New Risks Emerge


New risks have emerged in emerging markets for three reasons.

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

Now that era is dead.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

fincne.yahoo.com chart

Chart from www.finance.yahoo.com

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

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

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

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

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

France has forbid the import or export of physical gold.

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

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

ENR also provides a solution.

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

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

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

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

Currency shots

ENR’s currency recommendations:

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

Currency shots

Currency shots

Currency shots

Currency shots

(Click on images to enlarge.)

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

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

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

Gary

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

Learn How to Write to Say or to Sell

Seven P Secrets of Self Publishing

When you write, you can work anywhere. 

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Here I am working poolside in the winter, at our Florida farm.

gary scott

Here I am with our hound Ma, working during the summer at our North Carolina farm.

Learn how to earn everywhere, while living anywhere you choose.  I have been able to earn by writing in Hong Kong, England, the Isle of Man, Dominican Republic and Ecuador to name a few of the place I have lived.  Everywhere I have been… too numerous to share here, I have been able to work.

All I need is my laptop.

That’s all you need too… a laptop to be free!

Before computers, a pencil and pad did the job.

Freedom is just one benefit you can gain from writing.

Another benefit is income.   Writing has brought me both our farms, free and clear… plus a lot more.

Another good example of earning potential is my friend Hugh Howey.   He was working for $10 an hour in a book store when he self published his novel Wool, typing in a storage room during his lunch breaks.

Soon he was earning over $100,000 a month on Amazon.com.  This helped secure a six-figure book deal from Simon & Schuster, and an option for film by Ridley Scott, director of Blade Runner and Alien.

That’s what he’s doing now.

Hugh Howey

Sometimes Hugh and I get together at my  farm and play chess (he beats me badly).

Writers like High are great inspirations.

A couple of years ago Hugh  left Florida, and moved to South Africa.  He had a sailing catamaran built for him and now can sail the world while he continues to write.

Hugh explained it like this: And that’s the miracle of working as a writer: I can do it from anywhere and everywhere. The past few years, I’ve done a lot of writing from airplanes and airports while on business trips abroad.  SAND was entirely written overseas while traveling through seven different countries; I think it’s a better story because of those inspirations.  In upcoming years, I may be writing near your home port.

Hugh’s a super star writer and his success could not happen to a more deserving and talented person.  He pours enormous energy into being worthy of his readership.  But you do not have to be a million dollar a year earner or a traveler to benefit from writing.

The good news is… you do not need a huge success to have a rich and fulfilled lifestyle.  Self Publishing can bring you a life that most people only dream of, as a journeyman writer, instead of a super star.

May I hastily add that the path to stardom begins as a journeyman… so the journeyman’s path brings success without stardom… but can also lead to stardom.

What most success stories like Hugh’s rarely explain is the many hours of writing that was devoted before their self published book sales soared.   Hugh, like most writers were journeymen first.  Stardom came later.

Here are sevens secrets that can help you become a journeyman writer. 

The secrets are a writer’s armory of tools that allows almost anyone to create successful publications for income, freedom and fulfillment.

Take Merri’s and my publishing business as an example.  

Merri and I are not writing stars.  We are journeymen who have for more than 40 years, year in and year out, earned solid income writing and self publishing dozens of publications about multiple subjects.

Some years that income has been more than solid… over a million dollars.  Yet in terms of stardom, we are hardly known.

In a moment you’ll see why that’s fine for us and probably will be for you too.

First some history.

Merri became involved in self publishing over 40 years ago… first helping a veterinarian publish a book on a very specific market… animal acupuncture. Then she showed a needle point artist how to sell more books to an even more specific audience… “needle point enthusiasts”  about her needle point work to an audience larger than the population of the city she lived in.  This led Merri to eventually become Executive Editor of an award winning magazine in Florida.

My story allowed Merri and me to work and live from Hong Kong to London to Europe to Eastern Europe, then the Caribbean and then Ecuador… making millions in the process of following our adventures… having fun… while helping a large readership adapt to a rapidly changing world.

That’s what self publishing can bring, profit, adventure and fulfillment, a great feeling of worth and wonder.

Self Publishing has created exactly the lifestyle we desire allowing us to span the world and work with meaning and purpose.

Self Publishing has become a new business art form. 

The seven secrets can help you start your own self publishing business now.

Everything in publishing is new and exciting and changing.  Publishing is being recreated by the wonderful power of destructive technology.

Everything is new… except the seven secrets. 

Change in the publishing industry is disturbing many.   We love this evolution due to these seven secrets we call the 7Ps.  The 7 Ps are so fundamental to writing and publishing that new technology enhances rather than reduces their power.

The First P is Passion.

Whatever your passion, you can immerse yourself in it AND create income with self publishing.  This can be your direct ticket to the kind of fulfillment you’ve always wanted.

Whether you want to travel the world or live as a recluse, work 12 hours a day or not work much at all,  you can set your schedule to succeed, if you’re willing to learn these seven secrets.

You can start part-time with any dream, passion, and budget.  Once you’ve created a product, you’ll enjoy the “multiple effect” of producing profits over and over again.

So the question is… What do you love to do?

What’s Your Passion:  An example is that thirty years ago, a client of Merri’s had a passion to help people who were in pain?  He published a series of pamphlets explaining various chiropractic disorders in very simple terms.  For example: “What Is Whiplash?”

The pamphlets contained solid information, but were simple 5″ x 7″ brochures with drawings and explanations. He sold them with a rack to chiropractors, who put them in their offices for patients to read.  These little self-published items sold year in and year out for decades.

There are thousands of ideas of this sort that can lead to big business.  It’s just a matter of defining and then acting on your passion.

Although I can work when I please and go where I wish, for me the most important reason for being a publisher is the satisfaction it brings. 

I love the projects I take on, so work doesn’t feel like, well… work.

What do you love?  If you love golf, then you can write and sell publications about golf.  Love travel, fishing, dogs, dolls, or art?  Write and sell publications in these fields.

Are you concerned about crime, war, poverty or environmental issues?  You can publish information products that help reduce these concerns.

Would you like to help the world be a more spiritual place?  Publish a newsletter, write a book (or hire someone to write it for you), record a tape… publish something that enlightens people.

Whatever your passion, you can immerse yourself in it and earn income by publishing for ereaders, print on demand, CDs, lists, bound books, or any format you choose.

Be immersed in your passion and get paid well for it. 

This is why stardom is not the main goal for most writers and self publishers.  Extra income, more freedom and fulfillment are usually more than enough enough.

The seven Ps are:

#1: Passion

#2: Problem

#3: Person

#4: Profitably Priced Product

#5: Prospecting Pathway

#6: Promise

#7: Presentation

The first time I exposed others to the secrets in Self Publishing was in a weekend “Writer’s Camp” seminar.  We offered the camp for $1,500. 80 delegates enrolled.  People from all walks of life attended—chiropractors, businessmen, investors, doctors, realtors, inventors, airline pilots, engineers, and housewives.

Merri and I were so overwhelmed by the response, we decided to make it available to a larger audience.  We created a written course based on our current self publishing activity called “Self Fulfilled – How to be a Self Publisher.”  Then we recorded the weekend “Writer’s Camp” seminar.

Thousands have used the course as it has evolved over the decades.

You can receive both the written course and the recorded weekend seminar, in an MP3 file, in a special “Live Well and Free Anywhere” program I am making available to you.  The normal fee is $299 for the written course and $299 for the recorded workshop.   I’ll send you both the course and the recorded workshop and my course “International Business Made EZ (also $299) all for $299.  You save $598.

We are so confident that you’ll gain from this offer that if you are not fully satisfied, simply email us within 60 days for a full refund .

These courses are not theoretical.  They describe, step-by-step, how Merri and I built a million-dollar international business and how we are running this self publishing business right now.   We use the 7Ps today just as we did four decades ago to create a strong annual income.

This correspondence course is for those who would like their own international self publishing micro business for fun and profit. If you want fun, freedom, extra income and fulfillment with your own full or part time writing or want to build your existing business, by writing to sell you can profit from this course.  The course can help who want their own business or who want to have a business together or a family business.  This is the perfect course for those who can no longer find employment, who are looking for ways to earn abroad and who wish to retire and supplement their income.

Whether you are retired, an investor, chiropractor, doctor, dentist, professional or already own your own business, this offers another way to make money, to turn your passion into profit. We guarantee that we have shared all we know to help you start and run your own international business.  Enjoy and live a life of following your Passion to Profit… through writing.

Here is a special offer. 

We provide two emailed courses  “Self Fulfilled – How to Write to Sell and be a Self Publisher” and “International Business Made EZ”.

We include the “Self Fulfilled Writing and Self Publishing Course” because there are two reasons to write, when you have something to say or when you have something to sell.  In this day and age many of us want to do both, make a statement that makes the world a better place and earn something extra in the process. 

Whatever your passion, however you do business, chances are you’ll be writing either to create a product or to sell a product. 

You save more than $598 because you also receive a recorded webinar conducted by our webmaster David Cross (at no extra cost).

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David Cross

David has been our webmaster since our website began in the 1990s.  He is Merri’s and my business partner. We could not run our business as we do without him.

Learn the tactics we use in our web business that condenses 27 years of practical experience about search engine optimization, and writing for search engines.

For the last 27 years David has worked with companies large and small – IBM, Agora Publishing, AstraZeneca and many small business owners.  He has worked in 22 countries, and lived in six of them.

David’s clients span the globe and represent companies and charities both large and small.  From corporate giants to small, one-woman businesses and everything from finance, healthcare, publishing, technology, real estate, veterinarians, alternative health centers and everything in between.

David is an essential part of our web based business.

Myles Norin, CEO of Agora, Inc.  wrote:  “I have found David’s knowledge and experience unmatched in the industry.  Without David’s expertise and guidance for the past 7 years, we would not be nearly as successful as we are.”

As Senior Internet Consultant to Agora Inc. in Baltimore, MD, he worked closely with Agora’s publishers and marketers and – over a 7-year period – helped to propel Agora’s online revenues from around $20 million to well over $300 million.

David’s webinar will help you gain benefits in your micro business that large internet marketing companies use.  In this practical recorded workshop you will learn valuable skills to help your micro business.

There has never been a time when the opportunity for small businesses abroad has been so outstanding.  Expand your borders now!  Increase your economic security freedom, independence and success.

If you are not fully satisfied that this offers you enormous value simply email us for a full refund within 60 days.  You can keep all three courses as our thanks for giving our courses a try.

You also receive a report  “How to use Relaxed Concentration to Brainstorm Business Ideas” and a recorded workshop “How to Become and Remain Rich With Relaxed Concentration” at no additional cost.

Plus you get more in the program.

You receive regular writing and self publishing updates for a year.  Businesses usually need to evolve.  Merri and I continue to publish and have our independent businesses.  Some basics have remained for decades, but new strategies occur all the time throughout the year.  We’ll be sending along updates that share our most recent experiences as we learn and continue to grow our international micro business from Smalltown USA.

My special offer to you in this “Live Well and Free Anywhere Program”, is that you receive:

  • “International Business Made EZ” course
  • “Self Fulfilled – How to Write to Sell” course
  • Video Workshop by our webmaster David Cross,
  • The entire weekend “Writer’s Camp” in MP3,
  • MP3 Workshop “How to Gain Added Success With Relaxed Concentration”
  • Any updates to any of the courses, workshops, reports or recordings for a year.

We are so confident that you’ll gain from this offer that if you are not fully satisfied, simply email us within the first three months for a full refund . 

Order “Self Fulfilled – How to Publish to Sell” and a quarter of update lessons $79.   Click Here.

Order “Self Fulfilled – How to Publish to Sell” and a full year of update lessons $299.  Click Here.      

See success stories from Self Publishers and a few who have attended the “Writer’s Camp” that you will receive on MP3.

 

 

 

 

When giants slow down