We used many approaches to process information about how markets and economies might move.
We viewed currencies at the technical level and saw that Jyske Global Asset Management (JGAM) had closed their British pound recommendation.
This is the fine detailed view… the technical end of investing, Peter Laub of JGAM showed how JGAM had recommended investing in pounds at 1.3750 with a stop loss at 1.3700. Peter explained how the pound dropped to 1.3703 before rising to 1.4500. JGAM took profit on the backslide to 1.4300.
We looked at economic fundamentals and discussed the February 10, 2009 New York Times article “Bailout Plan: $2.5 Trillion and a Strong U.S. Hand” by Edmund Andrews and Stephen Labaton which said:
WASHINGTON — The White House plan to rescue the nation’s financial system, announced on Tuesday by Timothy F. Geithner, the Treasury secretary, is far bigger than anyone predicted and envisions a far greater government role in markets and banks than at any time since the 1930s.
Administration officials committed to flood the financial system with as much as $2.5 trillion — $350 billion of that coming from the bailout fund and the rest from private investors and the Federal Reserve, making use of its ability to print money.
We compared the inflationary impact of this bailout with the deflationary impact of a 20% contraction in the $14 trillion economy. This looks like a wash that could bring an economic balance at the cost of the US dollar’s parity to other currencies.
We viewed how seasonality was at work. Over 30 years the Dow has frown 8.16% overall but all of that growth and more (8.36% per annum average) have come in in the months of November through April. The average annual growth per annum over thirty years in May to October is only 0.37%. In other words… history suggests that every day we move closer to May, the chances of a stock market correction in 2009 diminish.
We viewed the economic cycle and saw that we are reaching the phase of the economic cycle when we should be coming out of cash and bonds and into shares as:
* Interest rates are down.
* There is a rush for liquidity.
* Employment is growing.
* Uncertainty is high.
We looked at the fact that we have plenty of time… no hurry. We can wait and see. We have time to choose and pick… the best bargains and values.
We even looked at how the planets and full moon affect investors. There is a historic link in the general trend of world affairs and the the cycles of Jupiter and Saturn. History suggests that when these planets are in a good phase it is been auspicious for the world and vice verse.
The cycles of these planets are about 12 years and 30 years which ties into the market cycles we track.
The chart below shows the historical relationship.
We viewed this chart from a Maharishi Vedic Astrology prediction by Siebelt Meyera in February 1997.
The chart is a bit hard to see here so here is what it reads in the troughs:
1914 Start of WW I
1939 Start f WWII
1962 Cuban Crisis
1973 Yom Kippur War
1997 Economic meltdown in Asia
Since 1991, the cycle has been in their downward trends and reached its lowest in 1997 when Jupiter was debilitated, and in 1998 when Saturn will be debilitated. From 1999 onwards the value will slowly and reach a peak value again between 2012 and 2015. This suggests a slow recovery over the next three years.
All of this confirmed that we should not expect a quick recovery and reconfirmed our recommendation to do nothing now. Maintain a defensive position and wait for opportunity to present itself.
We reviewed my personal portfolio to see how I am doing this.
Liquid Portfolio Allocation
Cash 23%
Bonds 61%
Shares 16%
Liquid Portfolio Currency Allocation
Brazilian real 4%
Denmark kroner 33%
euro 31%
British pound 10%
Turkey Lira 8%
US$ 14%
Total Asset Allocation
Cash 21%
Shares 2%
Emerging Shares .5%
Bonds 17.5%
Emerging Bonds 8%
Ecuador Real Estate 9%
US Agricultural Land 12%
Residential Property 10%
Commercial Property 20%
My Cash Currency Breakdown
USD 14%
GBP 4%
Norwegian kroner 1%
Swedish kroner 1%
Other 1%
My Shares
Bank of Florida .5%
Jyske Bank .5%
Turkey Equity Fund .5%
European Equity Fund 1%
My Bonds
Swedish Bond Fund 2%
Euro Bond Fund 4.5%
Danish Bond Fund 7%
ELF Aquitain EUR 4.500% 23.03.2009 1.5%
Caisse D‚Amort Dette EUR 12.07.2009 1.5%
Rabobank NL CAD 4.250% 2009 1%
My Emerging Bonds
Hungary Gvt. HUF 6.250%12.08.2009 1%
Hungary Gvt. HUF 6.750%12.02.2013 1%
Emerging Market Bond fund 2.5%
European Investment BK TRY Bond 1.5%
Brazil BRL 12.500% 05.01.2016 1%
China EUR 1%
My US Real Estate
US Agricultural Land 12%
Residential Property 10%
Commercial Property 21%
My Ecuador Real Estate
Ecuador Andean residential 2%
Ecuador Coastal 5%
Ecuador Agricultural 2%
We also looked at the importance of investing in things we like.
We reviewed real estate investments in Cotacachi and on the Ecuador beach.
Delegates met Ecuador condo owners Bob & Barbara Humphrey. Here is Bob & Barbara at the Ecuador beach.
Bob & Barbara live in Telluride Colorado in the summer. Bob has retired from his diving business… flies his own plane and races cars (Shelby Cobra). Barbara is a Feng Shui expert who lectures globally on this subject.
Like many of our readers Bob & Barbara have a condo both in Cotacachi and on the beach at Vistaazul Beach Condos.
We packed incredible amounts of information into three days but had fun as well.
There was plenty of time for delegates to talk and share what they learned. Here are several delegates talking, US, Australian and Canadian.
Plus JGAM hosted a Valentine’s Day wine & cheese reception on Saturday night.
Andean musicians performed.
There was Andean music… a Conga line began.
Andean dancers entertained.
There is an excellent organic vineyard and Swiss cheese factory near Cotacachi. They are both for sale (the properties) and we are viewing them on today’s real estate tour. For the party we just enjoyed the products, three excellent Swiss cheeses…
plus excellent wines.
The photographers in the group were having fun.
The youngest delegate was a bit bewildered.
Here is the key advice from that course. Hold off. Wait. Do Not hurry. opportunities abound but we have plenty of time to pick them up. There could be another drop in May before a gradual recovery. Invest with care… but invest with passion. Do things fulfilling as well as profitable. Enjoy the process as well as the end results.
Regards
Gary
Join us in Cotacachi and on Ecuador Coast in March.
Merri, our webmaster and I have created a new course on how to build a web business with a webmaster. Here is a special offer on this new course.
You can enroll in this special course for $299. However if you sign up for our three courses in March 2009, I will send it to you free. You save $299.
March 8-9 Imbabura Real Estate Tour
March 10-15 Ecuador Import Export Expedition
March 16-19 Ecuador Coastal Real Estate Tour
Bob Shane will be at our March courses and will be available to provide health balancing.
Get our web based course FREE if you join us in Ecuador this February or March.
Attend any two Ecuador courses or tours in a calendar month…$949 for one. $1,349 for two
Attend any three Ecuador courses or tours in a calendar month…$1,199 for one. $1,799 for two
Future 2009 courses
May 29-31 JGAM Global Asset Strategy Seminar
June 12-14 Shamanic Mingo Tour
June 16-17 Imbabura Real Estate Tour
June 18-21 Ecuador Coastal Real Estate Tour
July 3-6 Ecuador Import Export Expedition
July 8-9 Imbabura Real Estate Tour
July 10-13 Ecuador Coastal Real Estate Tour
July 24-26 IBEZ North Carolina
Sept. 17-21 Ecuador Spanish Course
Sept. 23-24 Imbabura Real Estate Tour
Sept. 25-28 Ecuador Coastal Real Estate Tour
Oct. 9-11 IBEZ North Carolina
Oct. 21-24 Ecuador Import Export Expedition
Nov. 6-8 IBEZ Ecuador
Nov. 9-10 Imbabura Real Estate Tour
Nov. 11-14 Ecuador Coastal Real Estate Tour
