Tag Archive | "Austria"

Power Distance Index Profits


Power can bring profits in many ways… the first via the Power Distance Index.

I recently wrote in Ecuador shamans and truth how Merri and I have been drawn more and more back to the USA.   We have enjoyed phenomenal success in Ecuador but we are pioneers… Our investments and business are early in and early out. Ecuador is now really well on its way and for us this is not so fun.

We’ll look at how the Power Distance Index makes Ecuador living better.  First more on PDI.

We’ll still enjoy time in Cotacachi and on the Pacific, but we are arranging for others to take over the day to day so we can  head off on a new adventure.

Part of our next horizon is to make our North Carolina farm much more self sustainable and to share what we learn in the process.

Thinking about this leads me to share some other thoughts on power and the Power Distance Index.

One powerful investing and business idea is to invest in countries with a low Power Distance Index (PDI).

Malcom Gladwell explains this in his newest book “Outliers” a book about what makes  success.

One part of the book looks at the importance of the Power Distance Index in each nation.  This is vital information because it explains how countries differ in their approach to dealing with risk and uncertainty.  The ability to handle risk and uncertainty  in changing times is vital.

Here is how the website www.kwintessential.co.uk describes PDI.

The Power Distance Index (PDI) is one of the five intercultural dimensions developed by Hofstede. In short this cultural dimension looks at how much a culture does or does not value hierarchical relationships and respect for authority.

Examples of cultures with high PDI scores include Arabic speaking countries, Russia, India and China. Those with low scores include Japan, Australia and Canada. See a world map of power distance index scores.

So how does this manifest in a culture or country?

In a high power distance cultures the following may be observed:

. Those in authority openly demonstrate their rank.
. Subordinates are not given important work and expect clear guidance from above.
. Subordinates are expected to take the blame for things going wrong.
. The relationship between boss and subordinate is rarely close/personal.
. Politics is prone to totalitarianism.
. Class divisions within society are accepted.

In a low power distance culture:

. Superiors treat subordinates with respect and do not pull rank.
. Subordinates are entrusted with important assignments.
. Blame is either shared or very often accepted by the superior due to it being their responsibility to manage.
. Managers may often socialize with subordinates.
. Liberal democracies are the norm.
. Societies lean more towards egalitarianism.

The Power Distance Index is a measure of the attitude toward hierarchy.  In short the PDI shows how much people overall, in a country, respect authority.

This index is really important in this rapid changing world because authority almost always lags behind reality.  Authority resists required change to adapt in altering conditions.  Countries with a high PDI suffer from change.

For example the US has a low PDI. Russia has a very high PDI.  Thus during the changing 1980s the Soviet Union disintegrated while the US rebounded and thrived.  PDI differences were not the only reasons for this but when a nation’s leadership cannot communicate with its people…  it cannot sense reality as times shift.

On the subject of the 1980s. Many readers are worried about the current economic downturn.  Current conditions are not as poor as during the twin recessions of the 1980s, when unemployment exceeded 10 percent.  This downturn is on track to be worse… but not yet.

Gladwell writes in “Outliers::  In low power index countries, power is something is something in which power holders are almost ashamed and will try to underplay.  In Austria (a low PDI country)  Prime Minister Bruno Kreiskt was known to sometimes take a streetcar to work.

Here are six countries with high PDIs:
Brazil
South Korea
Russia
Mexico
Philippines
Uruguay

Six Countries with low PDIs:
Austria
Denmark
United States
Ireland
Australia
New Zealand

A low PDI can help a country adapt faster and better to change, so look for investments in countries with low PDIs. 

This message is an excerpt from our latest multi currency lesson.  You can read what to do now as a multi currency subscriber. Learn how to subscribe here.

However countries with high PDIs are often better for living.

I was thinking about this one recent morning while visiting Quito.  This is one of the world’s beautiful cities so I rose to watch the dawn.  The day broke in glorious rose patina.

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Like the days ahead…  the view was obscured until the light began…

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to reveal Quito’s beauty.

Ecuador’s Power Distance Index in Ecuador is a bit high. This does not stop a great city from growing. I loked out and saw that there was plenty here.  Riches enough.  All the …

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creature comforts…

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glowing in the daybreak.  Every material thing a person could want…

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As the light spread, i dressed and rode up to the hotel restaurant.

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I’ll looked out at Quito again in the light of day.

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There is amazing wealth here. The hotel restaurant is opulent.

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With amazing views around the city.  yet the prices here are low in part because…

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poor government is created with the help of a high Power distance Index. This  keeps most of the people in Ecuador poor.  This means that we can help bring and spending our money here.   This who do, help Ecuador’s poor and are rewarded with good living at a low price.

This reinforces what I wrote in “Multi Currency Bank Safety

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

On the subject of banking abroad Denmark has the second lowest PDI in the world (Austria is number one) so it is not surprising that for the last 20 years my major bankers have been in Copenhagen and Vienna.  I like the autonomy that investment advisers have in low PDI countries.

This is in my estimation one reason why Jyske Bank (Denmark’s second largest bank) was not caught in the sub prime or Madoff scandals.

Bank’s in countries with a low PDI are more likely to use the wisdom of their entire organization to head off trouble at the pass.

Organizations have enormous wisdom.

The book, “The Wisdom of Crowds, Why the Many are Smarter than the Few and How Collective Wisdom Shapes Business, Economies and Societies and Nations” by James Surowiecki tells how potent the wisdom of a group can be.

The book begins by telling how at the annual West of England Fat Stock and Poultry Exhibition in the fall of 1906, a British scientist became interested in a weight judging competition. 800 people, smart, dumb, old, young in all types of professions guessed the weight of two dressed oxen. The correct answer was 1,197 pounds. The scientist’s research found that the collective estimate was incredibly close, 1,198 pounds.

The book suggests that there is an uncanny and generally unconscious collective intelligence at work. The book shows how clouds of birds seem to move in one mind but actually are each acting on their own following four simple rules:

#1) Stay as close to the center as possible.

#2) Stay two body lengths away from your neighbor.

#3) Do not bump into another bird.

#4) If a predator dives at you get out of the way.

The book suggests that rather than crowds being mindless mobs that the many are weirdly smart and effective even when many of the group are average or below in intelligence or experience.

A key point that the article makes is that there is incredible effectiveness in a diversity of individual intelligences and this is why we are sharing ideas about trends at this site. There are thousands of us reading these messages so perhaps our problem solving ability grows to the 4000th power.

However if a high PDI disconnects its leaders from this wisdom… the organization’s wisdom is wasted.

Bank safety is vital now and PDI can count. Here is a wonderful shot taken by our friend Dennis Goff.  Placid… yet most travel accidents… in air and by oat are caused by a high PDI. The Captain does not listen to his crew!

When you travel… wen you bank… when you invest look for low PDI!

High Energy Sunrise

This is why you may want to join me with the staff of Jyske Global Asset Management in Naples Florida to learn more about where in the world to invest now.  Learn how to attend this course free and save $499 to $750.

Until next message good global investing!

Gary

One of the best ways to prosper in this downturn is with your own internet business. You can enroll in our email internet course here for $299. However if you sign up for all three courses in June or later in 2009, I’ll send it free. You save $299. Learn more here

Get our web based course FREE if you join us in Ecuador. Learn more here.

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

Future 2009 courses

May 29-31  JGAM Florida Investment Course

June 12-14 Shamanic Mingo Tour
June 16-17 Imbabura Real Estate Tour
June 18-21 Ecuador Coastal Real Estate Tour

July 3-6 Ecuador Import Export Expedition
July 8-9 Imbabura Real Estate Tour
July 10-13 Ecuador Coastal Real Estate Tour

July 24-26 IBEZ North Carolina

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

Oct. 9-11 IBEZ North Carolina

Oct. 21-24 Ecuador Import Export Expedition

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

Ecuador Beach Restaurants


Ecuador beach restaurants offer wonderful variety, excellent food and really low prices.

Sunday lunch is great, so here are some of the wonderful Ecuador beach restaurants where you might find Merri and me enjoying a Sunday meal.

In Manta for a quick bite we visit the Oro Verde cafe.  The Oro Verde hotel is in the center of Manta.

ecuador-beach-restuarants

Bread and pastry, as a general rule, are not Ecuador’s best specialties. Not true at the Oro Verde!  Merri and I have lived in many countries including places with great pastry such as France, Germany, Austria, Swiaterland and Italy.

The Oro Verde has pastries as good as any we have ever enjoyed. The Sundays papers and these pastries go well together.

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Sadly the Oro Verde coffee is the terrible, machine made Nestecafe cappuccino.  I put up with it though to enjoy the croissants and especially delicious cinnamon rolls.

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For good… quickly served, fresh, no frills seafood we visit Manta’s  beach and…

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the Oh Mar restaurant.

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A great seafood meal is about $6… or for something special… like this lobster for $12.

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Moving north to Crucita… we enjoy the cafe at the top of Balsamaraqua gated community.

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Open and airy, you can spend a Sunday afternoon enjoying this incredible view.

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Further north is San Clemente where we live and stay at Vistazul.

Here restaurants range from the high quality restaurant at Palmazul…

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where a Sunday dinner can run $17… but with a view.

Right on the beach…

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for special occasions and fine dining Palmazul is the place.

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When feeling more casual we amble a couple blocks to the Submarine beach restaurant…

ecuador-beach-restuarants really on the beach.

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Where a meal is $4 to $5. You cannot beat the location.

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Here we are with our friends Bob and Barbara Humphrey…

ecuador-beach-restuarants and Ma

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After a great seafood meal we stroll two blocks back to Palmazul on this beach.

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One really excellent, evening restaurant on the San Clemente beach…right next to Vistazul is Gabriel  Graziani’s  tiny beach shack restaurant.

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He serves delicious pizza and lazagna.

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in his hand made oven.

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He collects all the fresh ingredients and makes the food while you are there.

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Gabriel is the real deal when it comes to  Italian Pizza. See him preparing at  our You Tube

Further north is Bahia and there are several great places there starting with Casa Ceibo.

ecuador-beach-restuarants Elegant but pricey…by Ecuadorian standards.

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Well worth it once in awhile.

For snacks the cafe in la Piedre hotel cannot be beat…here I am with Kjetil Haugan as we overlook the Chone Estuary on a warm breezy afternoon.

ecuador-beach-restuarants

If you like value and seafood, this part of Ecuador from Manta to Bahia will serve you well.

Until next message may you enjoy your Sunday meal.

Gary

Join us in Cotacachi and on Ecuador Coast in March.

Merri, our webmaster and I have created a new course on how to build a web business with a webmaster.  Here is a special offer on this new course.

You can enroll in this special course for $299. However if you sign up for our three courses in March 2009, I will send it to you free. You save $299.

March 8-9 Imbabura Real Estate Tour

March 10-15 Ecuador Import Export Expedition

March 16-19 Ecuador Coastal Real Estate Tour

Bob Shane will be at our March courses and will be available to provide health balancing.

Get our web based course FREE if you join us in Ecuador this March.

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

Future 2009 courses

May 29-31  JGAM Global Asset Strategy Seminar

June 12-14 Shamanic Mingo Tour
June 16-17 Imbabura Real Estate Tour
June 18-21 Ecuador Coastal Real Estate Tour

July 3-6     Ecuador Import Export Expedition
July 8-9    Imbabura Real Estate Tour
July 10-13 Ecuador Coastal Real Estate Tour

July 24-26 IBEZ North Carolina

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

Oct. 9-11     IBEZ North Carolina

Oct. 21-24 Ecuador Import Export Expedition

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

.

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.

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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…

cotacachi-real-estate

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 Investing Ahead


Multi currency investments fight inflation and can enhance wealth but require a long view .

There is a screech owl that lives in our barn and the way I watch him is sort of how I invest.

Can you see the owl?

To begin, an investing idea starts with a speck of thought…seeing the whole picture, but without many details.

Then it’s time to connect dots to see a closer picture.

Then we begin gathering information so the focus is closer…

until we can finally zoom in.

At this stage when we have zeroed in, we can act.

One big idea I have been tracking and investing in, is water. Now I am zeroing in on a new sub interest…water desalination.

An article sent by a reader entitled “Australia Turns to Desalination Amid Water Shortage” by Michael Sullivan first piqued my interest.

The article told how the Kwinana Desalination Plant, near Perth, produces 40 million gallons of drinking water per day from the Indian Ocean.

The article says:

Perth, with a population of about 1.7 million, is growing 3 percent a year — about 750 families a week move to the city, says Gary Crisp of the Western Australia Water Corp.

The Kwinana Desalination Plant south of the city opened two months ago. The facility, the first of its kind in Australia, covers just a few acres in an industrial park next to the ocean.

The water is sucked in through a pipe about 650 feet offshore in Cockburn Sound, at a rate of about 0.1 meters per second, says project manager Simon McKay.

That is slow enough to let the fish escape, but fast enough to provide nearly 40 million gallons of drinking water each day — roughly 20 percent of Perth’s daily consumption. That makes the plant the single largest source of water for the city.

McKay says it doesn’t take very long for the seawater to be ready for the tap — about a half-hour from the time it comes out of the ocean until it’s processed and distributed.

Desalination plants have been around in places like the Middle East for decades. But they’ve always been expensive to build and expensive to run. New technology has made them cheaper and more efficient, but they still consume a large amount of energy.

Environmentalists in Perth balked at the idea of using coal-fired plants to provide power for the one here, forcing the Water Corp. to find a non-polluting, renewable alternative. It found that alternative — wind energy — near the town of Cervantes, a three-hour drive north of Perth.

The Emu Downs Wind Farm houses 48 wind turbines, each as high as a 15-story building.

Kerry Roberts, the facility’s general manager, says Emu Downs is among the top 10 or 20 sites for this type of energy alternative in Australia.

“If you look at the combined output of the wind farm at maximum wind speeds — 24 to 28 miles per hour — you’re looking at an output of close to 80 megawatts,” Roberts explains. That’s enough power to run Perth’s desalination plant, 160 miles to the south.

This successful marriage of renewable technology and necessity has Crisp, of the Western Australia Water Corp., thinking big: “I predict that desalination will account for at least half of Perth’s water in the next 30 years.”

Other water-stressed seaside cities in Australia are taking a serious look at desalination, as traditional water sources dry up because of lack of rain. Sydney, on Australia’s southeast coast, is expected to commission a plant even larger than Perth’s in the next few months.

Nonetheless, the desalination boom extends far beyond Australia’s shores. McKay — the man in charge of getting Perth’s plant running — will soon be off to Muscat, Oman, to build another. His company’s order book is filling up quickly, he says, and he doesn’t expect that to change in his lifetime. Neither does Crisp.

“The world is going reverse osmosis,” he says, naming projects proposed from California to Spain.

Looking around, I found that one of the largest desalination plants is not far from where I lived (Naples) for years, Tampa Florida. The Tampa Bay Seawater Desalination facility is an integral part of the Tampa Bay region’s drinking water supply. This is claimed to be a drought-proof, alternative water supply that provides up to 25 million gallons per day of drinking water to the region.

There are large desalination projects underway in California as well. However a look at the top 50 desalination projects show that the majority of them are in the Middle East.

Desalination is a sector that is bound to grow. It is estimated that 2.8 billion people live in areas of high water stress and this number is expected to increase by 50% over the next 20 years.

Areas of greatest concern include India, China and the Middle East.

There are two forms of desalination, evaporation and reverse osmosis (salt water forced through a filter under high pressure). There are already over 10,000 desalination plants going, mostly in the Middle East.

There are huge expenditures underway for desalination and wastewater purification and a number of companies are cashing in on this fact.

General Electric may be in the lead. It purchased Ionics, which builds desalination plants and makes filter membranes.

The French company Veolia Environnement (VE) is a major desalination plant and membrane supplier. This company earns over a third of its revenue from water businesses. The Japanese chemical company Nitto Denko (6988.T) is a large membrane supplier as is Dow Chemical (DOW), DuPont (DD), and GE.

Desalination plant builders include Italian Impreglio (IPGOF), South Korea’s Doosan Heavy Industries & Construction (DOHIF), French Suez (SZEZY), German Siemens (SI), and Spanish construction companies Acciona (ACXIF) and Abengoa (ABGOF).

We have written often about Singapore-listed Hyflux (HYFL) which makes filter membranes used to purify water and builds desalination plants. Hyflux is building a 500,000-cubic-meter per day desalination plant in Algeria, which, when completed in 2011, will be the world’s largest. Hyflux is also building 40 water treatment plants in China, where it gets 81% of its revenue. This share is in our Green portfolio as is Japan’s Kurita Water Industries (6370.T) which builds desalination plants and sells other water purification equipment, getting all of its 205 billion yen [$2 billion] in revenue from water-related businesses.

Canadian H2O Innovation (HEO) makes filtration membranes for wastewater treatment. Austria’s Christ Water Technology (CRSWF) sells desalination and other water purification equipment. American Water (AWK), is in New Jersey and ran the desalination plant in Tampa, which is the largest in the U.S. Energy Recovery in San Leandro, Calif. has also sold shares to investors.

Desalination plants are expensive and create local opposition for several reasons.

First, they produce a waste of highly concentrated salt water that can destroy the surrounding ocean habitat. Second they require a lot of energy which if created by coal, creates air pollution.

The third concern, perhaps the biggest is concern for the organisms that are killed by the process of withdrawing seawater. Tiny fish larvae and plankton are killed in process.

Te nature of our existence is such that we cannot eliminate our foot print entirely. very solution to environmental problems seems to create others. Let’s hope that technology will help make desalination one of humanity’s solutions…not problems. Since desalination can produce fresh water where there is none, and water is one of the few items in daily life that has no substitute, I be looking to invest in companies that provide fresh water with minimal impact on the environment.

Once I find such a  company,  will have identified one of many filters we should use when we review value.  We look for shares of companies that have a product or service in a wave of the future…such as desalination.

Then there are still many questions to answer to determine if the share offers a good value or not.  The questions include:

#1: Are the shares traded in a good value market?
#2: Does the share trade at fair Price to Earnings and Price to Cash Flow ratios?
#3: Does the share pay a good value dividend?
#4: Do the shares have a good value relative to their previous price?
#5: Does the company have rising earnings?
#6: Has the share price been rising?
#7: Is the company’s management good.

My feeling is that desalination will grow especially, that which is provided by wind energy, which is often available at the ocean and in semiarid parts of the world.  Shares in companies that answer yes to the questions above  will be interesting places to invest.

Until next message, good global investing to you.

Gary

Learn more about economic safety this November. Join Merri, me, Steve, Kjetil Haugan or Thor Anderson of Vistazul and Peter Conradsen of Jyske Global Asset Management in Cotacachi Ecuador. We’ll review economic conditions, Ecuador real estate, my entire portfolio and investing and business ideas for the months ahead.

Nov 7-9 2008 International Investing and Business Made EZ Ecuador
https://www.garyascott.com/catalog/international-business-made-ez-ecuador

See the wonderful balconies in the Primavera condos at for sale at $46,000 in Cotacachi.

multi-currency-Ecuador-condo-interior

Nov 10-11 Imbabura Real Estate tour
https://www.garyascott.com/catalog/ecuador-real-estat

Then travel to the coast. Enjoy the Vistazul swimming pool on Ecuador’s Pacific.

Picture 9

November 12-15, 2008 Ecuador Coastal Real Estate Tour; Quito Real Estate Tour
https://www.garyascott.com/catalog/ecuador-coastal-real-estate-tour

See discounts for two or more of these courses and tours

Multi Currency Strategy Emerging


Multi currency strategy emerging markets are worth review now. Recent multi currency messages entitled Multi Currency USA and Multi Currency Global looked at the importance of multi currency investments in Europe, Japan and the US.

We continue the multi currency review in this message looking at Jyske Bank’s multi currency strategic review of the biggest emerging market, China. Jyske says:

Seen in the light of a major slowdown in economic growth, Chinese exports will come under heavy fire in the coming months. Given a weaker export sector, and presumably also weaker investments in the private sector as well as slower activity in domestic property-related activities, we anticipate a moderate slowdown in economic growth. By Chinese standards, moderate still means economic growth above 8%, and for the rest of the year, the growth rate will presumably be around 9%, i.e. a growth rate just below 10% for 2008.

International investors have been concerned that the Chinese government would react too slowly to growth risks and that this would send up the risk of a serious setback (i.e. GDP growth rates much lower than 8%). Such fear seems to be out of place, based on the demand figures for July. Foreign trade, retail trade and fixed investments beat expectations although industrial activity is gearing down marginally.

The Chinese authorities have traditionally introduced macro-economic policies supporting economic growth, including an expansionary fiscal policy, monetary-policy easing etc. to avoid a hard landing. We also expect that this will happen this time if growth seems to be too slow. The authorities have recently raised the tax benefit on exports and eased up the tight management of corporate loans in the financial sector.

On the domestic front, the trend in consumer demand is still impressive: July’s 23.3% growth in retail sales was higher than expected. This happened although consumers are squeezed by higher food prices, the solid correction in the Chinese equity market and a slowdown in the real-estate market (although the impact from the two last-mentioned factors was reflected in lower sales figures for cars, furniture and building materials).

With prospects of a moderate slowdown in industrial activity in the coming quarters, the growth in Chinese demand for many important commodities will presumably slow down. Recent data indicate that this trend has already set in: for instance crude-oil imports dropped back by 2.1% m/m in July and by 8.7% in June whereas iron ore imports dropped by 4.2% and 3.5% in these two months.

This suggests that investors are more worried about China than they should be. Chinese growth looks dimmed, but by most financial measures even this dimmer light is bright compared to economics in most countries. The fundamental economic fact is that China is the most populated nation on earth racing into middle class capitalism.

Equity investors may have over reacted and oversold the Chinese market.

In August, the LA Times wrote:

SHANGHAI — Many Chinese investors had hoped the Olympics would give a boost to their nation’s sagging stock market. So far, just the opposite has happened. The benchmark Shanghai composite index tumbled 5.3% on Monday, falling for the sixth time in seven trading sessions. The index has plunged 15% since the Beijing Games opened Aug. 8, and it now stands at 2,320 — down 56% since the start of the year, making it one of the worst performers in the world.

Since then the market has not rallied.

The Guardian wrote yesterday (Sept. 8, 2008): The main Shanghai index <.SSEC> shed 2 percent on Monday, touching a fresh 20-month low, despite a rally elsewhere in Asia triggered by the takeover of the two firms.

The U.S. Treasury’s takeover of Fannie Mae and Freddie Mac is good news in the short term for China, the biggest holder of the giant mortgage lenders’ debt, but Beijing’s huge U.S. exposure still poses a serious risk, a prominent government researcher said on Monday.

The Shanghai stock market is down 67% in less than a year. Yet as Jyske noted above, foreign trade, retail trade and fixed investments are beating expectations.

This is the type of multi currency distortion we look for as value investors.

This does not mean we should jump headlong into Chinese shares.

China according to the analysis of Michael Keppler remains one of the low value markets. Keppler’s sell candidates are China , Egypt , India , Indonesia, Jordan, Morocco.

Market timing rarely works. Value investing is far more effective and based on value alone, it apears to be too soon to jump in the Chinese market in a broad way.

However we can start reviewing Chinese opportunities looking for specific values.

One share to check is Hyflux Water. Hyflux is a Singapote company that provides water services in China. Keppler ranks Singapore as a low value major market along with Austria , Canada, Denmark, Hong Kong, Singapore, Switzerland and the U.S.A, but Hyflux may offer good value now.

I first wrote about Hyflux in 2004.

We invested $51,000 in our Model Green Portfolio last November. This investment has dropped to $40,193.

We are reviewing Hyflux now in our Multi Currency Portfolio Course.

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

International Investing and Business Made EZ & Fun Part II


International investing and business have proven themselves over the past 40 years to be profitable. And even more than the profits are the broadened horizons, fulfillment and fun!

Yesterday’s message International Investing and Business Made EZ & Fun looked at why International investing and business should be a fun filled process…not a dull boring set of numbers.

One reason for this is that those who live a fulfilled, involved fun existence are likely to be healthier…with less need for expensive pharmaceuticals and medical treatment.

This makes life better plus can save huge amounts of cash.

This is likely to become even more important in the years ahead for those who live in much of the Western world.   Existing medical systems are already filled with problems.  Inflation and aging populations will make the problems even worse.

At the turn of the decade, The World Health Organization analyzed the world’s health systems. The WHO used five performance indicators to measure health systems in 191 member states.

The five performance indicators were:

* Fairness of financial contribution.  While private health expenses in industrial countries now average only some 25 percent because of universal health coverage (except in the United States, where it is 56%), in India, families typically pay 80 percent of their health care costs as “out-of- pocket” expenses when they receive health care.

* Overall Level of Health.

* Distribution of Health in the Populations:  the average level – goodness – and the smallest feasible differences among individuals and groups – fairness.

* Responsiveness: respect for persons including dignity, confidentiality and autonomy of individuals and families to decide about their own health as well as prompt attention and access to social support networks during care, quality of basic amenities and choice of provider.

* Distribution of Financing.

The study revealed that U. S. health system spends a higher portion of its gross domestic product than any other country but ranks 37 out of 191 countries.  The United Kingdom, which spends just six percent of gross domestic product (GDP) on health services, ranks 18th.  Several small countries – San Marino, Andorra, Malta and Singapore are rated close behind second- placed Italy.

Here is the WHO ranking.

1         France
2         Italy
3         San Marino
4         Andorra
5         Malta
6         Singapore
7         Spain
8         Oman
9         Austria
10       Japan
11       Norway
12       Portugal
13       Monaco
14       Greece
15       Iceland
16       Luxembourg
17       Netherlands
18       United  Kingdom
19       Ireland
20       Switzerland
21       Belgium
22       Colombia
23       Sweden
24       Cyprus
25       Germany
26       Saudi Arabia
27       United  Arab  Emirates
28       Israel
29       Morocco
30       Canada
31       Finland
32       Australia
33       Chile
34       Denmark
35       Dominica
36       Costa Rica
37       United  States  of  America
38       Slovenia
39       Cuba

Most of the readership of this site live in countries where the medical system is not even in the top 15 countries!

This means that many of us, (especially us boomers now in our 60s), may want to rely on a good lifestyle to keep our health…not the medical system.

The cost of this medical system is another reason we want to have independence
rather than reliance on government funded programs.  We’ll see why next message.

Until then, may your international investing and business be good…and fun!

Gary

Learn about our next International Investing and Business Course in North Carolina

Ecuador Ecuador Import Export Course

International Investing and Business Made EZ Ecuador