Tag Archive | "Socially-responsible investing"

Leverage Risk


We have looked at leverage multi currency investing in recent messages so I wanted to share my reply to this reader’s question.

Thanks for the info Gary. I would love to attend one of your workshops and would love to learn how to make more dollars. I used to trade in the stock market with put and call options on stocks and currency and lost a lot of money. This has left me  gun shy about “investing”.

Any suggestions of where to start? Regards,

Here is my reply.

We just completed a three day course with Jyske Global Asset Management (JGAM) showing why 80% to 90% of the people who trade futures and options lose all their money.

Those who trade options and/or futures contracts or highly leverage investments are not investing.  They are in the business of speculating.

Here are three simple facts that can help understand the difference between investing and speculating.

The first fact is that really safe investments earn about 3%.

This fact was confirmed by Alan Greenspan in his excellent book, “Age of Turbulence” when he wrote: “A major aspect of human nature-the level of human intelligence-has a great deal to do with how successful we are in gaining the sustenance for survival. As I point out at the end of this book, in economies with cutting-edge technologies, people, on average, seem unable to increase their output per hour at better than 3% percent a year over a protracted period. That is apparently the maximum rate at which human innovation can move standards of living forward. We are apparently not smarter to do better.”

That’s a huge fact to understand about investing.

Overall we should expect the global economy to grow at about 3%.

This gives us a baseline for how much an investment should grow.

If an economy rises faster than 3%, it is distorted. During early stages of excessive growth, investors will be attracted. Shares will rise faster.

If the economy remains robust, shares become overbought. Then watch out! A correction will come.

This leads us to the next fact which is “all investments have risk”.

Rather than wasting time trying to avoid risk…which cannot be done, investors should look at three risk elements instead.

#1: How much risk is there in any particular investment?

#2: What perceptions do the market have of the risk?

#3: What risk premium is due?

Bank accounts and government bonds, for example, are perceived as the safest investments (especially if government guaranteed). A look at their long term history shows that they pay about 3%. So if a bank account or government bond pays less…in the long term it’s bad. If it pays more…that’s better. Yet the idea is that bank accounts will not really make money. They will just keep up with growth…at 3%.

To get real growth requires taking risk. If an investment appears to be less safe it will pay more than 3%. This is called a risk premium.

Bonds pay more than bank accounts because they are perceived to be less safe.

Stocks pay more than bonds because they are perceived even riskier.

Over the long run, bonds issued in countries and currencies perceived to be stable pay 5% to 7%.

Stocks in major countries should pay 7% to 10% annual return in the stock market as a function of global growth, long term earnings growth plus risk premium (above bank accounts and bonds).

Emerging market stocks pay more than major market stocks. Emerging market bonds pay more than major markets bonds.

To attain higher growth than 7 to 10% investors must either increase risk, trust luck or spot distortions.

Investments that are leveraged offer even more profit potential but only at equal increased downside risk.

Finally we come to the third fact. Periods of high performance are followed by times of poor performance… and vice versa.

In the times of global panic that we have seen in recent years, all markets tend to drop.

This is good because the market is almost always wrong. Most investors always try to avoid risk. Most investors dump their wealth into investments that are perceived to be safe. This creates excessive demand and lowers value and actually makes the perception wrong.

Knowing this helps wise investors spot trends created by distortions so they can get higher paying investments without extra risk.

Recently we have looked at several reasons why the recent period of high performance investors have enjoyed in the US equity market may be followed by low performance.

One needs to beware of seasonality.

One needs to beware of the downwards pressure on equities in the upcoming economic cycle.

So if you are an investor and are tempted by the upswing in equity markets to become a speculator… beware.

Gary

How We Can Serve You

How to Have Real Safety

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

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

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

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

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

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

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

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

The Pifolio analysis begins with Keppler who continually researches international major stock markets and compares their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.  He compares each major stock market’s history.

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Michael Kepler CEO Keppler Asset Management.

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

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

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

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

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

A country ETF provides diversification into a basket of equities in the country covered.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

Here is the Pifolio I personally use.

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

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

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

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

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

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

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

dr richard smith

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

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

The SSI tells you one of five things:

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

How SSI Alerts Are Triggered

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

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

tradestops

Equal Weight Good Value Developed Market Pifolio.

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

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

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

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

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

tradestops

iShares MSCI United Kingdom ETF (Symbol EWU)

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

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

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

No  one knows the answer to this question.

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

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

What you get when you subscribe to Pi.

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

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

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

You also receive two special reports.

In the 1980s, a remarkable set of two economic circumstances helped anyone who spotted them become remarkably rich.  Some of my readers made enough to retire.  Others picked up 50% currency gains.  Then the cycle ended.  Warren Buffett explained the importance of this ending in a 1999 Fortune magazine interview.  He said:  Let me summarize what I’ve been saying about the stock market: I think it’s very hard to come up with a persuasive case that equities will over the next 17 years perform anything like—anything like—they’ve performed in the past 17!

I did well then, but always thought, “I should have invested more!”  Now those circumstances have come together and I am investing in them again.

The circumstances that created fortunes 30 years ago were an overvalued US market (compared to global markets) and an overvalued US dollar.  The two conditions are in place again!

30 years ago, the US dollar rose along with Wall Street.  Profits came quickly over three years.  Then the dollar dropped like a stone, by 51%  in just two years.  A repeat of this pattern is growing and could create up to 50% extra profit if we start using strong dollars to accumulate good value stock market ETFs in other currencies.

This is the most exciting opportunity I have seen since we started sending our reports on international investing ideas more than three decades ago.  The trends are so clear that I have created a short, but powerful report “Three Currency Patterns for 50% Profits or More.”   This report shows how to earn an extra 50% from currency shifts with even small investments.  I kept the report short and simple, but included links to 153 pages of  Good Value Stock Market research and Asset Allocation Analysis.

The report shows 20 good value investments and a really powerful tactic that shows the most effective and least expensive way to accumulate these bargains in large or even very small amounts (less than $5,000).  There is extra profit potential of at least 50% so the report is worth a lot.

This report sells for $29.95 but in this special offer, you receive the report, “Three Currency Patterns for 50% Profits or More” FREE when you subscribe to Pi.

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

With investors watching global stock markets bounce up and down, many missed two really important profit generating events over the last two years.  The price of silver dipped below $14 an ounce as did shares of the iShares Silver ETF (SLV).   The second event is that the silver gold ratio hit 80, compared to a ratio of 230 only two years before.

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

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

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

You also learn from the Value Investing Seminar, our premier course, that we have been conducting for over 30 years.  Tens of thousands of delegates have paid up to $999 to attend.  Now you can join the seminar online FREE in this special offer.

This three day course is available in sessions that are 10 to 20 minutes long for easy, convenient learning.   You can listen to each session any time and as often as you desire.

The sooner you hear what I have to say about current markets, the better you’ll be able to cash in on perhaps the best investing opportunity since 1982.

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Tens of thousands have paid up to $999 to attend.

In 2018 I celebrate my 52nd anniversary in the investing business and 50th year of writing about global investing.  Our reports and seminars have helped readers have better lives, with less stress yet make fortunes during up and down markets for decades.  This information is invaluable to investors large and small because even small amounts can easily be invested in the good value shares we cover in our seminar.

Stock and currency markets are cyclical.  These cycles create extra profit for value investors who invest when everyone else has the markets wrong.  One special seminar session looks at how to spot value from cycles.  Stocks rise from the cycle of war, productivity and demographics.  Cycles create recurring profits.  Economies and stock markets cycle up and down around every 15 to 20 years as shown in this graph.

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The effect of war cycles on the US Stock Market since 1906.

Bull and bear cycles are based on cycles of human interaction, war, technology and productivity.  Economic downturns can create war.

The chart above shows the war – stock market cycle.  Military struggles (like the Civil War, WWI, WWII and the Cold War: WW III) super charge inventiveness that creates new forms of productivity…the steam engine, the internal combustion engine,  production line processes, jet engines, TV, farming techniques, plastics, telephone, computer and lastly during the Cold War, the internet.  The military technology shifts to domestic use.  A boom is created that leads to excess.  Excess leads to correction. Correction creates an economic downturn and again to war.

Details in the online seminar include:

* How to easily buy global currencies, shares and bonds.

* Trading down and the benefits of investing in real estate in Small Town USA.  We will share why this breakout value is special and why we have been recommending good value real estate in this area since 2009.

* What’s up with gold and silver?  One session looks at my current position on gold and silver and asset protection.  We review the state of the precious metal markets and potential problems ahead for US dollars.  Learn how low interest rates eliminate  opportunity costs of diversification in precious metals and foreign currencies.

* How to improve safety and increase profit with leverage and staying power.  The seminar reveals Warren Buffett’s value investing strategy from research published at Yale University’s website.  This research shows that the stocks Buffet chooses are safe (with low beta and low volatility), cheap (value stocks with low price-to-book ratios), and high quality (stocks of companies that are profitable, stable, growing, and with high payout ratios). His big, extra profits come from leverage and staying power.  At times Buffet’s portfolio, as all value portfolios, has fallen, but he has been willing and able to wait long periods for the value to reveal itself and prices to recover.

keppler asset management chart

This chart based on a 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Time is your friend when you use a good value strategy.  The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.

Learn how much leverage to use.  Leverage is like medicine, the key is dose.  The best ratio is normally 1.6 to 1.  We’ll sum up the strategy; how to leverage cheap, safe, quality stocks and for what period of time based on the times and each individual’s circumstances.

Learn to plan in a way so you never run out of money.  The seminar also has a session on the importance of having and sticking to a plan.  See how success is dependent on conviction, wherewithal, and skill to operate with leverage and significant risk.  Learn a three point strategy based on my 50 years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

The online seminar also reveals  the results of a $80,000 share purchase cost test that found the least expensive way to invest in good value.  The keys to this portfolio are good value, low cost, minimal fuss and bother.  Plus a great savings of time.  Trading is minimal, usually not more than one or two shares are bought or sold in a year.  I wanted to find the very least expensive way to create and hold this portfolio so I performed this test.

I have good news about the cost of the seminar as well.   For almost three decades the seminar fee has been $799 for one or $999 for a couple. Tens of thousands paid this price, but online the seminar is $297.

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

Save $468.90 If You Act Now

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but to introduce you to this online, course that is based on real time investing, I am knocking $102 off the subscription.  Plus you receive FREE the $29.95 report “Three Currency Patterns for 50% Profits or More”, the $39.95 report “Silver Dip 2017” and our latest $297 online seminar for a total savings of $468.90.

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Triple Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report, access to all the updates of the past two years, the two reports and the Value Investing Seminar right away. 

#1:  I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free, easy diversified investing.

If you are not totally happy, simply let me know.

#2:  I guarantee you can cancel your subscription within 60 days and I’ll refund your subscription fee in full, no questions asked.

#3:  You can keep the two reports and Value Investing Seminar as my thanks for trying.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential.

Subscribe to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, the “Platinum Dip 2018” and “Three Currency Patterns For 50% Profits or More” reports, and value investment seminar, plus begin receiving regular Pifolio updates throughout the year.

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

Gary

Multi Currency Risk


Multi currency risk is one reason to live in Ecuador… but just leaving the USA does not eliminate all the risk.

Ecuador’s currency is the US dollar, but the cost of living is so low that even if the dollar falls there is some protection against inflation.
The US dollar is not the only at risk currency.  Many currencies today are risky due to rising government expenditure.  Recent Multi Currency Updates, pointed out how I am totally divested in US dollars but have also have also dramatically reduced my euro holdings as well. Now I have switched my dollar loan to a euro loan. An excerpt from our multi currency updates explains why.

Jyske Global Asset Manager’s latest Market Update show how fast the world’s love affair for a currency (the euro) can end when it wrote:
The tragedy of the Greek budget deficit has now entered the 3rd act. What began as one nations budget deficit and its negative impact on the European Monetary Union (EMU), has now evolved into a multistate problem dragging the economies of the Iberian peninsula, Portugal and Spain, onto the stage. Market participants speculate that these 3 economies together will tone down the euro-zone’s overall growth in 2010 and thereby extending the current record low interest rate, making the US dollar more attractive – albeit the mighty dollar also has credibility problems.

The euro has, this far in 2010, lost 4.5% versus the US dollar, a scenery that very well could continue unless investors are convinced that these 3 troubled countries again can live up to the euro convergence criteria; demanding the euro-member nation’s “ratio of annual deficit to Gross Domestic Product (GDP)” not to exceed 3%. Greece currently has a budget deficit ratio of 12.7% to GDP, and a public debt expected to increase to 135% of GDP in 2011. A brutal consolidation plan has been approved by the European Commission, an ambitious plan to cut the Greek government spending and raise taxes in order to reduce the deficit ratio to below 3% of GDP by 2013.

Greece’s biggest labor union yesterday announced a 2nd mass strike this month, protesting against this major budget reduction, adding public pressure on the Greek Prime Minister George Papandreou to soften the necessary adjustments.

The European Central Bank (ECB) yesterday left its benchmark rate unchanged at 1%, later signaling that the bank is in no rush to hike rates. The ECB president Jean-Claude Trichet later tried to restore credibility to the euro, by comparing the overall situation in the euro area to a number of industrialized countries. However, he failed to persuade the market to look at the euro-zone as a whole, rather than focusing on the individual problems in Greece, Spain and Portugal. The market is now suggesting that Greece invite the International Monetary Fund (IMF) to help them getting back to fiscal responsibility, steering clear of any potential default scenery, and thereby calming the market nerves.

As it often goes in Greek tragedies, the story ends with a divine intervention, the “deus ex machina” in this case is manifested by the deep pockets of the IMF.

Recent Multi Currency Updates, pointed out how I am totally divested in US dollars but have also have also dramatically reduced my euro holdings as well.

This has a negative effect on my portfolio which had a US dollar loan protected by 5% a stop loss. Yesterday my portfolio manager at JGAM wrote:  Dear Gary   I hereby confirm that the stop loss on your USD loan has been hit. Your USD loan is now converted into Euro, at 137,78 (spot 137,99).
Monday, I’ll  look at changing that loan from euro to Swiss francs based on the thoughts of one of my advisers who wrote:  Perhaps it is better to borrow CHF instead of EURO if we are listening to the experts. They believe that the franc is overvalued. You can see this potential of a Swiss franc drop versus the euro in the five year euro Swiss franc chart (euro/chf) at yahoo.finance.com.  Two years ago a euro bought about 1.68 Swiss francs.  Last year it bought about 1.55 Swiss francs. Last week a euro bought only 1.46 Swiss francs.

multi-currency-chart
The stronger Swiss franc makes it hard for Swiss businesses to sell their products in Europe… their major trading partner.   The Swiss National Bank has repeatedly threatened to intervene to push the franc down. I had a dollar loan equal to about 5% of my portfolio.  The stronger dollar meant that as the dollar appreciated… it costs me more to repay the loan.  So I took my loss.
The impact of this problem may reach deeper than just Forex markets as explained in a New York Times news alert yesterday that said:

Sovereign Debt and Job Worries Push Stocks Down Sharply; Dow Industrials Fall 2.6%

Two of Wall Street’s biggest fears — a deteriorating employment picture and the debt woes facing foreign governments — re-emerged on Thursday, pushing stocks sharply lower. The Dow Jones industrial average fell 2.6% and briefly dipped below 10,000 before closing at 10,002.18 in preliminary figures; broader indexes slid nearly 3 percent.

Thursday’s trading brought hefty declines across the board, with a possible crisis in the European financial system overshadowing news of robust earnings for technology companies.

Read More:  http://www.nytimes.com?emc=na

Here is why this is happening.  Since 2008, wise investors have been investing in fairly risky investments expecting the world to recover from the 2007-2008 recession.

These investments though have been tentative because of fear that the basic global economic structure is taxed.
This chart from a recent article in the Economist entitled “Leviathan stirs again” shows why.
Though we know that US debt is huge… this chart helps us see that government spending as a per cent of GDP is higher in Canada,  France Britain and Germany.  Here are excerpts from this article:  The return of big government means that policymakers must grapple again with some basic questions. They are now even harder to answer.

FIFTEEN years ago it seemed that the great debate about the proper size and role of the state had been resolved. In Britain and America alike, Tony Blair and Bill Clinton pronounced the last rites of “the era of big government”. Privatising state-run companies was all the rage. The Washington consensus reigned supreme: persuade governments to put on “the golden straitjacket”, in Tom Friedman’s phrase, and prosperity would follow.

Today big government is back with a vengeance: not just as a brute fact, but as a vigorous ideology. Britain’s public spending is set to exceed 50% of GDP. (See chart above).

America’s financial capital has shifted from New York to Washington, DC, and the government has been trying to extend its control over the health-care industry. Huge state-run companies such as Gazprom and PetroChina are on the march.

Many European countries have devoted a high proportion of their GDP to public spending for years. And many governments cannot wait to get out of their new-found business of running banks and car companies. But the past decade has clearly produced changes which, taken cumulatively, have put the question of the state back at the centre of political debate.

The obvious reason for the change is the financial crisis. As global markets collapsed, governments intervened on an unprecedented scale, injecting liquidity into their economies and taking over, or otherwise rescuing, banks and other companies that were judged “too big to fail”. A few months after Lehman Brothers had collapsed, the American government was in charge of General Motors and Chrysler, the British government was running high street banks and, across the OECD, governments had pledged an amount equivalent to 2.5% of GDP.

Yet even before Lehman Brothers collapsed the state was on the march—even in Britain and America, which had supposedly done most to end the era of big government. Gordon Brown, Britain’s chancellor and later its prime minister, began his ministerial career as “Mr Prudent”. During Labour’s first three years in office public spending fell from 40.6% of GDP to 36.6%. But then he embarked on an Old Labour spending binge. He increased spending on the National Health Service by 6% a year in real terms and boosted spending on education.

In America, George Bush did not even go through a prudent phase. He ran for office believing that “when somebody hurts, government has got to move”. And he responded to the terrorist attacks of September 11th 2001 with a broad-ranging “war on terror”. The result of his guns-and-butter strategy was the biggest expansion in the American state since Lyndon Johnson’s in the mid-1960s. He added a huge new drug entitlement to Medicare. He created the biggest new bureaucracy since the second world war, the Department of Homeland Security. He expanded the federal government’s control over education and over the states. The gap between American public spending and Canada’s has tumbled from 15 percentage points in 1992 to just two percentage points today.

Another chart in that article shows how the American budget no longer makes sense.

The level of public spending is only one indication of the problem.

Looking at where the spending goes is another. In the case of America’s proposed 3.6 Trillion 2011 budget, defense and Social Security get an increased lion’s share of the money. Education… infrastructure and important activities get tiny amounts and less than before.

This suggests that despite the dollar’s current strength… long term we should be investing out of the dollar and not too much in the euro.

I have covered my dollar loan and in the process reduced my position in euro…. so my portfolio still has no dollars. It is just no longer short the greenback and has 5% (of the total portfolio) less euro.

Most portfolios should hold currencies around the world.

Sadly… US banks have little experience in helping multi currency investors.

This is why Jyske Banks upcoming Forex seminar in California may be helpful to you.

Pressures to reduce tax evasion and terrorism have stopped many overseas banks from serving US investors exactly when Americans need multi currency help them the most.

Fortunately for me and readers,  Jyske Bank in April 2008 set up Jyske Global Asset management as an Asset Management Company servicing US clients called JGAM. During the first 9 months JGAM  had to help their US clients cope with the worst financial crisis since the thirties.

They changed the investment strategy accordingly and over weighted their clinets portfolios in defensive investments.  During 2009 they became cautious optimists and began increasing the exposure towards equities and corporate bonds.

All investment decisions in JGAM are carried out by an Investment Committee who meet at least once a month.  Every member in the committee has responsibility for an asset class.

JGAM offers a number of portfolio’s depending on the size ranging from low risk to high risk… with or without leverage.

Since May of 2009 JGAM  also offers managed IRA accounts.

JGAM’s portfolios have performed very well in 2009  and the performance opf their client’s portfolios range from 10-33% depending on size and risk profile.

The IRA portfolios which were established in May 2009 has returned between 12% – 18%.

JGAM offers two types of multi currency service for US investors.

US investors can have a fully managed portfolio or have an advisory account where they make their own decisions.  For clients living in the US the advisory accounts come with many investment restrictions.

Managed portfolios are best for most US resident Americans.

Americans living outside the US can have advisory accounts without limitations regarding the investments.

Jyske Bank Copenhagen is the custodian for all JGAM accounts and for larger clients Jyske offers a VISA debit card associated with the account.

The VISA card comes with restrictions. It is a debit not credit card and normally requires a minimum balance of two times the spending limit PLUS  a minimum  investment account with JGAM of $50,000.

JGAM maintains a close relationship with its clients, makes regular visit to the US and provides a direct phone line for each client to an investment adviser.  JGAM also visits its clients in Ecuador as they participate in seminars that I and International Living conduct in Ecuador.

Beginning in 2009 JGAM also started conducting  their own seminars.

Last years seminar was in Naples Florida.

In April 2010 JGAM will conduct a Foreign Exchange seminar in Laguna Beach California.   In August JGAM will venture with Jyske Bank to conduct a seminar in Copenhagen.

JGAM is a fee based only company. Their only objective is to make money for their clients.   All JGAM employees, as with Jyske Bank,  are on a fixed salary WITHOUT BONUSES.

2009 was an extraordinary year and JGAM does not expect a repeat in 2010 as they expect central banks to begin withdrawing liquidity from the market.

JGAM does expect some interesting theme based investments in 2010. Clean energy will probably play an important role as governments across the globe focuses on the climate.  JGAM believes that the “climate aspect” has to be integrated into future investments, and that such a strategy can offer good returns.

They have already invested in iShares S&P Global Clean Energy Index.

This Exchange Traded Funds (ETF) aims to track the S&P Global Clean Energy Index and offers exposure to 30 of the largest publicly listed companies around the world that are involved in clean energy related businesses.

JGAM expects many country’s to tighten monetary policy (Australia and Norway have already started) which will create tension and volatility in the currency market.

JGAM plans to take advantage of these investment possibilities also in 2010.

Merri and I will join JGAM  at their April Laguna Beach seminar where you can be introduced to foreign exchange trading and investing in general. I will speak at the seminar and review my portfolio… why… what and what if.

The Laguna Beach forex seminar will be conducted 30 April  to 2 May 2010.

You will have the opportunity to:

• find out about JGAM’s BRAND NEW upcoming Managed FX Portfolio

• find out how JGAM  use’s currencies in our portfolios

• find out how you can take advantage of the profit
opportunities available with foreign exchange trading

• learn about and ask any FX questions that you didn’t dare to ask

• discuss key foreign exchange topics in greater depth than normal

• network with currency experts and JGAM’s experts.

For more details about the seminar contact Thomas Fischer at fischer@jgam.com

Subscribe to our multi currency updates here.

Gary

Join us March 11 to 14 2010. Learn how to increase your intelligence… reduce stress and speak Spanish  atSuper Thinking + Spanish Course, Mt. Dora, Fl.

Plus you can also on March 15  travel to Quito Ecuador.

March 16 Travel Quito to Cotacachi and attend one, two, three or all of of our Ecuador real estate tours.

March 17-18  North Andes, Imbabura & Cotacachi Real Estate Tour

March 19-20    Cotacachi Shamanic Tour

March 21  Travel Cotacachi to Manta

March 22-23   Manta & Mid Coast Real Estate Tour

March 24 Travel Manta to Cuenca

March 25-26 Cuenca Real Estate Tour

March 27  Travel Cuenca to Salinas

Mar. 28-29   Salinas & South Coast Real Estate Tour

The Ecuador airfare war makes it cheaper to get to Ecuador than ever before… and there is still time to enjoy great Ecuador tour savings.
You enjoy discounts by attending multiple seminars and tours. Here are our multi tour adventure discounts.Two Pack… 2 seminar courses & tours $998 Couple  $1,349 Save $149 on couple

Three Pack… 3 seminar courses & tours   $1399 Couple  $1,899 Save $98 single or $348 on a couple or more

Four Pack… 4 seminar courses & tours   $1,699 Couple $2,299 Save $98 single or $697 on a couple or more

Five Pack… 5 seminar courses & tours  $1,999 Couple $2,699 Save $496 single or $1,046 on a couple or more

Six Pack… 6 seminars courses & tours  $2,199 Couple $3,099 Save $795 single or $1,395 on a couple or more

Even Better.  Greater Savings. Our 2010 International Club membership allows you and a guest to attend as many of the 51 courses and tours we’ll sponsor and conduct in 2010  (fees would be $40,947 for all these courses individually) is only $3,500.

If you join the International Club, the entrance fee for 2010 is $3,500.  Your attendance fees at all courses will be waived. You and a guest of you choice can attend courses worth $40,947.You can calculate the savings as our schedule of all 2010 courses here.
International Club 2010 Membership $3,500 Enroll here

International Club Three Monthly Payments of $1,190

Our Spring 2010 schedule starts:

Apr. 12-15   Ecuador Export Tour ($499 or couple $749)
Apr. 17-18   Imbabura Real Estate Tour ($499 or couple $749)
Apr. 20-21  Coastal Mid Coast Real Estate Tour ($499 or couple $749)
Apr. 23-24  Quito & Mindo Real Estate Tour ($499 or couple $749)
Apr. 26-27  Cuenca Real Estate Tour ($499 or couple $749)

The multi tour discounts remain effective for the April tours.

Read the entire article Leviathan stirs again


Jyske Global Asset Management Seminars


Jyske Global Asset Management seminars in 2010 may help your portfolio survive and grow.

Sadly at a time when American investors need more multi currency investments and a better global view, overseas banks are increasingly restricted from helping US investors.  Anti tax evasion, money laundering and anti terrorism regulations have created so many regulations on banks that increasing numbers of overseas banks have stopped accepting US investors.

Yet at this crucial time when the US dollar has great fundamental weakness, US banks have little experience in helping its clients invest in other currencies.

This is why Jyske Banks upcoming April 2010 Forex Seminar in California may be helpful to you.

multi-currency-debt

I talked about green investing with these speakers at the Jyske 2009 Naples seminar.  Here I am with other speakers, Left to right: Samuel Rachlin,  Rich Checkan, Steve Blumenthal, Joe Cox, John Mauldin, Gary Scott, Lars Stouge. Thomas Fischer Moderating.

Fortunately for me and readers,  Jyske Bank in April 2008 set up Jyske Global Asset management as an Asset Management Company servicing US clients called JGAM.

During the first 9 months JGAM  had to help their US clients cope with the worst financial crisis since the thirties.

They changed the investment strategy accordingly and over weighted their clinets portfolios in defensive investments.  During 2009 they became cautious optimists and began increasing the exposure towards equities and corporate bonds.

All investment decisions in JGAM are carried out by an Investment Committee who meet at least once a month.  Every member in the committee has responsibility for an asset class.

JGAM offers a number of portfolio’s depending on the size ranging from low risk to high risk… with or without leverage.

Since May of 2009 JGAM  also offers managed IRA accounts.

JGAM’s portfolios have performed very well in 2009  and the performance opf their client’s portfolios range from 10-33% depending on size and risk profile.

The IRA portfolios which were established in May 2009 has returned between 12% – 18%.

JGAM offers two types of multi currency service for US investors.

US investors can have a fully managed portfolio or have an advisory account where they make their own decisions.  For clients living in the US the advisory accounts come with many investment restrictions.

Managed portfolios are best for most US resident Americans.

Americans living outside the US can have advisory accounts without limitations regarding the investments.

Jyske Bank Copenhagen is the custodian for all JGAM accounts and for larger clients Jyske offers a VISA debit card associated with the account.

The VISA card comes with restrictions. It is a debit not credit card and normally requires a minimum balance of two times the spending limit PLUS  a minimum  investment account with JGAM of $50,000.

JGAM maintains a close relationship with its clients, makes regular visit to the US and provides a direct phone line for each client to an investment adviser.  JGAM also visits its clients in Ecuador as they participate in seminars that I and International Living conduct in Ecuador.

Beginning in 2009 JGAM also started conducting  their own seminars.

Last years seminar was in Naples Florida.

The 115 delegates reported that they really gained from listening to what we had to say and…

brazilian-bond-distortion

talking among themselves during the coffee brakes and at meals.

brazilian-bond-distortion

One benefit of these seminars is talking to an overseas banker.  Here I am at the seminar  with my Jyske account executive Anders Nielsen.

brazilian-bond-distortion

In April 2010 JGAM will conduct a Foreign Exchange seminar in Laguna Beach California.   In August JGAM will venture with Jyske Bank to conduct a seminar in Copenhagen.

JGAM is a fee based only company. Their only objective is to make money for their clients.   All JGAM employees, as with Jyske Bank,  are on a fixed salary WITHOUT BONUSES.

2009 was an extraordinary year and JGAM does not expect a repeat in 2010 as they expect central banks to begin withdrawing liquidity from the market.

JGAM does expect some interesting theme based investments in 2010. Clean energy will probably play an important role as governments across the globe focuses on the climate.  JGAM believes that the “climate aspect” has to be integrated into future investments, and that such a strategy can offer good returns.

They have already invested in iShares S&P Global Clean Energy Index.

This Exchange Traded Funds (ETF) aims to track the S&P Global Clean Energy Index and offers exposure to 30 of the largest publicly listed companies around the world that are involved in clean energy related businesses.

JGAM expects many country’s to tighten monetary policy (Australia and Norway have already started) which will create tension and volatility in the currency market.

JGAM plans to take advantage of these investment possibilities also in 2010.

Merri and I will join JGAM  at their Laguna Beach seminar where you can be introduced to foreign exchange trading and investing in general. I will speak at the seminar and review my portfolio… why… what and what if.

The Laguna Beach forex seminar will be conducted 30 April  to 2 May 2010.

You will have the opportunity to:

• find out about JGAM’s BRAND NEW upcoming Managed FX Portfolio

• find out how JGAM  use’s currencies in our portfolios

• find out how you can take advantage of the profit
opportunities available with foreign exchange trading

• learn about and ask any FX questions that you didn’t dare to ask

• discuss key foreign exchange topics in greater depth than normal

• network with currency experts and JGAM’s experts.

For more details about the seminar contact Thomas Fischer at fischer@jgam.com

Gary