Tag Archive | "Economic development"

Observations for Extra Profit


The current times of extraordinary change create the need for new mindsets that create extra profit.

Several observations have led me to start some Bio Wash agri tests that could lead to a new niche of profitability.

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See why these agri tests might replace some of my investments in emerging markets.

One of the biggest trends that supported Merri’s and my business and our investments has been the rise of emerging markets for over 40 years.  The roots of the business (and investments) began in Hong Kong in 1968 just as it and emerging stock markets were beginning to emerge.   This put me on that correct niche.

Over the next 40 years Hong Kong and what had been called the “Third World” became the “Fastest Growing World”.

No more.  European markets today offer better value and prospects for growth than emerging markets as a whole.

A June 12, 2012 BBC News article shows that this could get even worse. Here is an excerpt (Bolds are mine).    World Bank: Developing nations face weak growth.  The crisis in eurozone has had a big impact on stock markets in emerging economies in Asia.

Developing nations should brace themselves for weak growth and “tougher times”, the World Bank has warned.  It said that there may be “a long period of volatility in the global economy” as the eurozone debt crisis escalates.

The bank forecast that developing economies will grow by 5.3% this year, down from 6.1% in 2011.  It urged policymakers to take adequate long-term measures to ensure that they can sustain growth.

“Developing countries should focus on productivity-enhancing reforms and infrastructure investment instead of reacting to day-to-day changes in the international environment,” said Hans Timmer, director of development prospects at the World Bank.

This leaves emerging markets vulnerable and leaves Merri and me asking… “What should we do now?”

What we have to do… what we ALL have to do is take the same steps emerging markets need to take… ” focus on productivity-enhancing reforms and infrastructure investment instead of reacting to day-to-day changes”.

We need completely new creative mind-sets to figure out “what’s next”.  Linear thinking is a death knell for creativity.

Fortunately it is a lot easier for us as individuals to take new productivity steps than entire nations.  Here is a new mindset in agriculture and natural health based on several observations that may create opportunities for you.

I am testing some ideas explained below:

Observation #1: If emerging markets slow down, prices in two sectors are almost sure to rise… manufactured goods and food.

In the last 50 years or so emerging markets took over manufacturing and offered cheap labor.  They moved farmers who were dependent on the land into factories.  The USA took over a lot of the world’s food production… became the breadbasket of the world and became the biggest exporter of food.

If emerging market factories slow down, governments will have to kick in (to stop revolutions) and support the unemployed.  When these poor governments increase support for their unemployed, they become less efficient.  National productivity drops.  Prices rise.  Operating a factory in an emerging market will cost more.   These emerging nations will produce less.  The former farmers who are now former factory workers could become welfare recipients needing to be fed.

These factory workers will not return to farming.  Their land has sold. They have lost their skills and tasted a different life.

Thus emerging nations will need the same amount (or more) of food, but will have less in the form of manufactured goods to trade for it.  This means the price of food will rise.

Observation #2: Over the past several decades, emotional values have grown into the business process so they are often as important as economic value.

Consumers today base their buying decisions on private internal values that are a main theme in their buying process.

For example many businesses learned it is a good investment to give part of their profits to some type of charity.  Some businesses have become their values, such as the ice cream company, Ben & Jerry’s. (Of course that was the Ben & Jerry’s of the past…not necessarily the B&J of today.)

Part of business now is to expresses a value through the way they do business.

Starbucks for example offers the concepts of fair trade, organic and green for their coffee.  Maybe this is because they believe this is good for the world or maybe they believe consumers will buy more coffee from them.

Whatever their reasoning, this shows how values have become of increasing importance and how consumers have increasingly followed their feelings as well as their pocket books.

These corporate values have, in the past, often became the difference between success and failure.

When the global economic slowdown hit, US consumers began to cut non essentials from their shopping lists but continued to open their wallets for natural and organic products that they believe are healthier and are good for the planet.  Organic sales have held up despite the economic slow down.

Here is where some opportunity may come in.

The branding of health products has become so diluted that phrases like “All Natural” and “Organic” are becoming meaningless.  Big business has so distort the reality of the words that no longer convey enough trust  in order to demand higher prices when offered by big business.

Plus there has been a big expansion of ALL NATURAL inventory.  If these factors and inflation push organic products beyond the masses, a niche  may expand for small agricultural businesses.

This niche may create a demand for “hybrid” products that offer healthier values than standard brands but are not called organic and cost less than organic.

For example some products using Bio Wash have become “pesticide free” and/or “reduced fertilized”.

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I believe enough in these observations to start some testing in our orange grove.   Recently my grandson, Garren, and I loaded up the Cub Cadet with flagging ribbon… went out into our orange grove and set up four test zones… each at an opposite extreme from one another.

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Garren helping me set up our tests.

In each zone we selected sick, healthy and new trees.

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A sick tree in our grove flagged yellow.

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A healthy tree and…

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new orange trees.

We flagged half with yellow ribbon which will be sprayed regularly with Bio Wash Soil Amendment. The other half was sprayed flagged green and they will get equal spraying with Bio Wash 100.

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Watch carefully for opportunities in this sector.

Our assistant, Derek Hylands, is keeping track of growth and the amount of spraying done.  We are reporting results to our grove manager as well as Ted Tidwell who manufactures Bio Wash.

Our goal is to produce bigger… healthier oranges in a process that requires less fertilizer and little or no pesticides.

I feel the goal makes sense because numerous forces in the market place include:

#1: Aging population.

#2: Terrible national health due to awful national nutritional habits.

#3: Rising non natural food prices.

#4: Monoculture farming being hit by the law of diminishing returns.

#5: Rising energy costs reducing the effectiveness of early harvesting and long range distribution.

All these forces stimulate opportunity for natural, local, organic goods exactly as big business destroys the image of the arena.

Big business and organic ideals do not mesh well.  This is a niche where small businesses like ours may reap better profits.

What is growing fast here in North Carolina is our Saturday Farmer’s Market.

Merri and I make it early 8 a.m. every Saturday market to buy the best there is.  We delight in seeing our friends there and buying all sorts of heirloom vegetables and plants. We have seen this market triple in size and continue to be packed!  But of course,  up here in the High Country this market can’t be open all year.

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Jeanne and here husband have the Berry Patch farm and we have been delighted to watch them expand.

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Ann Rose has gone totally organic.

Often when we have weekend seminars up here, on Saturday evening we drive the group to Lansing and look at how small businesses can profit.   There we visit the organic New River Winery for a wine tasting. The winery is housed in an old WPA building which originally was the Lansing School.

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Here is Haskell McGuire one of the New River founders showing us the winery.

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New River’s flagship wines are organic Bohemia Red and Bohemia White. These were followed by the introduction of signature wines, Back Porch Blueberry.  New River now has several new wines in production including:  Pinot Blanc,  Hellbender Red, Lansing School White, Big Laurel Blush, and Seyval.

The winery started small and is growing by leaps and bounds. Vineyards and wineries are one of the fastest growing business sectors in North Carolina.

One of the features about living in Ecuador are the produce markets and access to the grower of one’s food.

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Good food, like this fruit at the Cotacachi, Ecuador farmers’ market are one factor why so many expats like living in Ecuador.

If my thinking about healthy food and big business, the wrong footedness of big business will benefit everything from small, big businesses, like Whole Foods to seed companies, live poultry wholesalers, fish hatcheries, gardening tool makers and small agricultural plots as well as natural health products.

Gary

Ecuador Agricultural Expedition

Ecuador Agricultural Property Expedition by Jean Marie Butterlin.

May 14-15-16, 2012

Sept 17-18-19, 2012

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See Ecuador agricultural property by four wheel drive.

Merri’s and my first property purchase many years ago was agricultural land… over 900 acres… formerly in sugar cane, citrus, pineapples and avocados… the top soil deep and rich.

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Here is a photo of Merri feeding one of our horses.  We still have that hacienda land, Rosaspamba, (the place of the roses).

Plus we have added more agricultural land… and are looking to add more.

An excerpt from a recent message entitled Beating & Benefiting From the Economic Crash explains why: In the seven years before its peak in July 2006, the US home-price index surged 155 percent. Since then, it’s fallen 33 percent.

This creates a huge opportunity. Economic history since before WWI suggests that we’ll see the final crunch of this 15 year bear in 2011 and perhaps 2012.  Then the light at the end of the tunnel will appear… slowly at first but picking up a head of steam aiming for the next bubble of something like 2030.

The way to beat this crunch is to set your affairs so you do not lose during the next crunch and have liquidity to take advantage of the low prices and high value the crunch could bring.

There are numbers of reasonably safe pockets of opportunity.  For example inflation during these difficult economic times has helped profits on agricultural property.

Excerpts from a May 31, 2011 article “Farm boom missing Main Street” by By John Gaps III, of The Des Moines Register show what I mean:  GUTHRIE CENTER, Iowa – Fifteen miles northeast of here, a quarter of a square-mile of farmland sold for $1.3 million this spring.

Farmers can lock in about $6.73 a bushel on the Chicago Mercantile Exchange for corn they will deliver to market in December, nearly twice the price a year ago.

The sustained surge in corn prices has driven the average value of an acre of Iowa farmland to $5,708, according to a March survey by the Realtors Land Institute. That’s up 19.7% from the previous six months and up from $1,865 in March 2001, according to the Institute’s Troy Louwagie. The land northeast of Guthrie Center— where fields are flat and the soil is black — sold for $8,600 per acre, according to the county assessor.

“The rural economy is very good right now despite signs of a peaking commodities market and concerns about drought creeping north from Texas, flooding along the Mississippi River, and rain-delayed corn planting in Illinois, Indiana and Ohio. American farmers who grow everything from rice to sugar beets have enjoyed a year of historically high prices, said Don Roose, a trader at U.S. Commodities in West Des Moines.

It’s not just towns surrounded by crop farming that have declined amid high commodity prices.

In heavily forested west central Alabama, the town of York has suffered as the timber industry has consolidated, said Auburn sociology professor Conner Bailey, president-elect of the Rural Sociological Association.

That’s despite steadily climbing timber prices since the middle of 2009 on the Chicago Mercantile Exchange.

This is why in the last several years I have been writing about and adding agricultural real estate to my portfolio.

There are few places with as much agricultural potential and diversity as Ecuador. It is not surprising that many readers ask us about Ecuador farmland or agricultural property there.

Our first reply to anyone asking is… agricultural land is hard to find and get it!   Finding our hacienda took us well over a year of dedicated search.  Searching for good farmland is not like viewing a batch of properties in a town or village.  First, it often takes hours just to get to the land.  Secondly, it almost always takes hours inspecting the land.  You do not do quick walk throughs on  100 or more hectares.  One is lucky to be able to see one property a day unless you can be really very organized.

Then once you find something that looks good… the hard part begins.  Of course there is always the price!

Then there is the research.  One seemingly great property we looked at “had great water rights”  we were told.  “Then why does it have cisterns all over the place?”  we asked ourselves.  A deep check of the deeds and talking with neighbors unveiled the fact that what’s on paper does not always match precedent and reality.  There were water rights on paper, yes, but they were disputed by numerous neighbors who had for years continually cut the water lines every time the current owner installed them.  It was just pure luck that we were suspicious and turned down this property, which still has not sold.

Buying agricultural property is not like buying urban property from a title point of view.  There are no rural land registers, so deeds have to be carefully researched by an attorney.

Finally if you buy it… what’s next?   Who do you hire. What do you grow… who buys the crops?

Yet because there has been such interest, I challenged Jean Marie Butterlin to create an Ecuador Agricultural tour.   He has been working hard at this for over 6 months, and I am proud to announce that he has set up an excellent program for those who are really interested in farming in Ecuador.

Here is what Jean Marie has explained about the Ecuador real estate tours he has created and conducted.

When I was 40 years old and told my friends that I would retire at 50, they were laughing.  They are not laughing anymore!

My name is Jean Marie Butterlin and I live on one of the nicest, most affordable coasts of all South America with my wife Pascale and although I consider myself retired, I still like to work… but only at what I really like.

How did I achieve that ?

I had a plan.

Part of that plan was to move to a nice area where it was less expensive to live and much less stressful than Europe.   I found that place after traveling and inspecting most South American countries.  We chose Ecuador and more specifically Bahia as our home.

We live now as well on $2,000 a month in Bahia than we did in Europe on $10,000 a month.

When you are planning to retire and live the good life, you should look at both parts of the equation, expenses and what you can earn.I have been able to lower my expenses considerably by living in Bahia.  We live in front of the Malecon enjoying the sun 320 days per year.

But the key to retirement is really in the INCOME part of the equation.   How can you generate income without working too hard?

The answer is to have an “outside the box”  plan.  If you do what everybody else does, chances are you’ll earn what everyone else does.

A lot of younger clients on our real estate tours ask  “How can  I generate a little income in Ecuador”?  They say they would move down immediately if they could. This started me thinking  about how to show a few select clients a chance to be part of that world of retirees in Ecuador who work only at what they like.

I have put together a special plan for those seeking to move and earn in Ecuador now!

Here is the plan and here are the facts:

* Every economist is currently saying that agriculture will be the next place to invest because :

  • God is not making more arable land.
  • The world is running out of food.  China has been buying and leasing arable land all over Africa and in South America for example.  A lot of the smart money is going into arable all over the continent.

* Ecuador has some of the cheapest yet best agricultural land in all of South America.  The climate is best for growing as well with 365 days a year of direct sunlight.  In many parts of Ecuador, farmers can get 3 and even 4 harvests per year, depending on the water available on the property.

* However, most Ecuadorian farmers have not yet learned how to produce and manage a farm. They are lacking higher education and management skills as well as equipment.  Some Ecuador farmers still plow with oxen.

*  Many Ecuadorian farmers do not know how to sell and do not treat the farm as a real business.

There is a great opportunity that lies in this combination of cheap, arable land, the geographical place of Ecuador on the equator and lack of good agronomical skills.

Here is the chance to attend the first agri business expedition, planned for October 17, 18 and 19.

This is a tour for those who want to have an active agricultural business in Ecuador and have $100,000 minimum to invest.

This tour will be conducted over three long, jam packed days to provide you a low cost efficient way to inspect Ecuador agricultural property that is legitimately for sale at a reasonable price.

Day 1 – 9 am to 6 pm: Detailed presentations by agri engineers and specialists of several type of agri businesses. These presentations  include costs, types of soils for each type of crop, risk analysis, potential profits, timing, where to find the buyers of crops,  introduction to buyers  looking for specific crops.

On the tour we look “outside the box” at crops that can for example produce “biofuel”. We’ll look at land where one company in Manta will buy every available crop at market price.   We know the owners of that company and you will be introduced to them.

Day 2: Visits farms for sale.  Here is one farm we inspected on our first tour.  This agri property has 203 hectares (507 acres) divided into:

28 hectares (70 cares) of balsa trees.  In 5 years these will fetch $30,000 a hectare.

30 hectares (75 acres) of African palm trees in production (the nuts fetch $250 per ton).

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– 140 hectares (350 acres) of pasture sufficient for 200 head of cattle or other crops that can produce an excellent return.

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– 3 small

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and one large river along the property with water availability.

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– Close to the main road

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– $6600/hectare ($2,640 an acre) asking including a small casita for caretakers.

Day 3: Q&A’s with the agri specialists…with round table discussions. We break into small groups to discuss in more details each business its costs and potential profits.

We have inspected and investigated all properties prior paying special attention to three special issues:

* water on site
* access roads
* good port close

We only show land that has water in Manabi province near Manta the second largest port in Ecuador.

We have investigated electricity, pricing and title plus will have speakers during breakfast and dinners who will discuss these  issues and the legal matters pertaining to agri businesses in Ecuador.

These experts will be available for consulting during the tour and later… covering technical matters on which crops are best suited for each soil and what times of the year are best for planting and harvest.  The tour pays special attention to reviewing the marketing aspect of each crop and where to find buyers.

We use our contacts with local people were born in the area… who know the land owners… who know what the “market” price should be and we do not show farmland where the seller is asking an unrealistic price or if there are any doubts about ownership or clear title.

We also provide administration, accounting and legal consultants who will answer questions about owning and running a company in Ecuador, a civil code country and very different from the US and Canada which run on common law.

Included in the tour fee:

*  Agri engineers who can help you start your business, provide services and the follow up.

* Legal experts in incorporation, administration accounting etc..

* Experts in marketing agricultural crops.

Although we do not advise being absentee owner, we can provide all the services needed to run the business with our agricultural team.

If your agricultural knowledge is limited, we have the experts who will help you through the learning curve.

The big Question is “How much can someone make in agri business in Ecuador?”

The Answer:  We will not show any businesses that do not produce on a regular basis at least 10% net return. Many agri businesses you will see can pay off land costs within 1 to 2 years.

The Agri Business Expedition fee is $1,990/single $2,990 couple.

For efficiency and logistics, this tour is strictly limited to 16 people… 4 persons per four wheel drive vehicle.

Jean Marie

Ecuador has many Agricultural Advantages and we have been recommending the idea of investing in Ecuador agriculture for years.

Here is an excerpt from an April 10, 2007 message  at this site entitled “Ecuador Agriculture”: Ecuador agriculture can offer a better lifestyle and opportunity as good prices rise. Sometimes we forget the importance of life’s basics…such as food. Until those basics cost more.

Ecuador agriculture is important because Yesterday’s Wall Street Journal included an article that began: “Prices of farm goods are climbing – in part because of demand for crop-based fuels – pushing up food prices around the world and creating a new source of inflationary pressure. The rise in food prices is already causing distress among consumers in some parts of the world — especially relatively poor nations like India and China. If the trend gathers momentum, it could contribute to slower global growth by forcing consumers to spend less on other items or spurring central banks to fight inflation by raising interest rates.”

This is one of the wonderful benefits of Ecuador agriculture, the extreme supply of excellent but low cost food.

Ecuador is a Garden of Eden and here is a fact you probably did not know. The inhabitants of this region developed more than half the agricultural products that the world eats today. Among these are more than many varieties of corn and potato. These foods also include squash, beans, peppers, peanuts, popcorn, yucca and quinoa.

They even learned to use freezing night temperatures and warm days to freeze dry potatoes and create potato flour.

At the market, three blocks from our hotel where we shop.  Open air restaurants in the front of the market offer excellent meals, vegetarian, or chicken, steak, fish or pork for about $1.

There are numbers of  fresh picked vegetables offered by happy friendly people.

And every type of fruit you can imagine, from pineapple to coconut, papaya, mango, apples, pears, bananas, berries and numerous other tropical fruits all at bargains prices by Western standards and ripe all year round.

Many exotic spices at a 1/20th the cost in the US or Canada. This makes life especially wonderful and inexpensive.

This creates opportunity as well.

Ecuador’s geographical location gives it a distinct advantage in agricultural production. Its exports include asparagus, bananas, broccoli, cocoa, coffee, flowers, hearts of palm, lentils, papaya, passion fruit, pineapple, plantain, mango, red beans, and tomatoes. Ecuador has mainly an agricultural economy, though oil is its largest source of revenue, and industry has expanded. Agriculture employs 32 percent of the workforce. 6.4 million acres is used in agriculture. Permanent pasture covers 17 percent of the total area and forests nearly 43 percent. In the highlands subsistence agriculture and the production of staples for the urban areas are predominant (corn, wheat, barley, potatoes, pulses, and various vegetables). In the coastal lowlands tropical crops are grown to export. Ecuador is the largest exporter of bananas in the world and among the largest exporters of shrimp and roses.

Merri and I have been recommending Ecuador for almost 15 years…we have been recommending investing in agricultural property for even longer. Agricultural property in Ecuador makes excellent sense for those who like both ideas.  We are very pleased that Jean Marie has created this excellent tour.  We are happy to share this opportunity with you.

Gary

Tour price includes local transportation to the farms but does not include domestic airfare from Quito to Manta and lodging.  Meals are NOT included.

The Agri Business Expedition fee is $1,990/single $2,990 couple.

For efficiency and logistics this tour is strictly limited to 16 people… 4 persons per four wheel drive vehicle.

Who Will Benefit From This Tour

Attendees on this tour will range from those who want their own sustainable organic farm like Neverlands Farm in Loja to those who want a small agricultural property to enhance existing income… to those who want to run medium and larger agri businesses.

Small – Organic  – Sustainable

Neverland Organic Farms is a great case study of people creating an isolated sustainable organic farm

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See about the organic farm here

Income Supplement – Beautiful Way of Life

A good case study for those looking for a way of life and income supplement is this  six acre organic tomato farm that delegates on on a real estate tour visited.   This shows a perfect little Ecuador retirement operation, so where should we start?

I think it is with the guinea pigs…

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The farm has many of them in these cages.

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Clover on the farm feeds them.  Their manure helps organically fertilize the corn.

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The corn husks are mixed with manure to be used as fertilizer and the corn feeds the…

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pigeons…

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chickens and…

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pigs.

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All of these animals create more organic fertilizer that this farmer uses to grow tomatoes.

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Here is the Ecuador organic farmer with our driver Jorge, Alberto Verdezoto and Peggy Carper.

Tomatoes grow quickly here it seems.  These newly planted organic tomatoes will be ready in three weeks. I find this hard to believe but this is what the farmer said.  Though my Spanish has been known to miss on occasion.

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These will look like…

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this and…

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provide

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income that…

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would provide a nice retirement income… $25,000 a year we are told.

Other benefits include farm fresh eggs.

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Trout are in the ponds next to the pigeon coops.

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A good case study for a specific and large Ecuador agri operation is the farming operation set up by Young Living Essential oils.

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

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

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there own processing and a health spa.

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

Included in the price is all transportation from the hotel to the farms.  Airfares to, from and within Ecuador, hotels and meals are NOT included.

The Agri Business Expedition fee is $1,990/single $2,990 couple.

For efficiency and logistics this tour is strictly limited to 16 people… 4 persons per four wheel drive vehicle.

Learn about the Ecuador Farm Management Program here.

Read  “Organic food sales grow despite economy”

BBC News: World Bank: Developing nations face weak growth

Terror as Life Moves in Cycles


Many investment markets are moved by terror because life moves in cycles. Everything is built on a simple ternary principle of… creation…  stability and transformation. Some call it birth, life and death.  Let’s think about how this can create terror and what it can mean to our wealth… health and happiness.

First, a reminder…  there are only four days left to order Christmas Roses from Ecuador.

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Order fresh Ecuador Christmas roses here.

Consider  the following socio-economic cycle. The industrial complex we call the USA, Western Europe and Japan… brought along by the Marshall and North Korean War were in the creative stage from the 1940s through 1970s.

After World War II the United States and Canada were the only major industrial bases that had not been destroyed. They had expanded rapidly during the war and by 1947 had retooled to produce consumer goods, stimulated by a boom in consumer spending.

Exports had been a small factor in the American economy. The rebuilding of the Marshall Plan changed that as Europeans rebuilt with manufactured goods and raw materials from the United States.

Japan was pulled along as well, when in 1950 the Korean War turned Japan into the main staging area for the United Nations.  The Korean War brought Japan even more money than the Marshall Plan sent to any country in Europe.

In the 1970s this entire socio economic union began shifting into the maintenance phase.

The chart below from an Economist article “Chinese Takeovers, Being Eaten by the Dragon” shows the Foreign Direct Investment as a percent of the global economy.  For example in 1914 Britain was the largest empire ever controlling 1/4th of all nations in the world and 45% of the world’s FDI.

The Economist article explains when it says:  Control of the world’s stock of foreign direct investment (FDI), which includes takeovers and companies’ greenfield investments, tends to reflect a country’s economic muscle. Britain owned 45% of the world’s FDI in 1914; America’s share peaked at 50% in 1967. Today China, including Hong Kong and Macau, has a share of just 6%.

We should not be surprised that the USA is losing market share of FDI and losing it faster than previous empires.  This shift appears by almost any measure as part of our universal pattern and in perfect harmony.

So we should not be upset as these areas now move onto transformation.

Yet markets fear change and the simultaneous shift of the US, Western Europe and Japan economies to this new (and what can be a very positive) phase create terror in investment markets.

Terror creates errors.  Errors create distortions. Distortions create opportunity.

The video below shares some thoughts about how to embrace change and gain opportunity from these cycles.

In this 13-minute video, there is a discussion on how life naturally moves in cycles and how we can stay in balance and benefit from these natural cycles of change. You may expand the video to full-screen by clicking the double-arrow to the bottom right of the video screen.

Gary

We have added a new date for Super Thinking + Spanish.  Learn Spanish in four days this January 13 to 16.

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Sunrise at our house outside Mt. Dora.

We are limiting the numbers keeping this one small so we can conduct it at our house as this will be the first seminar in which we add our teacher training.  See details here.

International Financial Market Thinking


Here is some international financial thinking that shows strength in the idea of emerging market investing from the Chief Economist and Chief Editor at Bank Credit Analyst, Mr. Martin Barnes.

Join Merri and me in Copenhagen. We’ll learn more about emerging markets but also love strolling along Copenhagen’s famous pedestrian shopping street called Stroget. Stroget is not a name of a specific street, but a connection between the west and east part of Copenhagen. The shops are amazing… but the street entertainment even better!  Every summer that we are there we search through the fruit and flower markets on the streets for THE perfect fig…buy one each, find a great seat, sit down and slowly eat it while watching the crowds walk by!

Jyske Global Asset Management sent me this international financial thought from Martin Barnes a well known and highly respected economist frequently quoted in international financial news medias. Many of the JGAM investing managers have been reading Mr. Barnes’ writings for many years.

Bank Credit Analyst Research (BCA) was founded in Montreal in 1949 by A. Hamilton Bolton, who pioneered the concept that national economies and their capital markets are led by shifts in financial liquidity, money supply and credit.

BCA though expensive (their annual fees can run $60,000) has a wide following among financial institutions, corporations, individual investors and academics.  BCA along with Morgan Stanley and Jyske Bank are important sources of data for JGAM.

BCA has dramatically expanded the firm’s research capabilities and global coverage by building a large team of experienced economists and researchers and its operations are worldwide with offices in many major cities around the globe.

Here is an excerpt from JGAM’s summary of Mr. Barnes’ views on economics and financial markets: The economic recovery is developing slowly as normal after a recession caused by a financial crisis. Fiscal policy is being tightened but not to an extent that will endanger recovery. There is a strong case for investment spending as return on capital is high, whereas consumer spending will continue to be moderate because of high unemployment, squeezed house prices and a general need for saving (i.e. deleveraging).

The recent fall in equity prices is a correction and not a new bear market, provided that a new (and unlikely) recession is not underway.

Bond yields are historically low and could stay low for a long period as there is no private credit demand, no inflation, short rates are close to zero and not rising and risk aversion keep investors away from risky assets (e.g. stocks).

Emerging markets are in a better structural position compared to developed debt burdened and aging countries, therefore, expect the new economies to outperform the old world in the long run. Growth in emerging markets will cause a demand pull on commodity prices, especially the demand-supply balance on oil seems vulnerable. Commodities could become the next asset bubble but it will take time to evolve. At JGAM we agree to many of these findings.

During the week the leading world economies have been warming up and positioning themselves to the G20 meeting this weekend.

China is off the hook after it has abandoned the US dollar peg and instead re-introduced a crawling peg. This was foreseen and a clever move by the Chinese as the focus is now back on the US and Europe who disagree on how early and how much to tighten fiscal policy.

Because of the crisis in the eurozone caused by debt problems (not only in Greece), especially Germany has been keen on promoting and restoring fiscal discipline. This has caused concern, especially in the US, that economic recovery could be in danger.  A fall in US housing sales has only aggravated the concern. An inevitable consequence of the fiscal thrift is that central banks will be reluctant to raise interest rates for a foreseeable time.

This quote from the German minister of finance, Wolfgang Schäuble, illustrates the clash on fiscal policy across the Atlantic: “While US policymakers like to focus on short-term corrective measures, we take the longer view and are, therefore, more preoccupied with the implications of excessive deficits and the dangers of high inflation.” (Financial Times, 24 June 2010).

See an important point on emerging markets that I especially agree with Martin about below.

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Merri and I hike the harbor every day when we are in Copenhagen.  We love…

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the sights, the…

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cafes and…

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open air and…

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waterfront dining.  Summer is the best time to visit Copenhagen.

Peter Berezin, Managing Editor of Bank Credit Analyst Researech (BCA) will be one of the speakers at the August Jyske Bnak’s Global Wealth Management Seminar, August 25 to 29, 2010 in Copenhagen.

I love attending these Jyske seminars not just as a speaker but because I get to hear all the other speakers, whom I consider world class.

This year speakers include will be Bjorn Lomborg known as the “Skeptical Environmentalist.”  See more on Lomborg here.

Another speaker will be Jeff Rubin. Rubin was the Chief Economist for CIBC, a North American investment bank for 20 years. See more about Rubin here.

Kenneth Rogoff  the Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University and former Chief Economist for the International Monetary Fund is also a speaker. See more at Rogoff.

Another speaker is Daniel Brehon, the foreign exchange strategist, for Deutsche Bank AG.  See more about Daniel Brehon and Deutche Bank here.

The strong US dollar makes this the year to enjoy Europe and Thomas Fischer at Jyske just sent me this note: Gary due to the increasing US dollar, the cost for our August seminar in Copenhagen for Americans has dropped from about $2,050 to $1,700, a 15% discount. (THE COST INCLUDES MOST OF THE FOOD, TRIPS, MAKING THE CONFERENCE A GREAT BARGAIN.)

Some great things about the Copenhagen conference are the seminar of course…then there’s the stunning food and the wonderful visits included…This package includes:  accommodation at the Copenhagen Marriott Hotel for four nights, (25-28 August) including breakfast,  Reception and dinner at the bank’s Copenhagen offices, seminar fee and materials for the seminar sessions on Thursday, Friday and Saturday. full lunches on Thursday, Friday and Saturday, canal & harbour tour on Friday in the late afternoon, four-course gala dinner with entertainment and dancing on Saturday evening, and a Sunday excursion including lunch.

Merri and I always go on the excursion also to Silkebord with a drive out into the country, lovely food, picnic cruise and a chance to see the main office and the trading center.  This is always our most interesting, favorite and delightful conference…and we hope you will join us there!  We love the stroll along the harbor, the fresh air, wonderful meals and interesting people from all over the world.

See details on how to join Merri and me at Jyske’s bi annual Copenhagen seminar here Global Wealth Management Seminar.

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We also really enjoy the restaurants and coffee shops along Nyhavn.

Important point about emerging markets

One of Martin’s comments was: Emerging markets are in a better structural position compared to developed debt burdened and aging countries, therefore, expect the new economies to outperform the old world in the long run.

At our June Quantum Wealth course we looked at seven places to invest now.

#1: Multi Currency Spread Increase Cash
#2: Value Markets
#3: Emerging Markets
#4: Wellness
#5: Water Alternate Energy
#6: Truth & Cohesion
#7: Real Estate

A recent 10 year comparison of major versus emerging markets show some of the reasons that emerging markets are one of the seven places I like to invest in now.

A comparison of the Morgan Stanley Capital index Emerging Market versus Morgan Stanley Capital Index Emerging Market Index.

Annual Return   Emerging Markets 19.81%    Major Markets  10%

Emerging Markets Longest Down period 6 months – Major Markets Longest Down 6 mos.

Emerging markets biggest downward drop 55% – Major markets biggest downward drop  53%.

Emerging Markets PE ratio 12.9   Major Markets  PE Ratio 15.2.

Major markets yield    3.70%.
Emerging markets yield  3.22%.

In other words in a decade… emerging markets have appreciated nearly twice as much as major markets.  There has been little difference in the lengths or size of drops and emerging markets offer much better PE ratios.  The only area where major markets have excelled is yield.

The current best value emerging markets (according to Keppler Asset Mangement) are There are nine top value (“buy”) emerging markets: Brazil, the Czech Republic, Egypt, Hungary, Poland, Russia, Taiwan, Thailand and Turkey.

See Keppler’s current emerging maret analysis here.

When you think globally… consider emerging markets. They have the image of being riskier… but when you look at the facts… they have outperformed major markets for years and are in a position to continue doing so for some time to come.

Gary

If you are a chocoholic as I am, don’t miss the really important reason to visit Copenhagen… the bakeries and cafes…. like Konditori La Glace!

Konditori La Glace is the oldest (and perhaps) the best confectionary in Denmark.  This cafe began 8 October 1870, and  has served sweet teeth like mine for six generations.  It is an experience just to visit the beautiful old rooms located in Skoubogade 3.   You can eat these confections on location take it back to your hotel or in a chocolate emergency they deliver.

Gary

How We Can Serve You

How to Have Real Safety

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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.

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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.

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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:

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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.

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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.

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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.

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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.

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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