Tag Archive | "Tokyo Stock Exchange"

Anti Success

Anti success…history suggests…. becomes the norm.   This appears to be the state of current economic policy as well.

Is this a formula for success… a 10% loss over almost 30 years?

Jaanese Index

Japanese Nikkei from www.finance.yahoo.com

(Click on photos to enlarge)

In the late 1980s the Tokyo Stock Exchange and Japanese real estate market were hot.  Japan was THE place to be.  Michael Creighton wrote the novel “Rising Sun” about how Japan was going to buy up all… well at least a lot of the US.   The Nikkei Stock Index skyrocketed and hit an all-time high in December 1989  of 38,957.44.   Downtown Tokyo commercial property was selling for $20,000 a square foot. Real estate in Tokyo alone was reckoned to be worth more than all the land in California.

Japanese banks granted increasingly risky loans.

Sound familiar… bubbles in the stock and real estate markets sucking the bank into bad deals?

Then as the chart above shows the market inevitably crashed.  Tokyo commercial prices dropped 99%.  Japanese home prices fell 90%. The Japanese government jumped in, flooded the market with cash… dropped interest rates to almost zero to get things stimulated.

By March 10, 2009, 20 years later the Nikkei Stock Index reached a 27-year low of 7054.98.   Today almost 30 years later the Nikkei is at 9925 still 10% below its 1984 level.

Some stimulation.  That plan worked well.

This is one reason why our International Investing Seminars offer unusual ideas in out of the way places.

New River

Our Oct 5-6-7, 2012  Super Thinking + International Investing and Business Seminar will be in this remote conference center, surrounded by….

New River

a forest… at the New River community room.

We meet in out of the way places to get away from every day thinking, because despite Japan’s policy failure, Europe and the US have adopted similar policies to stimulate their economies after the 2007 – 2008 US economic crash.

Thank God for China and its economic expansion to at least keep the global financial train chugging along.

Yet Jyske Global Asset Management’s (JGAM) recent market assessment does not bode well for that continued salvation.

JGAM wrote in its latest market update:   On fundamental economic data, the past week didn’t offer news that could change the overall picture of a global economy in poor condition. Most significant were disappointing purchasing managers’ data (PMI) from China and the eurozone. PMI from China was preliminary, but indicates a slowing economy. Especially, the PMI readings suggest that the eurozone is in recession and will continue to be so for the rest of the year. Also, FedEx offered a note of caution as it cut its full-year earnings forecast. FedEx is as a global logistics company seen as many as a proxy for global economic activity.

The Japanese have not gained either because they are still holding onto their same dismal formula.

JGAM says: Therefore, it came as no surprise that Bank of Japan this week decided to join the central banks in the US and the eurozone by easing monetary policy. Tokyo said that it will boost its asset-buying and loan program. Initially, this announcement caused a drop in the value of the yen (JPY), but the effect was short-lived.

The Europeans have also followed the same failed policy as JGAM notes:  On the currency markets the euro (EUR) could not sustain the strength gained after ECB’s recent announcement of a bond-buying program and hence, EUR has fallen back below 130 US dollar (USD).

The fundamental problem remains that governments do whatever they will do poorly compared to private enterprise.  So when the government tries to stimulate the economy they do in a way that is aimed at attracting the most votes… not in a way that actually works.  Political thought is short term and this does not bode well when long term resolutions are sought.

A September 25, 2012 New York Times article “Test for Obama as Deficit Stays Over $1 Trillion”  by Jackie Calmes shows that this problem of bad government spending and interference is not over.

Here are excerpts: Four years ago, Barack Obama campaigned for president on a promise to cut annual federal budget deficits in half by the end of his term. Then came financial calamity, $1.4 trillion in stimulus measures and a maddeningly slow economic recovery.

Now, despite small annual improvements, the deficit for the fiscal year that ends on Sunday will surpass $1 trillion for the fourth straight time.

Mr. Romney is proposing to reduce the deficit and encourage economic growth by substantially shrinking the government — unrealistically so, in the judgment of many budget experts — while further cutting taxes and increasing spending on the military.

Mr. Obama wants to combine spending cuts and tax increases on upper-income households to close the fiscal hole without fundamentally reducing the role of government or altering the government guarantees at the heart of Medicare, Medicaid and Social Security.

But long-term projections are notoriously unreliable. And in any case, budget analysts say that if the nation’s goal — at a moment when the economy is still shaky — is to start moving seriously toward fiscal balance, neither approach is likely to prove equal to the problem.

The plans of both, analysts say, would leave the public debt continuing to rise over the next decade as a percentage of gross domestic product, the measure that economists favor.

In other words… neither Romney nor Obama can keep their pre election promises and even if they did… the efforts would not work because the entire concept is flawed.

By thinking differently, we can see ways to profit in these stagnant economies.

For example during the Japanese crash our portfolio and many at Jyske Bank made 40, 50 even 100% gains in a year because they were leveraged with Japanese yen loans. Investors borrowed low…yen at 3% and less and made extra profits  and deposited high… bonds in Brazil and Mexico paying 10%… 12%, even 14% and more.

The positive carry (difference between loan cost and interest return) was pure profit plus forex profits were made as well.

This is still possible but with other type loans… though leverage does increase the risk of volatility and loss as well as higher profits.

JGAM’s model portfolios offer opportunity from low cost loan leverage now also.

Here were the portfolios before recent additions.

Here are the portfolios. Click on the photos to enlarge.

JGAM Low Risk Portfolio

Jyske JGAM Low Risk

Jyske JGAM Low Risk

JGAM Medium Risk Portfolio

medium risk w/o leverage

JGAM Medium Risk Portfolio With Leverage

Jyske JGAM Medium Risk

JGAM High Risk Portfolio

Jyske JGAM High Risk Portfolio

EUR exposure and added yield
During the period 6-12 September, 2012 the Investment Committee decided on a number of new investments that have now been carried out. We decided to expand our equity universe with two European equities and to re-allocate our fixed income portfolio in order to obtain a higher yield while maintaining a moderate duration.
SAP AG (Germany)
Prysmian SpA (Italy)
6.221% Telefonica Emisiones 03.07.2017 (USD)
6.25% Vale Overseas Limited 23.01.2017 (USD)
5.55% Alcoa Inc. 01.02.2017 (USD)

You can direct questions to me or contact Thomas Fisher of JGAM at fischer@jgam.com

Non US investors should contact René Mathys of Jyske Private Bank  at mathys@jbpb.dk

Or you can join Thomas Fischer and me… our Ecuador export expert, plus a tax and pension specialist at our October 5-6-7 seminar to learn unusual ideas on how to protect your savings… gain extra profit and make sure you have a never ending income.

We’ll analyze the Prysmian Group, a leading player in the industry of high-technology cables and systems for energy and telecommunications. This company has with sales of nearly 10 billion dollars in 2011.

We’ll see how the Italian connection in this global company, (subsidiaries in 50 countries, 97 plants, 17 R&D Centers and about 22,000 employees) creates special value.  In addition you’ll see how this technology creates opportunity here in Small Town USA.

The seminar will be near Scottville, North Carolina (founded by an ancestor perhaps!)

New River

on the New River.

New River

New River at the General Store

New River

General Store.

New River

House in Scottville

We’ll see why due to new technology and old regulations there is special opportunity in this part of Smalltown USA.

Those interested can view real estate in the area.

There are four places left for the seminar below so enroll asap.

New York Times article “Test for Obama as Deficit Stays Over $1 Trillion”

Times article “Ritzy Retail”

International Gold Review

This international gold review is a followup to yesterday’s message about maintaining control over your wealth.

Jyske Global Asset Management just changed its gold position so we should take a new look at gold.

Most major governments have deficits in their budget.  This forces them to borrow or print money that is not backed by productivity.  When this happens long term, the purchasing power of  money created in this way, loses purchasing power.

Any form of exchange must possess five qualities to be considered real money that will store value and purchasing power.  These five values that money must be are durable, divisible, portable, desirable and rare.

When a government creates a currency with no production to back it, then that currency loses its rarity and its purchasing power falls.

Gold is one long term way to combat the risk of a falling currency.

Gold is real money because it has all five qualities of real money.

Make no mistake… when it is rare… paper money is better money than gold… because it is more divisible and portable.   Electronic money available in a credit card is even better… the most portable and divisible of all… IF THE CURRENCY MAINTAINS ITS RARITY.

Regretfully for the dollar, euro, yen and many other major currencies, this has not been the case…  so gold still has a place in our portfolios.  Gold as a commodity fits the five standards best of all and for thousands of years has been used as a form of money.

In a moment we’ll look at what might happen to the price of gold in the months ahead.

First, because many readers have asked about bringing gold into Ecuador, I checked with out attorney Andres Cordova in Quito.  Here is his reply: Dear Gary:  After reviewing applicable legislation, we’ve found that there is no restriction on the introduction of gold or coins to Ecuador.

The introduction of such, however, does carry a tariff that is to be charged in accordance to weight or monetary amount. Furthermore, there’d need to be a customs filing in which the gold presentation is to be declared, such as ingots, jewelry, dust, etc. Furthermore, an explanation of where does such gold / coins come from needs to be consigned in such form. If gold is brought with the traveler, then such must be specified in the customs form that each passenger gets before landing in Ecuador.

Gold and coins would pay a tariff of 0.5% and 12% VAT.  However, if we could know exactly what the person intends on bringing to Ecuador we can better review applicable taxes and tariffs. Best regards,  Andres

For those that want physical gold in Ecuador, there is gold mining in Ecuador and are gold dealers. I do not know any  personally. But there are many places with signs that they buy gold. I am researching this and will post a password protected message for our Ecuador Living subscribers.  You can subscribe to Ecuador Living so you’ll receive this report when it is published.

There are three other ways to hold gold than in bullion and coins. These alternatives are less expensive than bullion and avoid the hassle and dangers of carry heavy, valuable precious metals on your person and across borders.  Plus they avoid this Ecuador tax.  We’ll review these options after we examine what might happen to gold’s price in the days ahead.

This article is from the Asset Strategies Alert:

When gold breached the $1,000/oz mark in February of 2008, the mass media were full of reports of unprecedented coin demand and long wait times for bullion buyers. You couldn’t open the paper without seeing a piece about the gold rush.

Although the press has now set gold aside for hotter stories, I can tell you demand for gold coins continues at unprecedented levels worldwide, and production is still struggling to keep up. Take a look at these recent reports:

Sales of the Austrian Philharmonic gold coin soared 544% in the first two months of 2009 (vs. the same period the year before), with production at the country’s mint running quadruple its usual volume.

The demand for Krugerrands is at its highest level since 1986. The South African refinery recently doubled production of blank gold coins to 20,000 ounces per week.

China, now the fastest-growing market for gold, saw 2008 sales (measured in dollars) rise by 50% over the year before – and total sales in January 2009 were one billion yuan (US$146 million), 30% more than all of last year.

The U.S. Mint sold 193,500 one-ounce gold Eagles in the first seven weeks of 2009 – equaling the number shipped in all of 2007 and about matching the first half of 2008.
Russia’s Sberbank says it has “never seen such strong demand for investment coins.”

Swiss banks just reported they are running out of secure storage space for gold bullion held by investors and institutions in their vaults.

I have worked with Michael Checkan at Asset Strategies International, Inc. for many decades and any time I think of gold, I think of him.

Michael’s firm offers one of the the three gold alternatives… Precious Metals Certificate Programs.

Precious metals can be purchased and stored on your behalf through the Perth Mint Certificate Program.  This program offers storage for gold, silver, and platinum at the Perth Mint in Western Australia. This is the only government guaranteed precious metals program in the world… fully backed by the government of Western Australia, and has operated continuously from the same location for over 100 years.

This is an easy and low cost way to hold metals overseas.  You can learn more about these certificates from Asset Strategies with a toll-free call 1-800-831-0007 or 301-881-8600 or visit their website www.assetstrategies.com.

See an interview with Thomas Fischer of Jyske Global Asset Management and Rich Checkan of Asset Strategies here.

Jyske Global Asset Management (JGAM) agrees that gold is a good asset now.  All of JGAM’s portfolios  were overweight in gold last time I reviewed them. . The low risk portfolio had about 5% in gold…. medium risk about 9% and the high risk portfolios were holding about 15% gold.

However JGAM does not invest in physical gold or even undivided bullion. They invest in the ETFS Physical Gold shares.  This is a share traded mainly on the London Stock Exchange  (code PHAU) but also trades on Deutsche Borse (Xetra), NYSE-Euronext, and Borsa Italiana.

The ETFS Physical Gold provides an easy, simple, cost-efficient and secure way to access the
precious metals market.  This share provides a return equivalent to movements in the
gold spot price less fees because the shares are backed by physical allocated metal held by the
Custodian (HSBC Bank USA N.A.).  All the gold held are good delivery bars.

This is a very practical way to own gold, because you can buy the shares direct from any stock broker.   The shares are transferable or sold in the market.  These shares trade on the stock markets just like an equity and their pricing and tracking operate similar to an Exchange Traded Fund except the share tracks the price of physical gold, not a portfolio of equities.

Here is the five year simulated price of these shares from the fund’s fact sheet.


Other ETfs that invest in physical gold are SPDR Gold Shares (GLD) listed on the New York Stock Exchange  in November of 2004, and traded on NYSE Arca since December 13, 2007, as well as  Singapore Stock Exchange, Tokyo Stock Exchange and the Stock Exchange of Hong Kong.

Here is a chart of the SPDR five year performance.


Another ETF that invests in gold is iShares Comex Trust (IAU).

I have just competed a full gold report for our multi currency subscribers that provides a  third alternative to gold bullion and coins.

In the multi currency gold report, I describe the recent change in JGAMs gold position, the profit they made and how Jyske Bank Private Bank and Jyske Global Asset Management can buy gold alternatives.

You can subscribe to our multi currency service and get this report here.

Deficit spending by the major governments around the world has reduced the integrity of the world’s currency system. All currencies risk losing purchasing power.  Gold long term is one way to combat this risk.


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.

Sept. 17-21 Ecuador Super Thinking + Spanish Course

Sept. 23-24 Imbabura Real Estate Tour

Sept. 25-28 Ecuador Coastal Real Estate Tour

Join us with Jyske. Learn more about global investing, how to have an international business and diversification in Ecuador at the seminar.

Oct. 9-11 IBEZ North Carolina with our webmaster  David Cross & Thomas Fischer of JGAM

October 16-18 Ecuador Southern coastal tour (early sign up before Sept. 1, $499 per person).

Oct. 21-24 Ecuador Import Export Tour

Oct. 25-26 Imbabura Real Estate Tour

Nov. 6-8 IBEZ Ecuador Seminar

Nov. 9-10 Imbabura Real Estate Tour

Nov. 11-14 Ecuador Coastal Real Estate Tour

Attend any two Ecuador seminar 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