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Global Investment Advantage


The big advantage to global investments is that the sun always shines somewhere.

ecuador-opportunity

Follow the sun… and the opportunity… like this (a Galapagos Ecuador sunset actually).  There is opportunity here.  See why below.

Ecuador real estate offers great opportunity, but lets expand our investing view globally… then we’ll see more Ecuador real estate.

Recently, on the anniversary of the bankruptcy of Lehman Brothers, Ben Bernanke said that the US recession is probably over but the economy will remain weak for some time due to unemployment.

He said, “From a technical perspective, the recession is very likely over,”  He said the consensus is the economy is growing yet added that the economy would still feel “very weak” to Americans concerned about job security.   The stock market was not impressed and Wall Street fell  lower.

According to Jyske Global Asset Management, (JGAM) retail sales jumped 2.7% in August, the fastest rise in more than 3 years, but much of the spending came from the “cash for clunkers” boost and “back to school” month related sales. They question if Bernanke is correct.

JGAM also pointed out that the US dollar continued to slide hitting a 2009 low at 1.4748 to the euro while gold rise above $1,000 oz.

JGAM’s managed portfolios have performed very well.  Year–to-date they have risen between 8.7% and 28.7% depending on the risk profile and portfolio.

What can one do?

First, remember that the sun always shines somewhere as evidenced by a September 17, 2009 New York Times article entitled “Recovery Picks Up in China as U.S. Still Ails” by Keith Bradsher.

Here are some excerpts:  Investors’ interest in the real estate market is picking up as economic growth returns across the Chinese economy.

Just eight months ago, thousands of Chinese workers rioted outside factories closed by the global downturn.

Now many of those plants have reopened and are hiring again. Some executives are even struggling to find enough temporary staff to fill Christmas orders.

The image of laid-off workers here returning to jobs stands in sharp contrast to the United States, where even as the economy shows signs of improvement, the unemployment rate continues to march toward double digits.

In China, even the hardest-hit factories — those depending on exports to the United States and Europe — are starting to rehire workers. No one here is talking about a jobless recovery.

Even the real estate market is picking up. In this industrial town 90 miles northwest of Shanghai, prospective investors lined up one recent Saturday to buy apartments in the still-unfinished Rose Avenue complex. Many of them slept outside the sales office all night.

“The whole country’s economy is back on track,” said Shi Yingyi, a 34-year-old housewife who joined the throng. “I feel more confident now.”

The confidence stems from China’s three-pronged effort — a combination of stimulus, liberal bank lending and broad government support for exports.

The Chinese Central Bank said the country’s economy surged at an annualized rate of 14.9 percent in the second quarter. The United States’ economy shrank at an annual rate of 1 percent in that period.

“So often China and the U.S. are mixed together as being in the same situation, and that is totally wrong,” said Xu Xiaonian, an economist in Beijing with the China Europe International Business School.

But with more economic planning than the United States, China has been able to disburse its stimulus much faster, turning it into new rail lines and highways.

The state-controlled banking system here — which breezed through the global financial crisis with minimal losses as American financial institutions reeled — unleashed $1.2 trillion in extra lending to Chinese consumers and businesses in the first seven months of this year. That money is financing everything from a boom in car sales, up 82 percent in August from a year earlier, to frenzied factory construction.

To be sure, not all the laid off workers throughout China have been hired back.

“Some plants reduced worker numbers by 20 to 30 percent, now they hire back 10 percent,” said Stanley Lau, deputy chairman of the Federation of Hong Kong Industries, which represents export-oriented factories employing 10 million Chinese workers.

Global investors can kill two birds with one stone… invest in a faster growing economy and diversify out of the US dollar by investing in Chinese equities.

One way to invest in China is with the Jyske Invest China Equities Fund. This fund is available to non US residents and can be contained in portfolios of US residents managed by JGAM.

Jyske Invest recently wrote at its web site:

Market Comments, Q2 2009

Still signs that the economy will improve. For the second quarter, the fund generated a return of 38.01%, outperforming the benchmark by 0.21 percentage point. For the year to date, the fund posted a return of 40.71%, underperforming the benchmark by 1.38 percentage points.

Review

Over the past quarter the economic indicators continued the good trend. The PMI indicator, reflecting the general economic development, has now increased in six out of the latest seven months. When the PMI indicator is above 50, it is an indication that the economy is growing, which was the case in the past three months. The improvement of the economy has occurred earlier than expected.

Consumption indicators also show a positive trend. This is clearly reflected in the fund’s equities within consumption. Prices of several of the fund’s producers of sport equipment and cars such as China Dongxiang and Dongfeng Motor increased in particular.

There are clear indications of a turnaround in the real estate sector. The number of transactions increases sharply and the number of unsold apartments is on the decline. Our allocation to Chinese real estate companies has been high, which had a favourable impact on the relative return.

Outlook

We expect the favourable economic development to continue into the last six months of the year and that the government will continue to pursue a relaxed policy. The risk is that the policy is tightened again, which will adversely affect the equity market.
The market is no longer undervalued. Perhaps the valuation is fairer. A positive economic development and increasing earnings must drive equity prices higher now. The development in earnings estimates will be followed closely.

Jyske Invest adds that past performance is not a reliable indicator of future results. The value of and return on your investment may fall, and you may not get back the full amount invested.

The fund invests chiefly directly and indirectly in equities issued by companies which are based in China including Hong Kong or which pursue more than 50% of their activities (by sales or production) in China including Hong Kong.

Risk factors

The fund’s investments have a high risk profile and may see substantial fluctuations in the market value of the fund’s assets. The objective is to obtain a higher average return over time.

Performance of the fund for the last five years is below:

china-fund

Returns by year.

china-fund

Recent major investments.

china-fund

An ETF traded on the New York Stock Exchange that investors can use to invest in China is the SPDR S&P China Fund (symbol: GXC).  Any investors can buy this through Jyske or most stock brokers.

This fund aims to track the S&P Citigroup BMI China Index, a market capitalization weighted index that defines and measures the investable universe of publicly traded companies domiciled in China.  This is an easy way to hold the equivalent of a broad spread of Chinese shares.

Here is a chart from finance.yahoo.com showing the movement since inception of this ETF.

china-fund

For investors who want to invest in the Chinese yuan but not the Chinese stock market the WisdomTree Dreyfus Chinese Yuan Fund  Investment ETF  is listed on the New York Stock Exchange (symbol: CYB).

This ETF  seeks to earn current income reflecting money market rates in China, as well as provide exposure to the movement of the Chinese Yuan relative to the U.S. Dollar.

For more information US investors can contact Thomas Fischer at Jyske Global Asset Management at fischer@jgam.com

Non US investors contact Rene Mathys at Jyske Bank Private Bank at mathys@jbpb.dk

Investors in China and/or the yuan should exercise caution and recognize that there can be short term volatility.   There are huge amounts of borrowed dollars invested in China and any time there is a wave of fear or profit taking this thinly traded market and the yuan can drop rapidly.  For example in August 2009 18.4%, or nearly 500 billion yuan of the funds in the market were pulled as investors locked in profits on the Chinese stock market.

There had been months of gains, so the sudden pull back was not surprising as doubts about valuations and the sustainability of the economic recovery began to grow with rising prices.   Shanghai’s stock market declined 21.8% in one month.  There can be sudden and sharp pressure any time investors turn cautious.  However after the 21% drop in this market, autumn may be a better time to buy.

There is an Ecuador agricultural opportunity… in the Galapagos.

ecuador-opportunity

Here is an aerial view.

ecuador-opportunity

Stay tuned as I’ll introduce this in an upcoming message.

Gary

The greatest asset of all is the ability to labor at what you love wherever you live. This brings everlasting wealth.

This is why we are providing a special three for one offer with our  course Tangled Web… How to Have an Internet Business

This course can help you create your own internet business.

Our emailed course “Tangled Webs We Weave – How to Have Your Own Web Based Business” is a continuing educational program.  You receive the first 28 lessons when you enroll and a new lesson every week or two.

This course teaches how to create a web based business and is developed from the ongoing experiences that we have from our successful and profitable internet business.

This course is well worth the enrollment fee of $299… but currently you also receive two additional courses FREE.

The other two courses are #1: International Business Made EZ, and #2: Self Fulfilled – How to be a Self Publisher.

These two courses have sold for $398 and thousands have paid this price. We add them to your course, at no added cost, as I believe they will help you develop a better business in these crucial times..

Even Better Get All three Courses Free

To make this offer even more compelling,  I am giving everyone who enrolls in our Ecuador International Business & Investing seminar in November all three courses, “Tangled Web… How to Have an Internet Business Course,”  “Self Fulfilled- How to be a Self Publisher” and “International Business Made EZ” free.

Head south to Ecuador!

ecuador-hotel

Oct. 21-24 Ecuador Import Export Tour

Oct. 25-26 Imbabura Real Estate Tour

ecuador-hotel

In Cotacachi the weather is always Spring like.  Here is the village plaza near our hotel Meson de las Flores.

Join us with Peter Laub of Jyske Global Asset Management in Ecuador. Learn more about global investing, how to have an international business at the seminar.

Nov. 6-8 IBEZ Ecuador Seminar

ecuador-hotel

Let our friendly staff at Meson de las Flores serve you.

Nov. 9-10 Imbabura Real Estate Tour

Nov. 11-14 Ecuador Coastal Real Estate Tour

ecuador-hotel

This shorts weather photo was taken from our beach penthouse in February.

December 6-8 Beyond Logic Shamanic Tour

December 9-10 Imbabura Real Estate Tour

December 11-13 Ecuador Coastal Real Estate Tour

Join us in the mountains and at the sea.  Attend more than one seminar and tour and save even more plus get the three emailed courses free.

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 entire article “Recovery Picks Up in China as U.S. Still Ails” here

Micro Business Security


Your own micro business can increase security.

There is a lot of bad economic news flowing these days.

For example, last week a New York Times headline last week announced:

U.S. Economy Contracted at 3.8% Annual Pace in Fourth Quarter

Though the Commerce Department’s preliminary figure for gross
domestic product in the fourth quarter of 2008 showed the
greatest decline in more than 26 years, economists had
forecast much worse.

A BBC report this week said:

Ford, General Motors (GM) and Chrysler have all reported a sharp fall in US sales in January, as industry-wide American sales fell to a 27-year low.

Sales at Ford plunged 42% last month, compared with a year earlier, while those at GM declined 49%, and Chrysler was hit by a fall of 55%.
But the bad news is not for everyone.  A recent message explained why our business is growing by leaps and bounds almost every month.

There is not bad news everywhere though.  Life is good for small businesses that have adapted and zeroed in on helping during the economic crisis.

A recent message Ecuador Business Passion explained why our web business is growing by leaps and bounds almost every month.

Car sales may be down 50% compared with a year earlier, but our January business is up over 100% compared to last January.  See why at Business Passion.

Web business are perfect during these troubled times. They reduce overheads and allow maximum flexibility to shift with economic trends.

I also also like a web business because they provide freedom to move around.

In the summer I can work and enjoy this view at our North Carolina farm.

business-security

Then in winter when it is miserable and expensive to be in these mountains I can enjoy this sunrise view from our Cotacachi condo and still be in business.

income-security

Or Merri and I can visit our Ecuador Pacific beach condo and wach this sunset while we still work.

income-security

This freedom not only makes life more enjoyable but also reduces the cost of living.

This is why we are sharing a free course on how to create your own website without a webmaster written by Michelle Toole. Here is the 32nd lesson in this course.

Blogging…Another Effective Way to Keep Your Readers Coming Back by Michelle Toole

It is a well known fact that many a time a visitor may visit your site only once, never to return.

So how do you get them to come back?

Good Question.

You have a couple of options, first by publishing a high-value e-zine/newsletter you will encourage return visits and build a trusting relationship between you and your visitors/potential customers. But there is another “communication” approach that is growing in popularity.

It’s called “blogging.”

Basically, blogging means creating a “Web log” or a diary on your Web site, and it is a fast way to share timely information (updates, new developments in your field, trends, etc.), express an opinion, answer a question, or exchange whatever info you want.

How you communicate in your Web log/Blog will depend upon your personality, your time commitments and the tolerance level of your audience. The guiding principle should be simplicity — quick and easy-to-create messages to stay in touch.

Having a web site and a blog combined is one of the best ways to get return visitors while at the same time gaining new visitors.  And as an owner of a theme-based content site, all entries on your designated blog page need to relate to your site’s particular theme. This is a critical criterion to note. You don’t want to risk losing Search Engine relevancy points because your blog page is off target. So, for example, if your Web site focuses on PREselling your accounting service, documenting your passion for orchids will not benefit your page-ranking score — no matter how exhilarating it is for you to share new discoveries!

For a small business owner, a blog is a great way to keep your site fresh and worth revisiting on a regular basis.  But more importantly, it nurtures a feeling of familiarity and reinforces your expertise and knowledge base…

A few final points about blogging…

•    An entry should take as much time as it would to craft an informative e-mail.

•    In the offline world, sometimes people come into a store just to look around, see what’s new and visit with the owner or employees. A blog is an easy way to replicate that relationship-building scenario with your online visitors.

•    Not everyone will be interested in your blog page. But if it makes an impact on even a few visitors, then it’s a worthwhile ROI (Return on Investment). A sale more than compensates for your time effort.

•    Continue to blog as long as it makes sense to you and/or you enjoy it. Use your e-zine to cross-promote what’s new in the blog. And use your blog to cross-promote your e-zine.

Bottom line…..

The growing popularity of “Blogging” emphasizes the importance of updated content on your site. And the fastest and most profitable way to add freshness to your site is by adding regularly to a blog. Of course, long-term, nothing beats creating new pages on your theme based web site.

Look for my future articles where we discuss additional monetization options, search engine optimization, incoming links, additional e-zine techniques, link exchange programs and much more…..

You can check out Michelle’s web site at http://healthy-holistic-living.com. To get more great tips, like the ones above and to see how and what tools she used to create a successful on-line business go to http://sitesell-sbi.com

Until next message may you always find income security.

Gary

How We Can Serve You

How to Have Real Safety

garyheadshot

There are only three reasons why we should invest.  We invest for income.  We invest to resell our investments for more than we had invested.  We invest to make our world a better place.

We should not invest for fun, excitement or to get rich quick, or in a panic due to market corrections.

This is why the core Pi model portfolio (that forms the bulk of my own equity portfolio) consists of 19 shares and this position has not changed in over two years.  During these two years we have been steadily accumulating the same 19 shares and have not traded once.

The portfolio has done well in 2017, up 22.6%, better than the DJI Index.

motif

However one or even two year’s performance is not enough data to create a safe strategy.

The good value portfolio above is based entirely on good value financial information and mathematically based safety programs developed around models that date back 91 and 24 years.

The Pifolio is a theoretical portfolio of MSCI Country Benchmark Index ETFs that cover all the good value markets developed combining my 50 years of investing experience with study of the mathematical market value analysis of Keppler Asset Management and the mathematical trend analysis of Tradestops.com.

In my opinion, Keppler is one of the best market statisticians in the world.  Numerous very large fund managers, such as State Street Global Advisers, use his analysis to manage over $2.5 billion of funds.

The Pifolio analysis begins with Keppler who continually researches international major stock markets and compares 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.  He compares each major stock market’s history.

Fwd: keppler

Michael Kepler CEO Keppler Asset Management.

Michael is a brilliant mathematician.  We have tracked his analysis for over 20 years.   He continually researches international major stock markets and compares 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.  He compares each stock market’s history.  From this, he develops his Good Value Stock Market Strategy and rates each market as a Buy, Neutral or Sell market.  His analysis is rational, mathematical and does not cause worry about short term ups and downs.  Keppler’s strategy is to diversify into an equally weighted portfolio of the MSCI Indices of each BUY market.

This is an easy, simple and effective approach to zeroing in on value because little time, management and guesswork is required.  You are investing in a diversified portfolio of good value indices.

A BUY rating for an index does NOT imply that any stock in that country is an attractive investment, so you do not have to spend hours of research aimed at picking specific shares.  It is not appropriate or enough to instruct a stockbroker to simply select stocks in the BUY rated countries.  Investing in the index is like investing in all the shares in the index.  You save time because all you have to do is invest in the ETF to gain the profit potential of the entire market.

To achieve this goal of diversification the Pifolio consists of Country Index ETFs.

Country Index ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that tracks an index of shares in a specific country.  ETFs do not try to beat the index they represent.  The management is passive and tries to emulate the performance of the index.

A country ETF provides diversification into a basket of equities in the country covered.  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.

Here is the Pifolio I personally use.

70% is diversified into Keppler’s good value (BUY rated) developed markets: Australia, Austria, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore and the United Kingdom.

30% of the Pifolio is invested in Keppler’s good value (BUY rated) emerging markets: Brazil, Chile, China, Colombia, the Czech Republic, South Korea, Malaysia and Taiwan.

The Pifolio consists of iShares ETFs that invested in each of the MSCI indicies of the good value BUY markets.

For example, the iShares MSCI Australia (symbol EWA) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Australia Index which is composed mainly of large cap and small cap stocks traded primarily on the Australian Stock Exchange mainly of companies in consumer staples, financials and materials. This ETF is non-diversified outside of Australia.

iShares is owned by Black Rock, Inc. the world’s largest asset manager with over $4 trillion in assets under management.

Pi uses math to reveal the best value markets then protects its positions using more math created by Richard Smith founder and CEO of Tradestops.com to track each share’s trend.

We use Smith’s  algorithms that calculate momentum of the good value markets.

dr richard smith

The Stock State Indicators at Tradestops.com act as a full life-cycle measure that indicates the health of each stock. They are designed to tell you at a glance exactly where any stock stands relative to Dr. Smith’s proprietary algorithms.

Kepppler’s analysis shows the value of markets.  The SSI signal indicates the current trend of each stock (performing well, or in a period of correction, or stopped out).

The SSI tells you one of five things:

Screen Shot 2017-08-08 at 6.51.59 AM

Screen Shot 2017-08-08 at 6.52.12 AM

Screen Shot 2017-08-08 at 6.52.22 AM

Akey component of the Stock State Indicator (SSI) system is momentum based on the latest 521 days of trading.  A stock changes from red to green in the SSI system only after it has already gone up a healthy amount and has started a solid uptrend.

How SSI Alerts Are Triggered

If the position has already moved more than its Volatility Quotient below a recent high, the SSI Stop Loss will trigger.  This is an indicator that the position has corrected more than what is normal for this stock.  It means to take caution.

Below is an example of how SSIs work.  This example shows the Developed Market Pifolio that we track at Tradestops.com.

tradestops

Equal Weight Good Value Developed Market Pifolio.

At the time this example was copied, all the ETFs in the Developed Market Pifolio (above) currently had a green SSI.

We do not know when the US market will fall.  We only do know that it will.  We also do not know if, when the US market corrects, global markets will follow or rise instead.

The fact that the Pifilios are invested in good value markets reduces long term risk.

Additional protection is added by using trailing stops based on the 521 day momentum of each stock in the Pifolio.

Take for example the graph below from our Tradestops account that shows the iShares MSCI United Kingdom ETF.  This ETF had a green SSI and a Volatility Index (VQ) of 13.26%.  This means the share can move 13.26% before there is a trend shift.

tradestops

iShares MSCI United Kingdom ETF (Symbol EWU)

Pi purchased the share at$31.26 and in this example the share was $34.43 and rising.  Tradestop’s algorithms suggested that if the price drops to $31.69 its momentum would have stopped and it would have shifted into trading sideways.   The stop loss price is currently $29.86.  If EWU continues to rise, both the yellow warning and the stop loss price will rise as well.

When the US stock market bull ends, know one knows for sure how long or how severe the correction will be.

When the bear arrives, what will happen to global and especially good value markets?

No  one knows the answer to this question.

What we do know is that the equally weighted, good value market Pifolios have the greatest potential long term and that math based trailing stops can be used to protect against a secular global stock market correction when it comes.

My fifty years of global investing experience helps take advantage of numerous long term cycles that are part of the universal math that affects all investments.

What you get when you subscribe to Pi.

You immediately receive a 120 page basic training course that teaches the Pi Strategy.   You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

You also begin receiving regular emailed Pifiolio updates and online access to all the Pifolio updates of the last two years.  Each update examines the current activity in a Pifolio, how it is changing, why and how the changes might help your investing or not.

Included in the basic training is an additional 120 page PDF value analysis of 46 stock markets (23 developed markets and 23 emerging stock markets).  This analysis looks at the price to book, price to earnings, average yield and much more.

You also receive two special reports.

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!

30 years ago, the US 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 in this special offer, you receive the report, “Three Currency Patterns for 50% Profits or More” FREE when you subscribe to Pi.

Plus get the $39.95 report “The Platinum Dip 2018” free.

With investors watching global stock markets bounce up and down, many missed two really important profit generating events over the last two years.  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, compared to a ratio of 230 only two years before.

In September 2015, I prepared a special report “Silver Dip 2015” about a silver speculation, leveraged with a British pound loan, that could increase the returns in a safe portfolio by as much as eight times.  The tactics described in that report generated 62.48% profit in just nine months.

I have updated this report and added how to use the Dip Strategy with platinum.   The “Platinum Dip 2018” report shares the latest in a series of long term lessons gained through 40 years of speculating and investing in precious metals.  I released the 2015 report, when the gold silver ratio slipped to 80.  The ratio has corrected and that profit has been taken and now a new precious metals dip has emerged.

I have prepared a new special report “Platinum Dip 2018” about a leveraged speculation that can increase the returns in a safe portfolio by as much as eight times.

You also 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 this special offer.

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.

In 2018 I celebrate my 52nd anniversary in the investing business and 50th 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.

The chart above shows the war – stock market cycle.  Military struggles (like the Civil War, WWI, WWII and the Cold War: WW III) 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.

The online seminar also reveals  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 this test.

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, but online the seminar is $297.

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

Save $468.90 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 2017” and our latest $297 online seminar for a total savings of $468.90.

ecuador-seminar

Triple Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report, access to all the updates of the past two years, the two reports and the 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, easy diversified 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 two 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 Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, the “Platinum Dip 2018” and “Three Currency Patterns For 50% Profits or More” reports, and value investment seminar, plus begin receiving regular Pifolio updates throughout the year.

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

Gary

Bear Rally Tactics


The salvation for this bear market may be near.   See below how bear rally tactics can help you profit in the current economic downturn.

History suggests that we will not see a lasting bull until 2012…but one more bear market rally may provide an escape hatch for those who are caught with too many depressed shares. These tactics begin by understanding where the US economy and equity markets are in relation to thirty year cycles that seem to dominate the flow of mankind’s industrial productivity.

These cycles are not economic cycles.  They are cycles of human interaction, technology and productivity that drive the economy and hence the stock market. These cycles are intricately connected with new waves of productivity that grow from some great human platform of combat.  Struggles for survival in the Civil War, WWI, WWII and the Cold War (WWIII) super charged inventiveness that created new forms of productivity…the steam engine, the internal combustion engine,  production line processes, jet engines, TV, farming techniques, plastics, telephone, computer and internet, etc.

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

Each boom led to excess.

Each excess led to a correction…and viola here we are…in a correction again…at the correct time!   This 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.

This correction like its predecessors has enjoyed a number of bear market rallies. You can see this quite clearly, in the graph below, how each upward cycle rises after a war (postwar boom) and how the market then crashes before the next upcoming war.

We have been viewing this process via this chart at our site since it began and we can observe how the last bear market recovery ended around December 2007 in this update from yahoo.finance on Wednesday December 3, 2008. dow charts

The yahoo chart looks a little different because it is not dollar adjusted, but we can see a bear market pattern, beginning in 1998, similar to one that began in the 1920s and ran though the 1930s into the 1940s.

We see another bear from the mid 1960s that ran through through the 1970s in the early 1980s. The last bull market began in 1982 so it is significant when we see newspaper headlines like USA Today’s December 3, 2008 headline, Auto Sales Fall to 1982 Level. If car sales…stock market levels and economic signs are at their lowest level since the early 1980s, history suggests that the end of the current correction is heading our way….but not quite here yet.

This is why the portion of the Dow graph from 1920 to 1940 is of special interest to me. I see that the sharp 1929 contraction was too sharp. The real correct correction took place from 1929 to 1942 with a strong, last bear market rally from 1932 through 1936.

graph

Everything about this 30 year theory suggests that the bear market will not end until about 2012…and we need a serious human struggle and new technology before we see the next boom. Yet this same theory also suggests one last bear rally which may be a savior for baby boomers who would like to see their pensions and savings recover a bit before they retire.

The current bear trend began in 1998.  The 2005 to 2007 bear market rally led many investors astray. We are now in a late 1920s style market slide.

This has all been pretty predictable…which is why beginning August 2007 this site began recommending a reduction in equities and debt.

In September 2007, this site listed four important facts that affect most investors:

#1: They care too much about day to day volatility.

#2: They care too little about strategy.

#3: The short term process of buying and selling takes too much time.

#4: This short term process leaves too little time to analyze and forecast. We added seven suggestion then about of what to do when there is a market crisis.

#1: Turn on the auto pilot and normally add to your position.

#2: Do not panic.

#3: Do not let feelings influence you too much.

#4: Add some restructuring stories to your portfolio.

#5: Know that a period of high returns will be followed by a period of low returns…and vice versa.

#6: Do not underexpose yourself for the long term.

#7: Risk is your friend or alibi for expecting higher returns. Take risk in good value!

The market outlook at this site then (Sept 2007) was:

#1: Expect moderately higher stock markets at the end of 2007.

#2: Earnings growth will slow further.

#3: Watch out for core inflation and GDP growth. Dramatically lower growth with high inflation is the signal to watch for.

This could create a recession, the worst enemy for equities. We have that recession now. Hopefully you have been following these ideas.  If so, you have been hurt less than most and now we should be thinking hard about a reentry into markets. There are some stunning values developing especially if we engage three bear market rally tactics now.

Bear Market Rally Tactic #1: Realize that some blue chip equities in old industries may see some sharp immediate gains…but are not the wave of the future. If you hold such shares…when they recover…take your profit if the shares begin to be sold at an unreasonable value.

For example, General Motors was a Blue Chip that spiked in the late 1970s bear market rally.  The internal combustion engine was a productivity technology that came out of WWI.  Selling GM in the $40 range in the late 70s was the smartest thing a person could have done. From then forward, if you take the dollar’s fall and inflation into account, these shares have been a bad value and poor investment.

gm-share-chart

The Blue Chips that could peak in this rally are WWII era firms..plastics…telecommunications…TV…computer (not internet)…fertilizers and such.

Dump them if you get a decent price.

Boomers especially will want to use such timing.  If you have to sell shares to for liquidity, sell these Blue Chips in old industries that are not likely to have a bright future ever again.

Boomers, hold your new era investments that have a bold future and can still rise a lot to provide your income later when you are in your 80s and 90s and 100s!

Bear Market Rally Tactic #2:  Watch for the next war or struggle and the technology that will emerge. The nature of the battle will have an impact on what technology might emerge. Last year I thought that the war could be in Iran. See why at  WWIV

There are other options. For example a December 2, 2008 CNN article said:

Terrorists are likely to use a weapon of mass destruction somewhere in the world in the next five years, a blue-ribbon panel assembled by Congress has concluded. They are more likely to use a biological weapon than a nuclear one — and the results could be devastating, the chairman of the commission told CNN. “The consequences of a biological attack are almost beyond comprehension. It would be 9/11 times 10 or a hundred in terms of the number of people who would be killed,” former Sen. Bob Graham said. He cited the flu virus that killed millions of people in 1918 as an example. “Today it is still in the laboratory, but if it should get out and into the hands of scientists who knew how to use it for a violent purpose, we could have multiple times the 40 million people who were killed 100 years ago,” he said. Graham warned that such measures would be costly, but were necessary. “The leadership of this country and the world will have to decide how much of a priority … they place on avoiding the worst weapons in the world getting in the hands of the worst people in the world,” he said. “It is not going to be cheap. It is not going to be accomplished without some sacrifices. It won’t be accomplished without putting this issue ahead of some other competing national and international goals. But I think our safety and security depend upon doing so,” he added. It cited testimony before the commission from former Sen. Sam Nunn, who said that the “risk of a nuclear weapon being used today is growing, not receding.” The report recommends a range of measures, including increased security and awareness at biological research labs and strengthening international treaties against the spread of biological and nuclear weapons. “Many biological pathogens and nuclear materials around the world are poorly secured — and thus vulnerable to theft by those who would put these materials to harmful use, or would sell them on the black market to potential terrorists,” the report warned. The commission expressed particular concern about the nuclear programs of Iran and North Korea, and about Pakistan, which it described as “the intersection of nuclear weapons and terrorism. While observing that Pakistan is a U.S. ally, the report said, “the next terrorist attack against the United States is likely to originate from within the Federally Administered Tribal Areas” in Pakistan. The tribal areas lie in northwest Pakistan where the government exerts little control; the United States says it is a haven for militants from both Pakistan and neighboring Afghanistan. Congress created the commission to investigate and report on WMD and terrorism in line with a recommendation from the 9/11 Commission, which compiled a report on the September 11, 2001, terrorist attacks on the United States. Commissioners heard testimony from more than 250 experts from around the world over the course of their six-month investigation.

This is what it takes…a struggle where all concepts of return on investment go out the window….a no holds barred struggle that must be won. This type of endeavor breaks molds…urges thinking outside the box and changes the way humanity thinks, lives, works and interacts.

The struggle could be against global warming. This would be good, man against his bad lifestyle habits instead of man versus man. What will that struggle and new technology be?

None of us know for sure since we are all afflicted with that human failing of only being able to see the immediate future and (pretty badly) the past.

Yet being aware and watching for both (the struggle and technology) increases the odds of spotting them early and helping you venture into the next winners…that are the ones that can really grow over the next 10…20 and 30 years.

Bear Market Rally Tactic #3: Treat new era investments as high risk venture investments. Buy a little of several hoping to catch the winner.

In the last era for example, as mentioned, computers were the deal…so perhaps you invested a bit in shares of Data General…one of the first minicomputer firms from the late 1960s that due to a series of missteps in the 1980s, including missing the advance of microcomputers led to its decline and demise.

Plus maybe you invested in a bit of Sperry Univac…still in business as UNISYS CORP but only trading at .47 cents a share. Plus perhaps you purchased a bit of  Commodore Business Machines (big in the 80s…bankrupt in the 90s).

And you rounded your diversification by investing in a small company formed by two guys who were writing a program for Ed Robertson and his Altair computer (a first personal computer…in a kit).  Roberts said he would buy the program if he could see it running on the Altair but the programmers didn’t actually have the programs written.  They immediately set out to write them. It took about six weeks and worked.  Those programmers founded a small company in Albuquerque and later moved to the Seattle area.  Their names… Bill Gates and Paul Allen. The company…Microsoft.  Ahhh.

You may have chosen three losers out of four…but the name of the game in venture investing is the huge run up you get when you select a winner. Hold your winners and sell your losers.

We are in an era that we as investors have never seen before.  I began global investing in 1968 and this is the worst correction in those 41 years. This means we have greater opportunity for finding good value then we have had for four decades.

Use the seven suggestions above for investing in a market crisis….especially, take risk in good value!  Watch for the bear market rally and use the three bear market rally tactics to take this risk as YOU START LOOKING FOR VALUE NOW.

Gary

You can get regular quotes on multi currency shares that could do well in a bear market rally from Jyske Bank and Jyske Global Asset Management.

For more details on this, US investors should contact Thomas Fischer at fischer@jgam.com

Non US investors Rene Mathys at mathys@jbpb.dk

Join us at a course in Cotacachi or on Ecuador’s coast this winter.

Take a hike with me in the warm Cotacachi winter’s sun.

cotacachi-sun

See how to attend two or three connected courses for great savings.

Stroll the sunny Ecuador beach this winter.

Ecuador beach

Jan. 16-21 Ecuador Spanish Course

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Join us for great fresh Ecuador seafood!

Cotacachi-fish

Feb. 9-11 Beyond Logic

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See Ecuador’s incredible scenery.

Cotacachi-fish

March 8-9 Imbabura Real Estate Tour

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Share some time with Ecuador’s friendly people.

San Clemente-fishermen

Better still join us all year! See how to attend our 27 courses, tours, mingos and expeditions in 2009 FREE.

Multi Currency Strategy USA


A multi currency strategy in the USA is important because the US dollar is so linked to the rest of the world.

This week we are looking at the strategic multi currency economic outlook developed by Jyske Bank’s Strategy and Research Team to get a better grasp on multi currency equity values as they develop.

Equity investors should always look for value because market timing does not work. The chart below convinced me of this fact many years ago that trying to decide when the market is going to rise or fall is not much better than playing roulette where the odds of winning are about 36 to 1.
multi-currency-ibbotson-chart

This chart reflects a 1993 study by Ibbotson and shows how from 1926 to 1993 (804 months) equities dramatically appreciated more than treasury bills. Yet if you deducted the best 30 months of equity appreciation in that 804 months the equities performed worse than treasury bills.

All the extra growth above low treasury bill rates over 67 years was earned in just 30 months. That gives us about a 1 in 27 chance of “guessing” correctly. I say “guess” because after 40 years of being involved in equity markets, I have learned that there is always something we do not know!

Plus I would be willing to bet that most of those months that had extraordinary growth came right after a period when shares performed badly…the time when investors least expected this growth.

Equity markets rarely shout, “hey I have been bad. Now I am going to catch up.”

Value investors however catch this growth, in a way accidentally, in the process of searching for value.

So if we can guess what direction the economy is headed we can better understand value. If we better understand equity values, we are more likely to be invested during times of extraordinary growth.

Value investors will tend to buy more when markets are weak and sell more when markets are overheated. This makes it more likely for them to catch the big moves (and take advantage of them).

Here is the Jyske Bank Strategy and Research Team’s analysis of the US economy in the months ahead.

“We now expect that US economic growth will begin to increase at about the turn of the year instead of in the autumn as expected before. In the meantime, there are prospects of recession. It seems that, over the coming months, inflation will be a smaller problem due to falling commodity prices (energy and food). Falling inflation and rising unemployment will pave the way for a couple of interest-rate cuts on the part of the Fed.

The expected upswing has been postponed due to a mix of rising mortgage rates, higher energy and food prices, continuing strong financial turmoil and the fact that consumers have utilized a larger proportion of the tax cuts than expected. In Q2, GDP growth was quite solid, due to stronger personal spending, among other things, than we originally expected. It seems that the consumers have spent a larger proportion of the tax cuts than expected, but since July no more tax cheques have been issued and that will affect personal spending in H2.

Generally, the consumers are still facing stormy weather even though the storm has weakened a bit. The headwinds are in the form of falling employment, rising unemployment, lower housing prices, an increasing number facing payment problems and problems obtaining bank loans. The consumers have been severely affected by considerably increases in energy and food prices, yet as these prices have fallen, the pressure has weakened a bit. The nervousness on the part of the consumers is reflected in steeply falling car sales over the past couple of months.

It seems that, over the coming months, inflation will be a smaller problem due to falling commodity prices (energy and food). Falling inflation and rising unemployment will pave the way for a couple of interest-rate cuts on the part of the Fed.

Mortgage rates have increased since the beginning of the year in the wake of the turmoil in the mortgage-credit market. Together with continuing strong tightening of the banks’ credit conditions vis-à-vis home owners in particular, this will put a damper on the demand for houses and thus delay the expected stabilisation in residential construction till Q4 2008.

On the whole, we expect that H2 growth will be negative and that the cyclical development will bottom out in Q4 and increase in the course of 2009. The biggest risk facing the economy is still the development of house prices and the ensuing losses in the banking sector.

The decline in commodity prices for energy and food will result in falling inflation rates over the coming months. Core inflation will also come under pressure due to a slowdown in wage increases, weak demand in H2 and reasonable productivity growth.

Weak growth over the remainder of the year will add further to the unemployment. We expect that the unemployment rate will rise from the current 5.7% to 6% at the end of 2008, while also for some time into 2009 there is a risk of rising unemployment.

The mix of falling inflation and rising unemployment will add to the pressure on the Fed to lower its interest rate and we expect interest-rate cuts of 0.25 percentage point in Q4 2008 and in Q1 2009.

A weak economy is likely to improve equity values and create bargains. We look at specific recommendations in our Multi Currency Portfolio Course.

Tomorrow’s message looks at the Euro Block Economy

Until then good global investing.

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

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

multi-currency-meeting-in-autumn