Tag Archive | "food prices"

Frightening Inflation


Here is a frightening thought about inflation. 

A recent article about inflation in Japan deserves some time for reflection.

The article said:  “It’s one thing if luxury items are expensive, but if cheap things aren’t cheap anymore, it’s a real problem.”

Inflation has not come much to the forefront in the last few years.  Rising costs have been low, except for the cheap things like food, beans and rice, vegetables and fruit… nuts.

Now underlying inflation in the United States has increased more than expected as rents and medical costs maintain an upward trend.  The core Consumer Price Index rose 2.3 percent in the 12 months through February 2016.  This was the highest increase in almost five years.  In 2016 food and other costs (such as new and used cars and trucks) rose even faster.   However inflation seemed low because there was a 13 percent drop in gasoline prices, which offset both the increase in core C.P.I. and food prices.

This is an inflation danger, short term volatility in commodities such as oil can obscure rising long term prices  in other essentials that were previously not worth worrying about, such as food.

This has to leave us to wonder. “It’s one thing if luxury items are expensive, but if cheap things aren’t cheap anymore, it’s a real problem.”

Gary

Investing Beyond the Boom

Warren Buffet once warned against the Cinderella effect.

He said “Don’t be fooled by that Cinderella feeling you get from great returns.  Nothing sedates rationality like large doses of effortless money.  After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball.  They know the party must end but nevertheless hate to miss a single minute of what is one helluva party.  Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.”

Cinderella may have lost a shoe when she fled the party to meet a midnight curfew.  We can lose much more when we rush from a crashing stock market.

Most investors face emotional dangers that build in rising markets.

Almost everyone feels good.

But the he clock of economic reckoning is ticking.

No wants to see it.  Nothing rises forever and especially… not everything at the same time.

Yet no one wants to leave the party until the end.

But many edge closer to the door.

When the clock chimes there could be a stampede even though leaving in a hurry may be the worst way to go.

Here are seven steps that can help avoid this risk.

  • Choose investments based on markets instead of shares.
  • Diversify based on value.
  • Rely on financial information rather than economic news.
  • Keep investing simple.
  • Keep investing costs low.
  • Trade as little as possible.
  • Make the decision process during panics automatic.

One strategy is to invest in country ETFs that easily provide diversified, risk-controlled investments in countries with stock markets of good value.  These ETFs provide an easy, simple and effective approach to zeroing in on value.  Little management and less guesswork is required.  The expense ratios for most ETFs are lower than those of the average mutual funds.  Plus a single country ETF provides diversification equal to investing in dozens, even hundreds of shares.

A minimum of knowledge, time, management or guesswork are required.

The importance of…

easy…

transparent…

and inexpensive. 

Keeping investing simple is one of the most valuable, but least looked at, ways to avoid disaster.  Simple and easy investing saves time.  How much is your time worth?  Simple investing costs less and avoids fast decisions during stressful times in complex situations where we are most likely to get it wrong.

Fear, regret and greed are an investor’s chief problem.  Human nature causes  investors to sell winners too soon, and hold losers too long.

Easy to use, low cost, mathematically based habits and routines help protect against negative emotions and impulse investing.

Take control of your investing.  Make decisions based on data and discipline, not gut feelings.  The Purposeful investing Course (Pi) teaches math based, low cost ways to diversify in good value markets and in ETFs  that cover these markets.  This course is 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.

Enjoy Repeated Wealth With Pi

Pi’s mission is to make it easy for anyone to have a strategy and tactics that continually maintain safety and turn market turmoil into extra profit.

One secret is to invest with a purpose beyond the immediate returns.  This helps create faith in a strategy that adds stickiness to the plan.

Another tactic is to invest with enough staying power so you’re never caught short.

Never have to sell depressed assets during periods of loss.

Lessons from Pi are based on the creation and management of Model Portfolios, called Pifolios.

The success of Pifolios is based on ignoring economic news (often created by someone with vested interests) and using financial math that reveals deeper economic truths.

One Pifolio covers all the good value developed markets.  Another covers the emerging good value markets.

The Pifolio analysis begins with a continual research of 46 major stock markets that compares their value based on:

#1:  Current book to price

#2:  Cash flow to price

#3:  Earnings to price

#4:  Average dividend yield

#5:  Return on equity

#6:  Cash flow return.

#7:  Market history

This is a complete and continual study of almost all the developed major and emerging stock markets.

This mathematical analysis forms the basis of a Good Value Stock Market Strategy.   The analysis is rational, mathematical and does not worry about short term ups and downs.

This strategy is easy for anyone to follow and use.  Pi reveals the best value markets and provides contacts to managers and analysts and Country Index ETFs so almost anyone can create and follow their own strategy.

The course examines and regularly reports on the hows and whys of seven professionally managed portfolios so we can learn how managers find and invest in good value.  The Pifolios are:

  • Keppler Good Value Developed and Emerging Market Pifolios
  • State Street Global Advantage Emerging & Developed Market Pifolios
  • Gold & Silver Dip Pifolio
  • ENR Advisory Extra Pifolio
  • Tradestops.com Trailing Stops Pifiolio

tradestops

As you can see in this image (click to enlarge) the top performing Pifolio we are tracking is the State Street Global Advantage Pifolio was up 43.15%.  Here is the breakdown of that current Pifolio.

pifolio

Learn how to invest like a pro from the inside out.

State Street is one of the largest fund managers in the world and their Global Advantage funds invest in good value shares in good value markets.

In the updates we review each portfolio, what has been purchased and sold, why, the ramifications for high risk, medium risk and low risk investors.

At the beginning of 2018 my personal Pifolio is based on select ETFs in the Keppler Developed and Emerging markets.  My Pifolio is invested in Country ETFs that cover seven developed and three emerging markets:

Norway
Australia
Hong Kong
Germany
Japan
Singapore
United Kingdom
Taiwan
South Korea
China

Don’t give up profit to gain ease and safety!

This portfolio has outperformed the US market (S&P 500) in 2017 as the chart below shows.

My portfolio blue.  S&P 500… green.

Screen Shot 2018-06-04 at 7.39.15 AM

Regardless of economic news, these markets represent good value and have been chosen based on four pillars of valuation.

  • Absolute Valuation
  • Relative Valuation
  • Current versus Historic Valuation
  • Current Relative versus Relative Historic Valuation

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 Silver 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 Silver Dip Strategy with platinum.   The “Silver Dip 2017” 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 “Silver 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.

This year I celebrated my 50th anniversary 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 2018” 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 “Silver 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.

Your subscription will be charged $299 a year from now, but you can cancel at any time.

Gary

 

 

 

 

 

How to Survive Selective Inflation


The worst kinds of inflation are unreasonable rises in the costs of basics such as  food, shelter and medicine.   There are times when due to income, inequality or legal inefficiency, inflation becomes a form of extortion.  Take the case of shelter, various anti discrimination laws are used to stop landlords from abusing their power to provide  shelter (such as asking for sex to reduce or forego rent), but the practice is all too common.

We don’t have to look far to see legal extortion in medicine.  There has been an outrage about the rise in the price of a decades-old drug called Daraprim.   A new company, Turing Pharmaceuticals, bought the drug and promptly increased the price from $13.50 per tablet to $750 per tablet — a 5,000 percent jump!  However this new company is just following the example of Valeant Pharmaceutical which has a business model of buying existing drugs and raising prices aggressively, rather than trying to develop new drugs.  In essence these companies are extorting (currently in a legal way) unreasonable profits with the threat, “Pay up or die”.

Valeant Drug Prices

This image from the New York Times article on rising drug prices (1) shows how in 2015 alone, Valeant raised prices on its brand-name drugs an average of 66 percent.

Selective inflation is likely to apply to the even more basic item-food.  Here is why I think selective inflation could hurt hundreds of millions of people, especially those on a fixed income.

I recently researched inflation beyond the Consumer Price Index for my report, “The Silver Dip 2015”.   What I found is that since 1942 US median income increased 29 times.  House prices rose from 1942 until 2015 47 times. The cost of cars jumped 36 times.  Gold is up 33 times its value in 1942.  Silver rose 38 times in the same period.

This means that gold and silver were reasonable hedges against some forms of inflation.  Had you stored a pile of the precious metals away in 1942 to buy a car  or house today, you could do it.   This is true of going to a movie, up 33 times or renting an apartment.  Apartment rentals are up 34 times.

The metals have done even better when it comes to eating.  The price of bread has risen 21 times.  Sugar is up 10 times. Hamburger about 13 times.  Coffee  11 times.  Eggs 13 times increase.  Milk 16 times.

Ideally this means that food companies have been good about not gouging consumers.  Regretfully in the face of growing income inequity, failing corporate ethics and rising food prices we might be a bit cynical and not count on this.  The more likely fact is that food processors will see the lag as an excuse to let food prices catch up.

Last May the Labor Department indicated that Americans should be prepared for food prices to remain relatively high.

Meats have seen the steepest rise in price along with dairy products.

Rising food prices can continue to a be a source of stress worldwide as internationally traded food prices rose by a steep 4.0%. Corn and wheat, in particular, contributed to the rise.  The commodities each increased 12% and 18% worldwide this year through the middle of the year despite record grain harvests.

Living standards will suffer as more is spent on grocery store bills, leaving less for discretionary spending.

According to an article at cheatsheets.com (2) The World Bank says that already high food prices have become “the new normal,” and writes that, in less developed nations, families cope with rising prices by “pulling their children out of school and eating cheaper less nutritious food, which can have severe life-long effects… one-third of all child deaths globally are attributed to under-nutrition.”

There are numerous reasons for the increasing cost of food, climate change, drought, increased demand, rising labor costs and worker shortages all which create price pressure.

The largest price pressure comes from industry consolidation.  As processors and packagers merge, reduced competition creates higher food prices.

The best way to overcome selective inequality inflation such as rising food prices is to make sure your income and savings rise faster than prices.

The price comparisons in my research show that gold has outperformed nine of 14 inflation standards reviewed.  Silver outperformed 12 of the standards.  This suggests that gold and silver have done pretty well in maintaining value as real money.

However, this comparison also suggests that gold and silver are not necessarily badly undervalued either.  Beware of claims of $2,000 or $5,000 an ounce gold!  The price of gold and silver are likely to continue rising and falling along their medians.  If the conclusions of the inflation comparison are correct, any time silver drops much below $14, it is perhaps under valued. Gold below $1,150 is also likely a good deal.

This suggests that the price of silver and gold may not rise as fast as the price of medicine or food.  This is why I have written two reports, one on value investing in currency patterns,  “Three Currency Patterns For 50% Profits or More” and on how to use leverage with silver, “Silver Dip 2015“.

Integrating equity and currency value investing with leverage and precious metals can increase profits to help us stay abreast of selective inequality inflation.

Gary

Gain From the Volatility of the Next Four Years

However America’s politics turn out, one thing is sure.  There will be volatility in stock markets during the next four years.

The first reason markets will bounce has nothing to do with politics or policies.   The market’s downward shift is simply due regardless of the party or the person in office.

Second the new politics will create an uncertain era. Everyone is shaken whether they are pleased with the election or not and nothing frightens markets like uncertainty.

Third we’ll see rising interest rates over the next 48 months. This will push markets down.

Despite these pitfalls, there is a way to profit using the downtrends  to pick up good value shares.

During nearly five decades of global investing I have noticed found that good value strategies increase through bull markets and bear, through good presidents and bad.  The steps to take are simple.

The first tactic is to seek safety before profit.

We can look at Warren Buffett’s investing strategy as an example.  Buffett success is talked about a lot, but rarely does anyone explain how he make so much money.  That was the fact until some researchers really stripped his operation bare.  They looked at everything and learned the deepest of Buffett’s wealth management secrets.  Fortunately they published all in a research paper at Yale University’s website. that reveals important truths about extending wealth.

This research shows that the stocks Buffett 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).

The second tactic is to maintain staying power.  At times Buffet’s portfolio 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 outperformance 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.

The Buffett strategy integrates time and value for safety and profit.

A third tactic is using limited leveraging, tactic in the strategy boosts profit.  Buffett leverages his portfolio at a ratio of approximately 1.6 to 1.   The Yale published research paper shows the leveraging methods used by Warren Buffett to amass his $50 billion fortune.  The researchers found that the returns from Buffett’s investment company, Berkshire Hathaway, far outweighed those achieved by any rival that has operated for 30 years or more.  The research shows that neither luck nor magic are involved.  Instead, the paper shows that Buffet’s success hinges on using leverage at the rate of 1.6.

To sum up the strategy, Buffet uses limited leverage to invest in large purchases of “cheap, safe, quality stocks”.   He limits leverage so he can hold on for very long periods of time, surviving rough periods where others might have been forced into a fire sale or a career shift.

Stated in another way buffet uses logic (buy good value) to have the conviction, wherewithal, and skill to invest with leverage over many decades.

What do we do when we are not Warren Buffett?

May I introduce the Purposeful Investing Course (Pi) for those who want to invest like Warren Buffet, but know they are not.  This course is based on my 50 (almost) years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

Enjoy Extending Wealth

Pi’s mission is to make it easy for anyone to create a three point strategy, like Buffett’s even though they do not have a lot of time for or knowledge about investing.

Pi reveals investing secrets and the sciences that make investing easy, safer, less time consuming and increases the chances of profit.

One secret is to invest with a purpose beyond the cash.  One tactic as mentioned is staying power.  This means not being caught short and having to sell during a period of loss.  This also means having enough faith in a strategy that we stick to the plan.  When we invest with purpose, doing what we love, we enjoy the process more and are more likely to hold on during down times, when most poor investors panic and sell.

Slow, Worry Free, Good Value Investing

Stress, worry and fear are three of an investor’s worst enemies.  They create the Behavior Gap, a trait exhibited by most investors, that causes them to underperform any market sector they choose.  The behavior gap is created by natural human responses to fear.   Pi helps create profitable strategies that avoid losses from this gap.

Spanning the Behavior Gap

Behavior gaps are among the biggest reasons why so many investors fail.  Human evolution makes fear the second most powerful motivator.  (Greed is the third.)  Fear creates investment losses due to behavior gaps.  Fear motivates us more strongly than desire.  By nature investors are risk adverse.

Winning investors though embrace risk because they have a plan based on good value.

Purpose is the most powerful motivator,  stronger than fear and greed, so a strategy with purpose is the most powerful of all.

Combine your needs and capabilities with good value secrets and the math to back up your value selections through the Pifolio – The Pi Model Portfolio

Lessons from Pi are based on the creation and management of a Primary Pi Model Portfolio, called the Pifolio.  There are no secrets about this portfolio except that it ignores the stories (often created by someone with vested interests) and is based entirely on good math.

The Pifolio is a theoretical portfolio of MSCI Country Benchmark Index ETFs that cover all the good value markets using my (almost) 50 years of global experience and my study of the analysis of four mathematical investing geniuses (and friends).

The Pifolio analysis begins with a continual research of international major stock markets that compares their value based on:

#1:  Current book to price

#2: Cash flow to price

#3: Earnings to price

#4: Average dividend yield

#5: Return on equity

#6: Cash flow return.

#7: Market history

We follow this research of a brilliant mathematician and have tracked this analysis for over 20 years.    This is a complete and continual study of international major and emerging stock markets.

This analysis forms the basis of a Good Value Stock Market Strategy.   The analysis is rational, mathematical and does not worry about short term ups and downs.   This strategy is easy for anyone to follow and use.  Pi reveals the best value markets and provides contacts to managers and analysts and Country Index ETFs so almost anyone can create and follow their own strategy.

A country ETF provides diversification and cost efficiency by spreading one simple, even small investment into a basket of equities in a good value stock market.  The costs are low and this type of ETF is one of the hardest for institutions to cheat.  Expense ratios for most ETFs are lower than those of the average mutual fund.

Little knowledge, time, management or guesswork are required.  The investment is simply a diversified portfolio of good value indices.  Investments in an index are like investments in all the shares of a good value market.

Pi matches this mathematical certainty with my fifty years of experience. This opens insights to numerous long term cycles that most investors miss because they have not been investing long enough to see them.

For example 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!  There are currently ten good value (non US) developed markets,  plus 10 good value emerging markets.

Pi shows how to easily create a diversified, worry free portfolio in some of these good value markets using Country Index ETFs.

The current strength of the US dollar is a second remarkable similarity to 30 years ago.   The 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.  There is so much more to write and 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 you’ll receive the report “Three Currency Patterns For 50% Profits or More” FREE when you subscribe to Pi.

Leverage

Pi also explains when leverage provides extra potential without undo risk.  For example in 1986 I issued a report called “The Silver Dip” that showed how to borrow 12,000 British pounds (at almost 1.6 to 1 dollars per pound the loan created US$18,600) and use the loan to buy 3835 ounces of silver at around US$4.85 an ounce.

Silver had crashed, I mean really crashed from $48 per ounce.  As prices decreased from early 1983 into 1986, total supply had fallen to 449.7 million ounces in 1986.  Mine production was restricted by the low prices at this time, with silver reaching a low for this period of $4.85 in May 1986.  Secondary recovery also was constricted by these low prices.

Then silver’s price skyrocketed to over $11 an ounce within a year.  The $18,600 loan was now worth $42,185.

The loan was in pounds and in May 1986 the dollar pound rate was 1.55 dollars per pound.  So the 12,000 pound loan purchased $18,600 of silver.  The pound then crashed to 1.40 dollars per silver.  The loan could be paid off for $13,285 immediately creating an extra $5,314 profit.  The profit grew to $47,499 in just a year.

Conditions for the silver dip have returned.  The availability of low cost loans and silver are at an all time low.  The price of silver has crashed from nearly $50 an ounce to below $14 as did shares of the iShares Silver ETF (SLV).

silver chart

(Click on chart from Google.com  (1) to enlarge.)   Imagine investing in a spike like this… with leverage!

At the same time the silver gold ratio hit 80, a strong sign to invest in precious metals.

I have updated a special report “Silver Dip 2016” about a leveraged silver speculation that can increase the returns in a safe portfolio by as much as eight times.  The purpose of the report is to share long term lessons gained through 30 years of speculating and investing in precious metals.  While working on the report, when the gold silver ratio slipped to 80 and the price of silver dropped below $14 an ounce, I knew I needed to share this immediately.

I released a new report “Silver Dip 2015” so readers were able to take advantage of these conditions and leverage 1.6 times as a speculation.  That report generated profits as high as 212% and a revised 2017 issue has been produced.

“The Silver Dip 2106”  sells for $39.95 but  you receive  “Silver Dip 2017” FREE when you subscribe to Pi.

Save

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 the $29.95 report “Three Currency Patterns For 50% Profits or More” and the $39.95 report “The Silver Dip 2017 free.

Triple Guarantee

Enroll in Pi.   Get the first monthly issue of Pi, and the report “Three Currency Patterns For 50% Profits or More” and “The Silver Dip 2016” 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 purposeful 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:  I guarantee you can keep “Three Currency Patterns For 50% Profits or More” and “The Silver Dip 2106” report as my thanks for trying.

You have nothing to lose except the fear.   You have the ultimate form of financial security to gain.

Subscribe to the Pi for $197.   You Save $158.95.

Gary

 

 

 

(1)  www.nytimes.com – Valeants drug price strategy

(2) www.cheatsheet.com – Price pressures from farm to table

New International Investing Era


A new international investing era could be created by a destructive scientific fundamental that is now so powerful it could overwhelm all other factors determining our wealth. This danger has such power that it could destroy most investors and much worse… end civilization as we know it.

electromagnetic-pulse

Photo from Wikepedia report on Electromagnetic pulse weapons.

The most frightening part is that this force could unleash its destruction on us… now… at any time!

I want to share what, why and when this disaster could happen.

Then, I want to share how you can be protected rather than ruined.  We’ll even see how this, with luck, could be the creator of untold wealth which you, I, and a handful of cautious, insightful investors could share.

Before I explain how to safeguard your family from this possible upcoming disaster, let me explain that I first began to understand the magnitude of the risk after reading the New York Times best selling novel “One Second After” written by bestselling author, William R. Forstchen.

The story had extra meaning for me because it shows life in a small North Carolina town (similar to where Merri and I live during the summer) after an electro magnetic pulse is detonated by terrorists over the United States.

In the story the electrical grid and anything using a computer stopped working due to an Electromagnetic Pulse (EMP) created by just three small nuclear devices, launched from container ships and detonated high above the USA.

Without central communication and distribution, mass devastation and chaos ensued immediately.   The agony was terrible and life almost unfathomably complicated.

What made this fiction meaningful is that the book really documents and details the West’s dangerous reliance on technological systems which are so extensive that no one even recognizes them any more.

Adding to the terror of this book is a forward by Newt Gingrich and and afterword by Captain Bil Sanders (USN) one of the foremost experts on EMP. His comment  on how an EMP exploded over the US would create the Compton effect and how it would have “devastating consequences on our country” should be examined and understood.

It was Captain Sanders’ deep understanding of EMPs that made the warning in this book so powerful.

In a moment we’ll share ways to protect against this disaster… that could happen to all of us… suddenly… at any time.

First here are three facts that you should know.

EMP Fact #1: Many countries, including the US have EMP weapons that have nothing to do with a nuclear bomb and are quite small. They essentially put out a high energy very sharp spike of energy – high frequency and very short wavelength, short duration pulse.

However it is the nuclear EMP device that creates the greatest risk.  These are nuclear bombs that DO NOT CREATE DAMAGE FROM THEIR BLAST, HEAT OR NUCLEAR FALLOUT.   Instead the weapons create an electrical wave that fries just about anything with a computer.  A survey of open sources over the past decade finds that knowledge about EMP and EMP attack is evidenced in at least Britain, France, Germany, Israel, Egypt, Taiwan, Sweden, Cuba, India, Pakistan, Iraq under Saddam Hussein, Iran, North Korea, China and Russia.

Russian and Chinese military scientists in open source writings have shown how to design nuclear weapons that generate an extra powerful EMP effect called Super-EMP that can destroy even the best protected military and civilian electronic facilities.

electromagnetic-pulse

EMP Fact #2:  This risk has grown to such an extent that America’s electrical grid is so vulnerable to terrorist attack that the Homeland Security Committee Chairman Bennie Thompson is pushing a bill to give the energy commission broad authority for “true emergency situations.”

This is explained in a recent USA Today article entitled “Electrical grid vulnerable to terrorist attack”  by Thomas Frank.  Here are excerpts from that article: It sounds like a science-fiction disaster: A nuclear weapon is detonated miles above the Earth’s atmosphere and knocks out power from New York City to Chicago for weeks, maybe months.

electromagnetic-pulse

This graphic is from the USA Today article linked below.

Experts and lawmakers are increasingly warning that terrorists or enemy states could wage that exact type of attack, idling electricity grids and disrupting everything from communications networks to military defenses.

An expert panel that Congress created to study such an attack says it would halt banking, transportation, food, water and emergency services and “might result in defeat of our military forces.”

“The consequences would be catastrophic,” said Joseph McClelland, director of the energy commission’s Office of Electric Reliability. Full recovery could take up to 10 years, he said.

The scenario involves a phenomenon called an “electromagnetic pulse,” or EMP, which is essentially a huge energy wave strong enough to knock out systems that control electricity flow across the country.

The immediate effect would resemble a blackout. Although blackouts can be restored quickly, an EMP could damage or destroy power systems, leaving them inoperable for months or longer.

House Homeland Security Committee Chairman Bennie Thompson, D-Miss., is pushing a bill to give the energy commission broad authority.

At a committee hearing in July, Steve Naumann of energy giant Exelon said the authority should be limited to “true emergency situations.”

The commission studying the threat says the U.S. is ill-prepared to prevent or recover from an EMP, a vulnerability could invite an attack.

“We are not well-protected at all,” said Michael Frankel, who was executive director of the commission.

EMP Fact #3:  If an EMP event takes place, the Western World could quickly run out of food. Here is an excerpt of a transcript of a speech given by Professor Sir John Beddington, chief scientific adviser to the British government, at the GovNet SDUK09 event.  This has become know as “The Perfect Storm” speech.

I spoke here last year at about the same time about the issue of the food crisis and the burgeoning increases in food prices that were being driven by population growth, use of biofuels and so on.

The first problem here is that we really have a major issue. This graph takes a little bit of explanation; it is the ratio of our reserves to our consumption. What it is showing is that last year is the lowest level of reserves that we have had as a proportion of our consumption in years, since 1970 and actually since records were taken of this sort.

electromagnetic-pulse

That means that we’ve got somewhere like reserves of around 14% of our consumption, that implies, give or take, 38 or 39 days of food reserves if we don’t grow any more.

As you can see, it’s the lowest level that we’ve actually had.  Is that a problem?  Well the answer is yes it is going to be a problem.  We saw the food spike last year; prices going up by something in the order of 300%, rice went up by 400%, we saw food riots, we saw major issues for the poorest in the world, in the sense that the organisations like the World Food Programme did not have sufficient money to buy food on the open market and actually use it to feed the poorest of the poor.

But this is England, not North America.  Right?

Beddingdon’s note shows that North America might not be able to rely on Europe for much food assistance and…

America’s food reserves are even worse as explained in this excerpt from last year’s article “The US has no grain reserves” published in the Tri State Observer, Milford, PA. The excerpt says:  Larry Matlack, President of the American Agriculture Movement (AAM), has raised concerns over the issue of U.S. grain reserves after it was announced that the sale of 18.37 million bushels of wheat from USDA’s Commodity Credit Corporation (CCC) Bill Emerson Humanitarian Trust.

“According to the May 1, 2008 CCC inventory report there are only 24.1 million bushels of wheat in inventory, so after this sale there will be only 2.7 million bushels of wheat left the entire CCC inventory,” warned Matlack. “Our concern is not that we are using the remainder of our strategic grain reserves for humanitarian relief. AAM fully supports the action and all humanitarian food relief.

Our concern is that the U.S. has nothing else in our emergency food pantry. There is no cheese, no butter, no dry milk powder, no grains or anything else left in reserve. The only thing left in the entire CCC inventory will be 2.7 million bushels of wheat which is about enough wheat to make 1⁄2 of a loaf of bread for each of the 300 million people in America.” (MY BOLD)

The CCC is a federal government-owned and operated entity that was created to stabilize, support, and protect farm income and prices. CCC is also supposed to maintain balanced and adequate supplies of agricultural commodities and aids in their orderly distribution.

“This lack of emergency preparedness is the fault of the 1996 farm bill which eliminated the government’s grain reserves as well as the Farmer Owned Reserve (FOR),” explained Matlack.

This is backed up by a Scienceblog article that says: “The US Government Has Zero Grain Reserves.”

In 1996, the Federal Agriculture Improvement and Reform Act of 1996 (“Freedom to Farm Act”) called for elimination of government stockpiles of grain.  I’m sure someone thought it made sense, at the time.

Now, the United States government has no reserves of butter, cheese, dry milk, barley, corn, oats, sorghum, soybeans, wheat, rice, sugar, honey, peanuts, canola seed, crambe, flaxseed, mustard seed, rapeseed, safflower seed, sunflower seed, peas, lentils, chickpeas, and cotton.  [Source: US Farm Service Agency, Current CCC Inventory (PDF file)]

The book, “One Second After”, clearly and very dramatically (but I am not sure how accurately) drives home the point that unless a person takes a unique financial stance that his finances, and maybe even his or her life, could be wiped out.   Many military and scientific studies support this monumental economic, social and life threatening risk.

Yet you do not have to ruined by EMP.  You may even find that this potential weapon will create extra ordinary wealth that a few investors will share.  Here is how and why.

First, there is no proof that an EMP event as described above would create quite the havoc mentioned above.

Here is how one scientist whom I have known for years and trust completely, explains this.

“I’m not sure how large an effect the nuclear device would have above the atmosphere — the pulse might dissipate somewhat along the earth’s electromagnetic field.  It would probably take out a lot of communications and military satellites.

“Electronic devices that are not attached to any power source and that do not have an antenna when the EMP pulse hits could survive – even better with some shielding material.”

EMPs could be the driving force for the next investing era.

Just like the nuclear threat in the Cold War…  an EMP attack may never happen.   Yet because it could… the perception of risk… has created a huge rush by many governments to develop new weapons and forms of protection… just as during the Cold War.

This site and our multi currency site have repeated many times how stock market bulls and bears are based on cycles of human interaction, war, technology and productivity.

These cycles are intricately connected with the new waves of productivity that grow from the great human platform of combat. The cycle goes like this.

An economic downturn enhances a war or threat of war. Struggles for survival in the war (like the Civil War, WWI, WWII and the Cold War (WWIII), 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.

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

Each boom leads to excess.

Each excess led to a correction.  The correction creates an economic downturn.

The economic downturn enhances a war or threat of war.

Here we are… in the correction again… at the correct time when we should expect that another war (or threat of war such as the Cold War) should begin to build!   This latest 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.

If the cycle repeats, the struggle should build now due to the poor economy.

The key for spotting the greatest investment opportunities is to spot the next big invention… the technology that will spin out of WWIV.

The key is that a problem must have such severe consequences (such as losing the war and being destroyed) that all stops… all logics of return on investment are ignored.  Technology and research are pushed full steam ahead regardless of cost. The threat must be real and serious… like EMP.

There are seven steps you can take to assure that you are not destroyed by an EMP.

#1:  Move well away from the USA…. to an agriculturally based country.  This is one reason Merri and I have been active in Ecuador for nearly 15 years.

#2: Move to Small Town USA.  Our sites have been looking at the benefits of this for years and why we live on agricultural property.

#3:  Create your own source of food.

#4: Create a local source of hardened energy and communications.  This is one reason our newest real estate purchase is also agricultural property and already has a HAM radio tower installed.

#5: Keep some gold and or silver on hand.

#6: Know how to take care of your own health.

#7:  Hold some assets outside of North America.

Merri and I have already taken six of these seven steps… and are well on our way to completing the seventh step.  From this we learned one really important point.

You should not suffer in the process of  gaining this protection either.

Merri and I did not move to the country… buy our Blue Ridge farm… set up our own food supply… start our garden… buy agricultural land in Florida… get a ham radio tower… buy gold and silver… organize assets out of the US and become involved in taking care of our own health naturally because we were worried about EMPs.  We did so because we wanted to.

Chances are that an EMP attack will NOT take place.  During the Cold War nuclear bomb shelters were not required!

Yet can we take a chance?  Ignoring this risk and with no action is not the answer either.

Instead let’s share ways and lifestyle alterations that protect as they provide joy, satisfaction, better health and enhanced wealth.

You may not be able to (or want) to move your home abroad or to a rural area.   Yet gardening, even in urban areas,  can be healthy and fun.  Holding some precious metals is probably a good investment anyway.  We should be taking care of our health even when their is no threat of war.

When it comes to holding assets abroad… our multi currency course can help.

Since mankind began, every generation has endured some great threat or risk.  Yet here we are… still growing!  Only time will tell whether EMP will create havoc or the greatest new wave of wealth we have seen.  Whichever, Merri and I will be here to share the experience with you.

Gary

The greatest asset of all is the ability to earn wherever you live, which brings everlasting wealth.

This is why we offer our course Tangled Web… How to Have an Internet Business.

A clear mind and healthy body are also a vital assets… plus a second language is a powerful diversification tool.

This is why I am giving everyone who enrolls in our North Carolina or Ecuador International Business & Investing seminar in October or November our “Tangled Web… How to Have an Internet Business Course” (offered at $299) free.

Here are comments from a reader about the way we help:  Thank you for your inspiration and information outlining foreign banking and retirement.  Your comments and suggestions are welcome for planning the steps to evaluate the early stages of living abroad.

Nov. 9-10 Imbabura Real Estate Tour

Nov. 11-14 Ecuador Coastal Real Estate Tour

December 6-8 Blaine Watson’s  Beyond Logic & Shamanic Tour

December 9-10 Imbabura Real Estate Tour

December 11-13 Ecuador Coastal Real Estate Tour

Join us in 2010.   Attend more than one seminar and tour and save even more plus get the three emailed courses free.

Our multi seminar-tour discounts have grown!

See the 2010 winter schedule below.

To Enroll click below.

1 real estate tour  $499 Couple $749

2 seminar courses & tours $949 Couple  $1,399

3 seminar courses & tours   $1199 Couple  $1,749

4 seminar courses & tours   $1,399 Couple $2,149

5 seminar courses & tours  $1,599 Couple $2,499

(Be sure to show in the comments section which courses and tours you are attending)

International Club attend up to 52 courses and tours in 2010 free.

Jan.   8-11     Ecuador Export Tour ($499) Couple $749
Jan. 13-14     Imbabura Real Estate Tour
Jan. 16-17     Coastal Real Estate Tour
Jan. 19-20    Quito-Mindo Real Estate Tour
Jan. 22-23    Cuenca Real Estate Tour

Feb. 11-14   Quantum Wealth Florida -International Investing & Internet Business, Mt. Dora, Florida ($749) Couple $999
Feb. 15-16   Travel to Quito and Andes
Feb  17-18   Imbabura Real Estate Tour
Feb. 20-21  Coastal Real Estate Tour
Feb. 23-24  Quito-Mindo Real Estate Tour
Feb. 26-27  Cuenca Real Estate Tour

Mar. 11-14     Super Thinking + Spanish Course, Mt. Dora, Florida ($749) Couple $999
Mar. 15-16    Travel to Quito and Andes
Mar. 17-18     Imbabura Real Estate Tour
Mar. 19-20    Cotacachi Shamanic Tour
Mar. 22-23    Coastal Real Estate Tour
Mar. 25-26    Cuenca Real Estate Tour

See our entire 2010 seminar and tour schedule here

Read the entire articles:

Electrical grid vulnerable to terrorist attack

The US has no grain reserves” published in the Tri State Observer, Milford, PA.

Ecuador Food Prices


Ecuador food prices are low.

There is a lot more to Ecuador food than just the low price.

Ecuador food is not anything like Northern Latin food.  Beans & rice … tacos… tortillas… enchiladas… burritos etc. are NOT the typical food.

Here is a typical Al Muertzo (lunch of the day) at Meson de las Flores… beef stuffed cabbage… fresh vegetables and potato pancakes.

ecuador-food-prices

Here is another, steamed quinoa with avocado and shrimp.

ecuador-cultrural sensitivity

Availability is of good food is great! Here are some shots I took at the Ibarra seafood market.

ecuador-food-prices

Even in the Andes, There is a huge selection of great Ecuadorian seafood.

ecuador-food-prices

Plus the people put such great energy in the production… the growing… the selling at the market and the cooking.  The Ecuadorian people are warm and friendly Every step in the process.

Merri and I love to get in the kitchen with the staff and cook.  Merri is a great cook and the staff are kind so they tolerate me!

ecuador-food-prices

The process of preparing and cooking is fun and after the work, the staff all dine together… laughing,  joking and giggling after a long day. Here they are eating in the kitchen.

ecuador-food-prices

Ecuadorians are artists at heart so they make everything beautiful.  They turn the breakfasts they serve at Meson into artforms, from the fruit…

ecuador-food-prices

to the eggs and even…

ecuador-food-prices

the juice. Here is the juice one morning,  fresh squeezed alfalfa and mango juice.

ecuador-cultrural sensitivity

Another day it is mango juice with raspberry.

ecuador-cultrural sensitivity

The staff  even put their enthusiasm into the linen!

ecuador-cultrural sensitivity

Even the catsup (I would rather not serve it at all, but some guests insist) gets special treatment… served in a carved out grapefruit.

ecuador-cultrural sensitivity

The chefs are serious about serving great food. Here I am with our chef Santiago.

ecuador-cultrural sensitivity

Alberto, our sous chef, is a maestro as well.

ecuador-cultrural sensitivity

The staff are always looking for ways to make the food look better when they serve.

Here are some typical coffee break servings for our course delegates.

ecuador-food-prices

Empanadas

ecuador-food-prices

Fresh strawberries and gooseberries with shredded fresh coconut and dipped in Ecuador chocolate.

ecuador-cultrural sensitivity

Quinoa jello.

Ecuador food and all this beauty is possible at really affordable prices because the base prices of Ecuador food is so low.

I asked Mauritio, our night watchman and concierge to visit Cotacachi market and get some prices of Ecuador food.

Here is Mauritio’s  report.

Mr. Gary

At the Cotacachi market a trout cost $1.66 but if you buy four or more then the prcie drops to $1.25.

Lomo fino, the best beef for one kilo is $5.28 ($2.40 a pound).

Chicken is $2.64 a kilo ($1.20 a pound).

One kilo of apples is $1.25 (8 apples). This is 56 cents a pound.

One kilo of pears is $1.25 (8 pears – 56 cents a pound).

A liter of fresh milk (appx. quart) is 40 cents.

A pineapple ranges based upon size from 80 cents  to $1.25

Eight mangoes is 2.40.

A batch of 20 bananas is  between 25 and 50 cents.

Regards, Mauritio.

Ecuador-food

Maurition Bonilla.

Low price is not everything when it comes to food.  Quality, freshness and ripeness…plus the way it is grown, prepared and served all count. in Ecuador you can get all the above at a price that is easy on the pocketbook.

Gary

Enj0y Ecuador food on our upcoming Ecuador tours.

June 12-14 Shamanic Mingo Tour

June 16-17 Imbabura Real Estate Tour

June 18-21 Ecuador Coastal Real Estate Tour

July 4-8  Ecuador Export Tour

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

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.

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

International Investing and Business Made EZ Part III


International investing and business have proven themselves over the past 40 years to be profitable. More important than the profits that have been made are the broadened horizons, fulfillment and fun! Yesterday’s message looked at one reason for this. Fun is healthy and healthy needs to spend less on pharmaceuticals and expensive medical treatment. The Western medical model has many flaws, and they are about to get worse. Take the US medical system…especially Medicare and Medicaid as an example. Alan Greenspan wrote in his book, “The Age of Turbulence” that his biggest concern is the retirement of the baby boomers and the impending fiscal problems caused by the draws on Social Security and Medicare. He considers it an urgent problem that needs to be addressed soon. He said in the TV show Meet the Press: “Social Security is not a big crisis. We’re approximately 2 percentage points of payroll short over the very long run. It’s a significant closing of the gap, but it’s doable, and doable in any number of ways. “Medicare is a wholly different issue because, remember, right now, with the current entitlement, we can afford Medicare. It’s easily refunded. We’re going to double the size of the retired population. And by all of the analysis I go through in the book, it’s very evident to me that we are not able to actually deliver on the Medicare we are promising, and I think that is marginally unethical to immoral because we are promising to people who have not yet retired a fairly significant Medicare package which, if they knew they weren’t going to fully get, they would take actions now—maybe retire later, do different things—and I think everybody has been avoiding this issue. “We avoided it in the Social Security Commission in 1983, and everyone’s done—been doing it since. Then it was more than 20 years before. We’re now right at the point where if we don’t act we’re going to be in very serious problem—trouble.” The demographics and math support Greenspan’s assumptions unless the prophesies written in the political satire written by Christopher Buckley “Boomsday” become true. The book looks at the point when boomers become eligible for Social Security — and are ready to demolish the federal budget. A prophetic heroine in her 20s starts a revolution by urging “Stop paying taxes and create financial incentives for boomers to commit suicide.” This is a tale slightly reminiscent of the truly terrible 1970’s movie “Soylent Green” with Charlton Heston, Vivian Leigh and Chuck Conners. This was a tale of Earth in despair in 2022. Natural food like fruits, vegetables, and meat among others are now extinct. Earth is overpopulated and New York City has 40 million starving, poverty stricken people. The only way they survive is with water rations and eating a mysterious food called Soylent. The greenhouse effect has risen the temperature into nearly unbearable regions, and the people are kept in the cities by law. The rich live in separated luxury apartments (with women as part of the rented furniture) but also experience the lack of natural food. Strawberries are at $150 for a glass of them. Elderly people are paid to commit suicide and a detective investigates the murder of the president of the Soylent company. The truth he uncovers is more disturbing than the Earth in turmoil when he learns the secret ingredient of Soylent Green….the elderly! The book may be satire….the film science fiction but how far off base are the numbers? At current inflationary rates by 2022 a glass of strawberries will not cost $150. Last year I wrote how a cream tea (albeit a very fine cream tea) at Bettys in Yorkshire was $20 per person. If food prices continue to grow at 5% per annum you can easily expect to pay $35 for a bowl of strawberries by 2022. The book and the movie are caricatures of what our future could bring. Yet caricatures are exaggerations that show a point. The point here is that the social economic mathematics of the current social – retirement – medical system do not work. We will need another way. One that makes sense to me is that older people continue to have international investments and business. I think this is better than a federal incentive to commit suicide! People will not retire as before…and this offers a triple benefit if what they are doing to earn money helps them stay healthier and enjoy life more because their service is their passion…exciting…fulfilling and fun. Until next message, I hope you feel and enjoy and feel a passion every day. Gary Learn International Business Made EZ on line Learn about our next International Investing and Business Course in North Carolina Ecuador Ecuador Import Export Course International Investing and Business Made EZ Ecuador

Feast Now Famine – Multi Currency Investments


Shots like this of an Ecuador food market and multi currency investments grow in importance…beause the world’s cupboards are getting bare!

Ecuador-Food
Multi currency investments help investors adapt to change.  Multi currency investments are especially valuable now because change is here…big time.

Change brings distortions. Distortions create problems and problems create opportunity.

Messages about multi currency investments over the last two days have looked at a problem that had been forgotten for many years…having enough food.

US debt creates a falling US dollar.  This is why multi currency investments are important.  A falling dollar creates inflation. Yesterday’s message showed us how soon twenty dollar bill will not be enough to buy a gallon of milk, a dozen eggs and a small loaf of bread.

This is the tip of the iceberg.  Beyond the greenback’s demise there is a more serious underlying supply and demand fundamental…there simply is not enough food right now.

Investors need more than just multi currency investments.

This was not the global position in past decades. In the 1980s, the U.S. Department of Agriculture was saddled with mountains of surplus cheese, corn and other foods that it socked away in warehouses and even caves.

As recently as 2003, the USDA had to buy so much powdered milk to support dairy prices that beleaguered officials shipped some to U.S. ranchers for cattle feed.
The European Union farm program had lakes of excess wine and mountains of cheese and butter stored.

Yet a recent USA Today article says: “While the previous surpluses were costly and sharply criticized, much of the food found its way to the poor, here and abroad. Today, says USDA Undersecretary Mark Keenum, “Our cupboard is bare.

“U.S. government food surpluses have evaporated because, with record high prices, farmers are selling their crops on the open market, not handing them over to the government through traditional price-support programs that make up for deficiencies in market price.

“Worldwide, food prices have risen 45% in the past nine months, posing a crisis for millions, says the United Nations’ Food and Agriculture Organization.

“Because of the current economics of food, and changes in federal farm subsidy programs designed to make farmers rely more on the markets, large U.S. reserves may be gone for a long time.

“The upshot: USDA has almost no extra food to supplement the billions in cash payments it spends to combat hunger at home and in developing nations.”

This is a huge problem and hence grand opportunity.  The solution is not simply making more money with multi currency investments…to buy enough food either.   You cannot be rich, happy, successful and full when those around you are hungry.  Not only is this inhumane…hunger and thirst are motivations that will destroy law and order faster than any other!

Investors have to put their multi currency investments in businesses that will bring fundamental changes in the way the world produces food.

I noticed this recently when at the Parsons Feed Store buying laying mash for our hens.  The phone rang and the clerk seemed exasperated. “No we do not have any,” she almost shouted in the phone.  “Seed potatoes.” she said. “Everyone is calling for them and we have been out for weeks”.   I asked, “Was the supply short this year?”   “No,” she said. “We had two shipments. Everyone is just buying more.”

There is an opportunity somewhere here.  I haven’t figured out what it is, but know it is there.

Take, as another example, shares of Vestas Wind Systems. We follow these shares in our multi currency course and they have been a huge winner.  One reason behind the food shortage is that many governments incorrectly promoted food (such as corn) as a source of alternate energy.  This helped skew the food supply down faster than demographics would have done.

Those who change, adapt and invest in solutions to problems are those who will profit.  This is why we are examining seven multi currency shares including Vestas in our multi currency course.

Until next message, may food always be abundant for you.

Gary

Learn more about multi currency investing at our multi currency portfolio course.

This is also why we are adding sessions on nutrition at our upcoming intuition course.

Here are delegates at a previous course enjoying a nutrition lesson in our teaching kitchen at the farm.

Ecuador Shamans

I love gardening.  This may become a hobby that goes beyond handy.  Folks round here still know how to feed themselves without the big city.  So do Merri and me!

Here is a previous year’s sunflower crop.  This was always for the beauty of the flowers. Now I am thinking about nutritional value instead.

Sunflowers

This course will be conducted here in Ashe county where we live on a farm in part to be sure we have enough food by growing our own.  Hopefully part of our squash crop will be ready to serve. We aways have great pumpkins and squash.  Here is a previous crop.

Squash

Learn more about the food benefits of  Ecuador travel and living.

This is one reason we love Ecuador as our second home. There is such an abundance of good food.  The rich volcanic soil, full sun and lage rural economy means that almost everyone knows how to feed themselves. Here is a shot at Cotacachi market

Ecuador-food-stall

There is an article about this at Cotacachi Market – Quality living at cheap cost

See dates for our Ecuador tours and courses below:

Coastal Real Estate Tour

Ecuador’s fishing fleet  make eating fresh seafood easy, inexpensive and good!
Cotacachi food tas;

We bring fresh seafood to our hotel as well. Here I am with Merri and our chef Santiago at El Meson de las Flores after visiting Ibarra seafood market.

Gary Scott

Super Thinking + Spanish Course

Imbabura Real Estate Tour

Ecuador Shaman Tour

Ecuador Import Export Course

See discounts for attending more than one course.

Multi Currency Investing Beats Inflation.


Multi currency investing helps fight inflation.

As the US dollar falls, prices rise for everything….even local goods like food.

This is one reason Merri and I like to live on a farm with our chickens (eggs) and fresh natural fruit and vegetables. Here the blackberries are in bloom along our front yard fence.  We collect enough so that Merri can make a cobbler each week.

inflation-proof-blackberries

This is because there is a growing global demand for produce…wheat…corn.

Apples too but we have plenty growing here!

inflation-proof-apples

In short, people abroad are competing with stronger currencies for US food.

Yesterday’s message, Multi Currency Statistics, showed how this means that inflation is worse than statistics show.

According to US government inflation statistics, core prices described as “Core CPI” have risen just 2.3% in the last year.  Yet this figure does not include the price of food or energy.

In the last year, medical care costs have jumped 4.4%.  Food is up 5.1%.  Energy has risen 16.1%.   Over the past nine months, global food prices have soared 40 percent, while food reserves are at 30-year lows. These non included costs are what we spend most!

Plus according to a recent Reuters are article food prices are about to get much worse.

The article says:  “U.S. food prices will rise a stiff 9 percent a year through 2012, the largest increase since 1979 and the result of record-high crop prices,” the head of an economic consulting company said on Thursday.

“Retail prices on staple American foods rose by double-digit percentages in the last year, according to new data from the federal Bureau of Labor Statistics (BLS). The cost of milk rose 26 percent, and egg prices grew by 40 percent.

“Food inflation could pose a more serious threat to consumers in the US than soaring oil prices. This is because food accounts for 13 percent of spending for average households, compared to about 4 percent for gasoline.”

What does this mean?

Yesterday I went grocery shopping. A small loaf of good sourdough bread was $3.99.

At 9% per annum here is what it will cost each year.

2009   $4.34
2010   $4.74
2011   $5.12
2012   $5.58

A gallon of organic milk yesterday was $8.38.

2009   $9.13
2010   $9.95
2011  $10.85
2012  $11.82

We do not buy eggs thanks to our friendly chickens who live with us on our farm.

As boomers begin to retire on their social security, a loaf of bread and a gallon of milk will leave $2.60 change from a twenty dollar bill…not enough to buy a dozen eggs.

This is why we need multi currency investments to protect against the falling US dollar and fight inflation.

Yet the problem may be worse.

Milk rose 26 percent, and egg prices grew by 40 percent in the US this year.

Worldwide, food prices have risen 45% in the past nine months according to the United Nations’ Food and Agriculture Organization.

This creates enormous opportunity because it is a huge problem.  Problems  create opportunity.

Many people will become poorer because of this problem but wise investors will gain by investing in businesses that help solve these problems.

So what types of problems will a global food shortage create?

We can get a clue about one by looking at the Danish Pharmaceutical Portfolio we track in our Multi Currency Course.

Here is how it performed during the recent global equity set back..

Name                            Invested Amount           Recent Value
Genmab                             50,000.00                    39,903.33
NeuroSearch                      50,000.00                    36,475.09
Coloplast A/S B Aktie        50,000.00                    49,584.82
Novo Nordisk B                  50,000.00                    56,294.62
Alk-Abello B Aktie             50,000.00                    28,053.46
William Demant Hld.          50,000.00                    43,180.33

Why when this sector was slaughtered did Novo Nordisk shares rise 12% in three months?  One reason is this company is one of the largest producers of insulin in the world.  As food grows in cost more people eat less expensive carbohydrate food. Too many carbs in the diet encourage diabetes. Diabetes creates a demand for insulin.

This is another reason we like farm life with plenty of ponds and creeks filled with fish.

inflation-proof-fish

Some are pretty good size as well like this trout our daughter Eleanor fed four of us with!

inflation-proof-big-fish

Those who change, adapt and invest in solutions to problems are those who will profit.

This is why we are examining seven multi currency shares including Novo Nordisk

Until next message good multi currency investing

Gary

Learn more about multi currency investing at our multi currency portfolio course

Learn more about fighting inflation with Ecuador real estate and Ecuador living

See dates for our Ecuador tours and courses below:

Coastal Real Estate Tour

Super Thinking + Spanish Course

Imbabura Real Estate Tour

Ecuador Shaman Tour

Ecuador Import Export Course

See discounts for attending more than one course.

Multi Currency Statistics


Multi currency statistics are important because of inflation statistics.

Inflation, at times, sneaks up like a cat.

inflation-creeps-like-a-cat

This is Alice, one of our barn cats.

Other times inflation rushes in like a lion…such as…now.

Multi currency investing protects us from inflation.

Here is Boots our other farm cat…not dangerous like a lion or inflation…unless you are  a mouse I guess.

inflation-cat

Inflation is worse than statistics suggest. This is because of the nature of the statistics.

Most mornings, when we are at our Blue Ridge farm,  we take an early hike in the woods.  Our two cats, Boots and Alice, join us with our hound dog, Ma. This seems strange to me. I have never had cats who like to hike along…but these two do.  Our cats and dog get along…unlike wealth and inflation which do not.

Often we stop at the pond. Boots and Alice look for mice. Ma sniffs everything.  I sit and reflect on economics, reality, statistics, multi currency investing and inflation.

It is beautiful here…mists play on the meadows and the shadows are long.

inflation-thinking-time

The shadows remind me of distortions created by statistics.  How numbers hide reality and how this fact and the change it heralds will make some multi currency investors rich.

Most investors will become poorer…because inflation and wealth do not get along.  Inflation hides reality.  Most investors are tricked.  They do not see economic reality  and they do not adapt and make multi currency investments or at least investments that really fight inflation.

According to US government inflation statistics, core prices described as “Core CPI” have risen just 2.3% in the last year.

Yeah…let the statistician that came up with this number go food shopping!

Believe it or not the Core CPI, which is so often used by statisticians to describe  inflation, actually strips out food and energy, because these prices are volatile.

A better guide to real inflation is the “Core Personal Consumption Expenditure Price Index (PCE deflator)”.  This index includes the average increase in prices for all domestic personal consumption. It’s indexed to a base of 100 in 1992 and derived from the largest Gross Domestic Product component, personal consumption expenditures. This includes important costs such as  housing, most insurance, motor vehicles, energy, food and medical expense.

This index rose 2.1% last quarter.

2.1% per quarter inflation is a bit more serious than 2.3% a year.

Yet even this serious rise masks the reality that many of us face because even the PCE deflator includes things we do not buy often…such as computers.

The big costs…that really take a bite, especially for those planning to retire or go on a fixed income are food, energy, medical expenses and insurance.

In the last year medical care costs have jumped 4.4%.  Food is up 5.1%.  Energy has risen 16.1%.

Over the past nine months, global food prices have soared 40%, while food reserves are at 30-year lows. The rising cost of food is becoming a major source of global social instability and economic hardship.

Yet this is just the beginning of inflation problems as we will see in tomorrow’s message.

Until then, good global investing.

Gary

P.S.  Remember.  Problems create opportunity.

Big problems create big opportunity.

Bigger problems create bigger opportunity.

The biggest problems create the biggest opportunity!

This is what I love about capitalism – humanity serving one another- at work.

Take inflation’s push on energy prices, as an example. Higher fuel costs have forced some airlines to charge an extra $15 for checking a suitcase.  That”s quite a problem.

Solutions anyone?

One answer is that some hotels have added a suitcase buyback in their marketing.

Stay with the hotel and they’ll knock the $15 baggage cost off the room bill! Problem solved.  The consumer remains even, and the hotel that adapts prospers.

Those who change, adapt and invest in solutions to problems are those who will profit.

This is why we are examining  seven multi currency shares.

Learn more about multi currency investing at our multi currency portfolio course.

Learn more about fighting inflation with Ecuador real estate and Ecuador Living.
See dates for our Ecuador tours and courses below:

Coastal Real Estate Tour

Super Thinking + Spanish Course

Imbabura Real Estate Tour

Ecuador Shaman Tour

Ecuador Import Export Course


See discounts for attending more than one course.

One really important part of fighting inflation during times of change is maintaining a positive attitude and good health. This is why we cook as much as we can with local natural foods like these blackberries that are blooming just below the house. Learn more about how to enhance health, energy and vitality at Cotacachi Food.

inflation-fighting-thoughts

Learn more about how blackberries can help enhance health at Blackberry Pie.