

The British Telegraph newspaper published a recent article entitled Lloyds Bank hit by Obama tax purge.  Excerpts (a link to the entire article is at the end of this message) say:  Banking group drops American customers in UK ahead of costly proposals to stamp out tax evasion.

Lloyds Banking Group is ditching American customers based in Britain pending a crackdown on international tax evasion planned by President Barack Obama.

This week American private client account-holders at Lloyds’s received letters informing them of an “important change in policy regarding clients who are resident, domiciled or linked to the United States by property or asset holdings”. They were told the bank had “no choice” but to “cease acting as your investment manager.”

One recipient, who has lived in the UK for over 25 years, said: “After all this time, I’ve suddenly been told I must take my money elsewhere and I don’t understand why. Now I’m scared that other banks won’t take me on either.”

The proposals, which were unveiled in the President’s first budget, have been designed to clamp down on American tax evaders abroad. But bank bosses say that in practice they could be asked to take on the task of collecting American taxes at a cost and legal liability that make servicing the clients inexpedient. The rules have not yet been finalised and are still subject to debate in Congress.

The letters also contained four comprehensive descriptions of the bank’s definition of clients that are affected. These included clients that hold green cards, pay American taxes, are American domiciled or even those where there is “any indication” that a client spent more time in the US than “normal holidays currently or in the past or future.”

There has been a continual erosion of the liberty that US investors  enjoy when banking abroad.

First, the Swiss Banks started limiting what US resident investors could invest in  (in the 1970s). Then the Swiss started dropping US resident investors all together.  Many Canadian financial institutions stopped accepting US resident investors  years ago.

Now the British banks have jumped in and as the article shows… it is not just US residents.  Even US citizens who have lived in England for 25 years are losing their accounts.

Fortunately, since banking abroad is not about reducing tax,  there are still great, safe and proper ways to bank and hold assets abroad.

Merri and I use Jyske Bank and Jyske Global Asset Management because they offer an excellent global investment service that conforms to all US rules.

bank-privacy

Lars Stouge President of JGAM speaking at the Naples seminar.

See more on this in a TV interview between Thomas Fischer and me here.

Why Bank Globally?

Some investors mistakenly think that banking abroad reduces tax.  This is not correct and has not been for decades. There are numerous good tax planning ideas, but they work as well with local investments as well as overseas.

The reason to bank abroad is that we live in a global economy.  We are dependent on production from many nations every day.  Even though we do not do so directly we spend many currencies every day.   The ultimate form of financial security is a multi currency existence.

We are multi national spenders so we need to be multi national investors.  We need bankers and investment managers who have international and multi currency experience and expertise.

An excerpt from a recent multi currency question and answer session sent to my multi currency course subscribers explains why and how in more detail:

There are numerous benefits gained by using Jyske. The first benefit is Jyske’s global investing experience, 24 hour trading facilities and their low fee structure.

Jyske Bank has incredible in depth knowledge of markets and have a very broad access to global markets.  Jyske Global Asset Managers (JGAM) not only tap into Jyske Bank for data, but they also use  Morgan Stanley and Bank Credit Analysis for research.  There is rarely an investment question that I cannot get answered at Jyske.

The low fees are also a huge benefit.  I used to hold accounts at 14 banks around the world. Finally I started researching the fees I was paying and bean eliminating the accounts that charged the highest fees.

In the end I was left with Jyske and my London stock broker.  For example Jyske’s fee to buy bonds was one-sixth that was charged by my Swiss banker.

Hidden fees and shaved interest rates, especially those charged when you in exchange currencies, and buy stocks and bonds often chew an investor to pieces.

Plus Jyske has been in the banking business for over 100 years. They have enormous experience and are very conservative.  They were not hit by the sub prime mess. They had no Madoff investments.  I like this type of old fashioned stability.

Jyske is in touch with the pulse of the market. They trade 50 billion dollars of currencies and commodities a day.

Another important aspect gained at Jyske is bank safety. Denmark is ranked as one of the safest countries in the world to bank.

In addition there is great privacy and asset protection. No one that you do not inform can see your account.  Should someone sue you and gain a judgment against you, that judgment is not automatically enforceable in Denmark.   The creditor would have to start a legal action to attain the funds in Denmark and to date this has never happened at Jyske.

Q: Can you explain what type of account the multi currency transactions would be conducted?

A: There are two types of JGAM accounts… managed and advisory.

JGAM can buy any type of investment for Americans in managed accounts… because it is JGAM is making the decision… not the client.  Depending on the size of your account, you can ask Jyske to hold a specific investment in your account and if it makes sense in terms of the execution, diversification and your risk profile, they will do this… but it must be JGAM’s decision.

The managed accounts are available in four risk profiles… low risk… medium…high or speculative.  You can learn more about Jyske’s asset allocation strategy at the JGAM site linked later in this message.

Q: I have residency in Mexico there although I do not claim foreign residency for US tax purposes at this time.

A: Your residence does not matter when it comes to managed accounts.

There is a residential impact for advisory accounts.

If your main residence is outside the US (JGAM will want to see a utility bill as proof of residence), then JGAM can buy any investment without qualification.

If you have an advisory account and your main residence is in the US, then JGAM is restricted to buying qualified (US traded) investments for you.

However you still gain the asset protection and privacy benefits as these US traded assets are held in Denmark.

Q: Do you use a foreign LLC to conduct your business with Jyske Bank?  If so what country is the LLC issued from?

I do not use an LLC for our Jyske accounts. It is much easier to open an account in person.  However our account ownership is part of a plan that takes tax, asset protection and estate planning into account.  Everyone should make their decision on what type of structure and where it is organized based on their own plan that suits their own circumstances.

I highly recommend using a Strategic Asset Snapshot offered by Cox & Nici that  looks at all these variables. Joe Cox the senior partner of this firm has been my tax attorney for about 20 years.

You can get information about their Strategic Asset Snapshot Joe at jcox@coxnici.com

Learn about our Multi Currency Course and how to get this entire session here.

Having a six point command posture has become increasingly important over the  past 40 years as we have increased our involvement in the global economy.  Yet this secure method of living, investing and doing business has also become more difficult to achieve.  The result is that this posture is even more important and more worthwhile.

US investors See Jyske Global Asset Mangement’s new website here.

Non US investors contact Reny Matys at mathys@jbpb.dk

Gary

Save up to $249! Enroll in our July 24-26 International Investing and Business Made EZ seminar here

We offer two emailed courses, one on how to be a multi currency investor, the other on how to have your own international web business.

We enhance these courses with regular international investing and business seminars that I conduct in coordination with Jyske Bank and Jyske Global Asset Management.

If you enroll in our July 24 to 26 International investing and business seminar by July 1, 2009 you can have one of these tow emailed courses free and save p to $249.

Delegates gain a lot by talking with each oter at these courses. Here are delegates at our Naples course.

bank-privacy

Join me with Thomas Fischer of Jyske Global Asset Management and my webmaster David Cross in North Carolina July 24-26 IBEZ North Carolina

We’ll have a New River wine tasting at Bohemia Gallery as we did last year. here are delegates at that tasting.

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Our North Carolina courses in 2009 will be conducted in the new…

ecuador-wine and cheese

West Jefferson Hampton Inn.

Save $249!   Enroll in our July 24-26 International Investing and Business Made EZ course here

Here is what one reader wrote about our last seminar.

Hi Gary, Just a note to express our appreciation for a great event.  The Naples Beach Hotel provided a comfortable  setting for the gathering. The hotel should be congratulated for the excellent food and service. We enjoyed all of the speakers. I particularly enjoyed John Mauldin. I have followed his writings over the years.  In  1994 we attended several of your seminars, I enrolled in the Multiple Currency Course and opened an account with Jyske Bank.  This activity has provided us with a nice retirement income over the years. With economic disruptions world wide I decided to become reacquainted  with currencies as an investment tool as a consequence of  my very dark view of the USD’s future.  Keep up the good work. My day is always brightened by your daily emails.

Save $249! Enroll in our July 24-26 International Investing and Business Made EZ course here

Read the entire Telegraph article: Lloyds Bank hit by Obama tax purge at
www.telegraph.co.uk/finance/newsbysector/banksandfinance/5526129/Lloyds-Bank-hit-by-Obama-tax-purge.html

Cotacachi Mayor’s House


Recent messages looked at how Merri and I search for Cotacachi real estate.

The road paving we have been tracking is now done.

cotacachi-real-estate

In two directions…

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in less than two weeks.

We keep our eyes open every day and the search pays off.

Today, near Primavera II condos…

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Around the corner from Cotacachi’s Mayor’s house (which is for sale) …

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we spotted two old houses for sale.  This one is $25,000.

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and this, $36,000.

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These fixer uppers have huge lots, in the center of the village. They may be real sleepers.  We’ll see as we’ll inspect them on our Imbaburra real estate tour that begins tomorrow.

You can gain Cotacachi real estate information and Ecuador real estate contacts as an Ecuador Living subscriber. See details here.

Speaking of sleepers, this excerpt from today’s password protected multi currency course shows why European shares may be sleepers as well.

Here is the excerpt:

This multi currency update has three portions. First we see anther inflation indicator. Second we update our search for value. Third we end with some answers to questions from lesson one of our new updated primer course.

Recent inflationary events include the support by US authorities of Bank of America with a guarantee of liquidity and capital. B of A faces losses of up to $118 billion dollars.

The government gets shares in the bank worth $20 billion.  In other words the government stumps up about $88 billion (that it does not have).  This is inflation.

Citibank in trouble as well.

Jyske Global Asset Management wrote in its last market update three days ago:

Fears of further credit losses and rumours of another large US bank being nationalized dragged the international stock market down this week. The New Year rally last week is already forgotten, and investors are anticipating new lows in 2009.

Citigroup Inc. posted an $8.29 billion loss, only a few days after the announcement of their plans to sell the control of Smith Barney to rival Morgan Stanley.

Sales at U.S. retailers dropped in December for the sixth consecutive month (first time since 1992) and the most in three years.

S&P cut Greece’s long-term credit rating to A- with a stable outlook, due to its public and private debt and the budget deficit. The downgrade makes Greece the lowest rated country in the Euro zone.

Market participators are now speculating whether a Euro exit may become an option for some members of the Euro-bloc, analysts view Greece as the weakest economy within the Euro zone.

The European Central Bank (ECB) Thursday cut the Euro zone interest rate to the lowest level in more than 3 years.

As expected the main policy rate was cut by a half percentage point to 2%. The Danish Central bank followed the ECB with an even bigger cut of 75 basis pts to 3%.

#1: Falling interest rates are indicators for increased activity in share markets.

#2: Combine this with the fact that stock funds saw huge redemptions in 2008.

#3: Add in the next fact that international equity funds were among the most redeemed losing about a fourth of their total assets in 2008.

U.S. stock funds only had redemptions of about 10% of their assets.  Bond funds on the other hand experienced positive flows in 2008.

This increases my enthusiasm for international shares…especially in Europe.

Low interest rates plus markets that are oversold plus inflation all bode well for shares.

There are four ways to fight inflation; real estate, your own business, commodities and equities.   So depressed international equities in an atmosphere of low interest rates spells opportunity.

These three factors are the elements that create value because value investors are generally bucking the trend.

This is why last year my biggest equity position was in the Jyske Invest European Equity fund.  I picked a fund that was invested mostly in markets that Michael Keppler of Keppler Asset Mangement viewed as having the best value.

Keppler has changed some of his rankings this month so let’s review the change and see if my position still makes sense.

Let’s look at the geographical breakdown of the Jyske Invest European Equities fund I hold now.

This fund has departed quite a lot from the synchronicity it enjoyed with Keppler’s top values when I invested two years ago.  The fund’s portfolio is spread here now:

UK  24%
Germany 16%
Switzerland 13%
France 12%
Spain 7%
Netherlands 4.5%
Sweden 4%
Spain 4%
Finland 3%
Italy      2%
Greece 2%
Denmark 1.5%
Norway 1.5%
Luxembourg .5%
Ireland  0.5%
Austria 0.5%

The fund’s managers report says:

There are prospects of uncertainty in 2009. The world economy is struggling
and the optimism has turned into pessimism. Central banks and  governments have been busy introducing rescue packages and  interest-rate cuts. The help has been offered, but is it sufficient and when will it begin to show an effect? We
expect that 2009 will bring wide swings in the equity market. A lasting upturn is not likely to be just around  the corner. We are still looking at a longer period characterised by uncertainty before the optimists outnumber the pessimists.

For the fund we prefer cheap shares with prospects of earnings growth. That type of shares has historically yielded the best returns.

Though this fund no longer has the same value synchronicity with Keppler that it previously had, I’ll continue to hold this as I plan to increase my equity position. I can balance this fund’s holdings to better match Keppler’s rankings by adding Hong Kong, Singapore, Italian and other funds or ETFs.

You can learn more about Keppler’s market updates and the ETFs we use in our multi currency portfolio as a multi currency susbcriber.

Until next update, good global investing

Gary

Join Merri, me and Peter Laub of Jyske Global Asset Management at OUR INTERNATIONAL INVESTING & BUSINESS COURSE IN ECUADOR. We review economic conditions, Ecuador real estate, my entire portfolio plus investing and business ideas for the months ahead.

Gary

Your own business is a  good way to secure purchasing power. This is why Merri, our webmaster and I decided to create a new course on how to build a web business with a webmaster.  There is a special offer on this new course that expired to the general public last Tuesday…but is still available to you.  See the offer here.

Get this course FREE if you join us in Ecuador this February.

Feb 9-11 Beyond Logic Keys to More Wealth & Better Health

Feb. 13-15 International Business & Investing Made EZ

Feb. 16-17 Imbabura Real Estate Tour

Attend any two Ecuador courses or tours in a calendar month…$949 for one.  $1,349 for two

Attend any three Ecuador courses or tours in a calendar month…$1,199 for one.  $1,799 for two

Or join Merri, me and Thomas Fischer of Jyske Global Asset Management, July 24-26, 2009 in North Carolina for International Investing and Business Made EZ

Multi Currency Bank Risk


Multi currency investing and multi currency banks reduce risk.

During this current credit crisis, it makes sense to pay attention to ways to bank risk as well as investment and multi currency risk.

Eleven US banks have failed in 2008, seven of them since mid July.

Now a Warren Buffett owned insurance company has stopped insuring bank deposits above the federal $100,000 guarantee. This withdrawal of insurance shows that many insurers and bankers are worried about future bank failures.

One of many reasons I have banked with Jyske Bank (beyond the fact that they are multi currency experts) for many years is their strong safety ranking.

I like the fact that Denmark has ranked high in Moody’s and other country ratings as one of the safest countries in which to bank.

However, recently one Danish Bank had problems.

Thomas Fischer at Jyske Bank sent me this note in July 2008:

“Hi Gary, I just want to keep you informed that this morning Roskilde Bank (a Danish regional bank) had to ask the Danish Central Bank for support. It is the 9th largest Danish bank and it has been hit hard as it has been involved in the Danish real estate market. The share dropped 45% this morning. Some other smaller regional banks have seen their share prices falling between 10-20%. Jyske Bank has dropped 1.3% The Central Bank will probably put Roskilde Bank up for sale either the entire bank or parts thereof. The bank will not be allowed to collapse and the clients are thus not going to lose any money but it is obvious not good timing to get a situation like this. Thomas”

Thomas was correct and shortly after the Globe and Mail reported:

COPENHAGEN — Denmark’s central bank unveiled an $896.8-million U.S. bailout of Roskilde Bank acting to confine the negative effect of the struggling bank on the Danish financial system. The central bank stepped in after Roskilde, Denmark’s eighth-largest retail bank by market share, failed to receive any offers after putting itself up for sale in the face of bigger than expected writedowns on real estate loans.

The article outlined that Roskilde was extraordinary as a Danish bank in
that it was heavily exposed to the property sector and that other Danish banks in general were well prepared in a deteriorating Danish economic situation.

The Danish Central Bank had no expectations of any other banks suffering
similarly.

In fact a June 2008 report from Denmark’s National Bank says:

Denmark’s domestic and foreign central-government debt has the highest rating from Standard & Poor’s (AAA), Fitch Ratings (AAA) and Moody’s
(Aaa). Standard & Poor’s, Fitch Ratings and Moody’s affirmed the rating
in September 2007, December 2007 and April 2008 respectively with an
unchanged stable outlook.

Analytical reports and specific ratings on individual government secu-
rities are available on the websites of respectively Standard & Poor’s
(www.standardandpoors.com), Fitch Ratings (www.fitchratings.com) and
Moody’s (www.moodys.com).

Jyske Bank also ranks well on its own and has a stable outlook at this time. unlike most major banks. Here are current rankings:

Bank Rating Outlook
Jyske Bank A+ Stable
Citigroup AA- Negative
Deutsche Bank AA- Negative
Goldman Sachs AA- Negative
JP Morgan Chase AA- Negative
Credit Suisse A+ Negative
Lehman Brothers A Negative
Morgan Stanley A+ Negative
UBS AA- Negative

As can be seen, Jyske Bank is doing well. Jyske is the only bank on the list with a stable outlook. All others are on the watch list for down-grading.

Note that Jyske Bank has the same rating as Morgan Stanley but a better outlook.

Jyske Bank’s rating is better than Lehman (after today probably much better), the same as Credit Suisse and one grade below the others. However, it’s very seldom that S&P give a rating above A+ for a relatively small bank like Jyske Bank. The other banks on the list benefit from their size but this does not tell much about how well they are run.

If you have any questions on how Jyske Bank you can see the bank’s home page www.jyskebank.dk/english and read the latest semi-annual report.

US investors should contact Thomas Fischer at fischer@jgam.com

Non US investors should contact Rene Mathys mathys@jbpb.dk

The thousands of other reasons I like Jyske are the people that work there.

An article at scienceblog.com entitled “Happiness is rising around the world” says that Danes are the happiest people in the world.

The article says:

People in most countries around the world are happier these days, according to newly released data from the World Values Survey based at the University of Michigan Institute for Social Research.

During the past 26 years, the World Values Surveys have asked more than 350,000 people how happy they are, using the same two questions.

Data from representative national surveys conducted from 1981 to 2007 show the happiness index rose in an overwhelming majority of nations studied.

The 2007 wave of the surveys also provides a ranking of 97 nations containing 90 percent of the world’s population. The results indicate that Denmark is the happiest nation in the world and Zimbabwe the unhappiest. The United States ranks 16th on the list, immediately after New Zealand.

Economic growth, democratization and rising social tolerance have all contributed to rising happiness, with democratization and rising tolerance having even more impact than economic growth. All of these changes have contributed to providing people with a wider range of choice in how to live their lives—which is a key factor in happiness.

“The results clearly show that the happiest societies are those that allow people the freedom to choose how to live their lives,” Inglehart said.

As an example, Inglehart points to the tolerant social norms and democratic political systems in Denmark, Iceland, Switzerland, the Netherlands and Canada all of which rank among the 10 happiest countries in the world.

In my opinion this happiness shows through at Jyske. Our dealings have always found the staff to be helpful, cheerful and willing to take an extra step to help make us as their customer happy as they are

Until next message, may you be happy too.

Gary

Join me and Thomas Fischer from Jyske Global Asset Management in North Carolina to learn more about economic trends.

International Investing and Business Made EZ North Carolina

We’ll have lunch at the farm and enjoy the leaf change.

farm colors

Thomas Fisher speaking to our delegates at the farm.

seminar-roses

orange-roses

multi-currency-meeting

Delegates enjoying a private conversation with Thomas Fischer during a coffee break at the farm.

This is the most beautiful time of the year on the Blue Ridge.

multi-currency-meeting-in-autumn