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Value Investing Diary


Value investing in Ecuador or anywhere is probably the best way that most of us can make good investments.

There are some disciplined investors who do well with short term trading… but most of us do not have the time, inclination or ability to invest this way.

In my case, I find that slower is better. Slow value oriented long term investing may not be dynamic or thrilling… but I still have all the money I had mid 2007.

That is more than a lot of speculators can say.

One problem with value investing is that it requires a lot of work, thought, determination, bravery, conviction and patience.  These qualities are not always easy to maintain long term.

Discipline is vital to multicurrency investing.

This is why I was delighted with what John Mauldin had to say when he spoke at the recent Naples seminar that Merri and I co hosted with Jyske Global Asset Managers.

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Here is John.  John is a Fort Worth, Texas businessman with over 1.5 million readers to his emailed financial newsletter.

He was Chief Executive Officer of the American Bureau of Economic Research, Inc., a publisher of newsletters and books on various investment topics, from 1982 to 1987. He was one of the founders of Adopting Children Together Inc., the largest adoption support group in Texas. He currently serves on the board of directors of the International Reconciliation Coalition and the International Children’s Relief Fund. He is also a member of the Knights of Malta, and has served on the Executive Committee of the Republican Party of Texas.

He is a frequent contributor to numerous publications, and guest on TV and radio shows as well as quoted widely in the press.

Thomas Fischer  had a great interview with John during the seminar which you can see here.

John’s speech was important because discipline is the glue that holds all investing theory together.

I believe that there are basically three types of investors… disciplined long term value seeking investors…  disciplined short term traders… and losers.

Non disciplined investors always lose in the long run.

You can read this entire report as a Multi Currency Subscriber.

More on Value Investing

Merri and I are going through the process now of searching for  and seeking to understand value in Florida real estate.  Merri has been keeping a value investing diary to help us get our bearings on what the real value of property in Florida might be now.

Let’s share that diary here.

On the Road
by Merri Scott

A number of you have written and asked, “What about the house you were buying Florida?   Any luck?  Any ideas?”

Well, yes, we’ve been on the search and off and on the road now since late March.

Have we bought anything?  No.

Have we found anything interesting?  Absolutely.  Lots of things out there.

Have we seen good prices/deals?  Wonderful prices, unbelievable opportunities.

Have we learned anything?  Yes, yes, yes, we have.

First of all, to recap…why are we buying a home in Florida?  Well, there are a lot of reasons…

1)  Late last October last year, up here in the High Country we experienced a real knock down day after day, week after week of heavy snow and extreme weather.  We aren’t used to that…we usually have great weather through October, very decent weather in November and a lot of sun but truly cold in December.  We can live with this.  But what we experienced last year, we certainly don’t want to repeat.

2) We sold all our holdings in Florida just before the bubble burst and we miss a place near our daughter and her family down there.  We are welcome there but we desire to be more a part of their lives and to have a home there.

3) Gary reminds me that real estate is all he feels comfortable with at this point.  “Where else should anyone invest at this time?” he ruminates.

“Why Florida?” you might ask.  We’ll give you all the reasons in other reports on this…but yes, there are a darn lot of good reasons for Florida.

We started out in late March (came home back early from Ecuador) for a reason.

We had this idea that we wanted to buy waterfront property but not beachfront.

Many reasons for this but the main one is that we love water…here in NC we have so many streams, creeks, waterfalls…we are almost surrounded with the delight of all this water and do enjoy it.

We knew that we would have to pay a premium for being on the water, but were willing.

We started out in late March which is near the end of the dry season in Florida…usually winters are dry and as summer starts there are daily rain showers which cool things off and bring a lot of water back into the system.

The only real times we would be in resident would be during the dry season and surely did not want the horror of buying “waterfront” only to find out that the waterfront was way out there somewhere into the distance.  (More or this later).

After all our years of experience in Florida, we also knew that it would be best to look in August at anything in South Florida or anywhere there would be the chance of standing water.  (We experienced this in South Florida years before.)…so we just stuck with our old philosophy, look in March-April for Central Florida and of course we were not looking in South Florida, but if we were look in the late summer.  This way, if we can live with the conditions during those months…then we would be OK.

A lot of you have written, “Haven’t heard from you.  Why haven’t you bought in South Florida?”.  Well, this is not to say, someone else shouldn’t…but we were evacuated 17 times over the years, had a lot of heat distress and high humidity over the years and we just didn’t want to go back there.

How did we choose our area?  Well, we’re still at it!

First of all, we want to be near our family in Lakeland but finally after about 2 weeks of driving around, we decided that we should be north of I-4 and not south.  Why?  Well, we can make it easily in a day’s drive north of I-4 but it gets harder and harder to make it further in one day.  (Despite what some might think about our being travelers, we are not.  We go from one home …with our beloved things in that home…to another.  We don’t do well staying in hotels, motels, resorts of whatever…this is torture to us.)

Having finally realized this parameter, we happily eliminated a lot of territory.

Back on the hunt…we love those sleepy, windy little rivers flowing along the center of the state…nice fishing, tiny docks, not much going on and so so full of nature.

Got out the maps, and started remembering those we loved and plotting!

At this point, we decided against using a realtor because we actually needed more under our belts before we started talking houses.

We have long been in love with the Peace River, the Alafia, the Suwanee, the Withlacoochee and many others, including the larger but beautiful St. Johns.  But of course, we were concerned about flooding in these areas also.
(Little did we know that wasn’t the primary problem!)

The Internet has proven to be fabulous as well as awfully scary.  We haven’t bought real estate for “just ourselves” not for investment in a long time and we had forgotten what that included.

In short order, we found that hey, we didn’t need to worry so much about flooding, as DRAWING OUT WATER.  Many municipalities now have the right to “draw” water from these little as well as large rivers…also found out that even California has bought “water rights” to draw down these rivers and ship the water all the way out there.   YIKES!

We used the Internet and began to find a number of possibilities…taking in mind the water rights.  We were down baby sitting for our kids who were taking a cruise and had some time to look around.  Found THE most delightful house tucked in its own woods on a beloved old friend of ours, the Withlacoochee River.  (No one seemed to have water rights on this one.)  Took our darling grandson there.

Gary had been having a long discussion with him re “natural” and “real”.  He was a bit turned around in his mind about the comparison for instance of Sea World (yes, they do have real animals there) and nature.  We made quite a drive for a 6 year old up to this remote area with this fabulous house. (looked at it from all angles, inside and out, and yes, we COULD live with this one!)

I was beginning to think…wow, this is a bit easy…first house, first area we’ve chosen and a greatly reduced price…we’ll just buy it right now!

Garren and Ma (our hound dog) jumped immediately out of the car with great joy.  A beautiful surrounding, old mature oaks, a real sleepy time down south look with a stunningly beautiful, well designed and built all natural house.  Everyone looking excited and happy!

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Here is Garren at our farm learning about nature and farm safety!

There was a long boardwalk as an entry with some cypress trees (whose feet must be wet) always signifying to us high water in the summers or at least standing water.  We nodded “That’s OK” to each other and proceeded.

Garren leaped up to the front door which opened in a lovely two story lodge like atmosphere…a clerestory window view out, a local mounted bear, turkey and deer…and declared, “This is real nature isn’t it, Poppa?”

We didn’t think the house was quite big enough but the land was good, the setting beautiful, the distance to Lakeland OK, and truly it was a house built in nature with nature.  And it was way way below our budget.

To cap it all, Gary glanced out and saw his dream “Look a wonderful old oak with a rope draped over the river where we can swing out and jump right in!”  Fabulous.

Then we all of us strolled out to the river…and there wasn’t one.  It was a very deep, wide ditch with about 3” of water left.

So very sad.  So very disturbing.

Since then the house has dropped from $77,000…according to the latest listing data.

We thanked our lucky stars that we were looking in early April and not summer when the banks might be full.  And we knew right then that we were going to have to do our homework, and that no, it wasn’t going to be that easy.

I’ll continue next week with amazing finds.

Merri

Because Merri has a lot of experience in real estate and we know a lot about Florida, we thought it might be easy to make this purchase.  She was a licensed Florida real estate broker and her first sale was a $1.4 million on the beach in Ft. Myers… in the late 70s… when a million dollars still meant something.  She went on to hold a NASD license which entitles her to be a stock broker, a syndicator of projects, a developer of large communities, etc.

But were we right?  No. Experience of the past today just isn’t enough.

You have to look, compare and think to find value now.

Tomorrow’s message provides an Ecuador value investing tip and why buyers must beware there.

Until then may all your values be good!

Gary

We hope you’ll join us to learn more business and investing opportunities globally as well as Ecuador.

July 4-8 Ecuador Export Tour

July 8-9 Imbabura Real Estate Tour
July 10-13 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.

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.

Ecuador Banking and Business


Recent messages have looked at Ecuador banking and business.

The global economy is going through a paradigm shift.  This creates great opportunity, but also means we all have to embrace change. We need to realize that many will gain a lot in this change… but also some will lose.

Here is an Ecuador income opportunity, a…

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hotel for sale in Otavalo.  Otavalo Market is one of the largest tourist attractions in Ecuador. More below.

There are four places where we are most likely to profit… real estate… commodities… stocks and our own small business… always keeping in mind… value..diversification… service and fulfillment.

Our messages of the last week have featured income earning ideas.

We have looked at:

Ecuador Export Ideas.

Plus how to earn with:

Ecuador flowers Ecuador Flower Income.

US franchises and bed & breakfast at Ecuador & Business Curves.

Ecuador farming at Ecuador Canadian Connection.

Organic Animal Wash.

Ecuador Organic Farming.

The Ali Shungu hotel has been for sale for some time… but we felt the price was  too high…  even though this is an excellent facility with wonderful grounds.

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There is great profit potential with overseas businesses plus there is also enormous tax benefits with an Ecuador or overseas business.

Ali Shungu’s owners wanted a million dollars. “too much”, we thought, “even though it has this full restaurant”.

ecuador-banking-business

There are also enormous legal, asset protection and tax benefits that an overseas business can bring. The most effective structure from a tax deferral point of view is a non U.S. structure (corporation, LLC, limited partnership or trust) that operates entirely outside the U.S. and that is owned 50% or more by a non U.S. person.

Then the owners dropped their asking price to $750,000.  “Getting closer”, was out thinking… but not quite low enough despite this wonderful patio.

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Using an overseas structure, a corporation owned at least half by non U.S. citizens or residents, has helped me expand our hotel business.

Some business owners do not want to have someone else own half their business. If this is the case, I recommend that you donate half the business to some U.S. charities. Pay them some dividends as your profit and treat them well. This can help your business be more fulfilling as well as profitable.

This message shows another Ecuador income producing opportunity, this Hotel Ali Shungu, for sale in Otavalo.

The rooms are adequate.

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plus

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There are three huge condos above the hotel. Here is Merri and one of our delegates on a recent Ecuador real estate tour examining one of the condos.

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Then recently the owners offered us a $150,000 commission to sell the hotel. We are not brokers and do not take commission so our reply was “cut the price for our readers”!  This would place the price at $600,000… an interesting value.

We viewed this hotel on a recent real estate tour and I am sending a full report to my Ecuador Living subscribers next week.   If you are not a subscriber and would like this report, you can learn how to subscribe to Ecuador Living here.

One important point about using overseas structures and banks.  We have warned readers for more than 20 years to be sure to always have an attorney experienced in using overseas structures. The law is complicated.

See one warning written a decade ago at More on the loss of bank privacy

For specific information about using overseas structures correctly, you can contact Joe Cox at jcox@coxnici.com

Joe has been my friend and attorney for more years than I care to remember.  He specializes in estate planning, insurance, trusts and taxation. He received a Juris Doctorate from the University of Tulsa School of Law, and a Master of Laws in Estate Planning from the University of Miami, School of Law. Joe is Board Certified in Estate Planning and Administration and in Taxation by the Florida Bar.

In addition to the Board Certifications, Joe is a Fellow in the American College of Trust and Estate Counsel. He is a member of the American and Florida Bar Associations, and is admitted to the Federal Appellate Courts and the United States Tax Court. Joe is a frequent speaker on tax planning topics such as income taxes, insurance trusts, irrevocable trusts and offshore asset protection trusts. He has also written articles and books concerning income tax and irrevocable trusts.

Joe is listed in Who’s Who in America and Who ’s Who in American Law. Chosen by Florida Trend Magazine as one of the top 1.6% of lawyers in Florida and one of the top 34 Wills, Trusts, & Estate Planning lawyers. Chosen by Worth Magazine to be one of the top 100 attorneys in the Nation.

Among his community commitments, Joe has served many organizations in a leadership position. These include: Naples Community Hospital, Community Foundation of Collier County, YMCA of Collier County, Community School of Naples, Alzheimer’s Association, Forum Club, Senior Friendship Centers, Inc. He was named the Child Advocate of the Year.

Joe will speak at the upcoming JGAM Multi Currency Investment Seminar May 29-31 2009.

Joe wrote several chapters on how to use overseas structures for our course on international business that is included with emailed course n how to develop a web based business. See more here.

Regards,

Gary

Join us in Ecuador.

Ecuador Coastal Real Estate Tour May 16-17. $499 Enroll here.   $749 For a couple.

Delegates stay on this beach that Dennis Goff shot on our last Ecuador coastal real estate tour.

ecuador-canadian-connection

Imbabura-Cotacachi Real Estate Tour May 20-21.  $499 Enroll here.  $749 For a couple.

Ecuador Amazon Herbal Tour May 22-24.  $399 Enroll here. $499 For a couple.

Take Two for One. Attend any of the three international business & investing courses below and select any one of the tours above free.

July 24-26 IBEZ North Carolina + Tangled Web

Oct. 9-11 IBEZ North Carolina + Tangled Web

Nov. 6-8  IBEZ Cotacachi + Tangled Web

Sign up for our three May 2009 tours and attend any of the IBEZ Cotacachi + Tangled Web seminar above FREE.

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.

Learn about our July 2009 Ecuador export tour 2-4-1 deal here.

See our full 2009 schedule here.