Tag Archive | "value investments"

Storing Wealth Made EZ


Storing Wealth Made EZ

mcsi indices

These charts from Bloomberg.com of the Morgan Stanley World Index and

mcsi indices

and the MSCI ALL World Index shows how risky the economic world has become.

The MSCI World is a stock market index of over 6,000 ‘world’ stocks. It is maintained by MSCI Inc., formerly Morgan Stanley Capital International, and is often used as a common benchmark for ‘world’ or ‘global’ stock funds.

The index includes a collection of stocks of all the developed markets in the world, as defined by MSCI. The index includes securities from 24 countries but excludes stocks from emerging and frontier economies making it less worldwide than the name suggests.

A broader index, the MSCI All Country World Index (ACWI), incorporates both developed and emerging countries.

The volatility of these markets over the past five years shows how we have edged into an increasingly risky world.

Here are three ways to store wealth in this high risk world.

Over the past four decades global economic tensions in the USA and Europe have twisted like gigantic tectonic plates colliding at seismic faults.  Government and private debt, aging populations and huge, unfunded future obligations have slowly but relentlessly built and distorted fiscal reality while a younger emerging world grew bold and rich through low cost labor.

Finally this monetary stress unleashed an earthquake of financial reform that threatens every financial aspect of the modern world.  Banks, stocks, bonds, government debt and most currencies have all been thrown into stagflationary shock…where inflation rips purchasing power apart at the same time that wages and employment opportunities fall.

This shift has put almost every investment at risk and raises the question, “How can one store wealth in such an atmosphere?”

High Risk World

Most investments are now at risk because most savings and capital come in the form of a promise. Stocks are a promise of shared earnings and growth in business. Bonds are a promise of money used and returned with interest. Bank and savings accounts are a promise of money kept and cared for to be returned at the owners’ desire.

Currencies are promises of products and services delivered later from products and services given now.

We are in times when few promises… especially those made in terms of paper currency can be kept.

Traditionally Swiss francs and precious metals, especially gold and silver are the favored stores of wealth.  These investments should usually play a part in portfolios as insurance. 5% to 10% of a portfolio in metals and hard currencies is a general rule of thumb.

These hard assets were good ideas for speculation a year or two or even a few months ago.  Not when they are at all times highs though. History suggests that their high price puts their promise as a store of value at risk. In previous monetary corrections when the price of Swiss francs, gold and silver exploded upwards… the peak was followed by a harsh… extended downfall.

Storing Wealth Made EZ

Today investors and businesses need a new mindset for storing wealth…a thought pattern that leads in new ways to  make a relentless search for diversification, necessity and value.

Here are some tips that lead to professional investing who can help you make it easy to zero in on three ways to store of wealth in the high risk years ahead.

Diversification  –  Non Correlated Investments

The first way to store value is to look beyond stocks, bonds and certificates of deposit .

Stocks, bonds and certificates of deposit are the traditional ways that most investors and savers store wealth.

These three asset classes usually offer non synchronized opportunity. Their movements are connected.  When cash investments make sense… shares and bonds may not be such good buys.  When shares are rising… bonds are falling and vice versa.

When economic and fiscal problems create systemic risk… as they are now,  the entire system is shaken and all three asset classes… stocks, bonds and cash may be at risk.

One non correlated type of investment is a managed currency or forex speculation investment.  Such investments are aimed at profiting on currency parity fluctuations which have little to do with stock or bonds so these fluctuations are not correlated to any of these asset classes.

An example is the Managed Forex Account offered by Jyske Global Asset Management in Copenhagen. These accounts offer a fundamentally managed forex service where every investor has a separate account.  This is a very low leverage service with a maximum of four times leverage depending on each individual’s risk profile.

Experienced JGAM currency traders borrow currencies they believe will fall in value and invest the loans in currencies they believe will rise versus the borrowed currency.  Then they use 24 -7 overview and stop losses to cut losses short and to let profitable positions ride.

Borrowed Currencies

Current JGAM is leveraging the account with one third US Dollar, one third Japanese yen and one third euro loans.

The dollar is weak in JGAM’s opinion because the Federal Reserve (Fed) is under no pressure to normalize policy any time soon and will keep the interest at the very low level until mid-2013.  This announcement makes the US dollar (USD) attractive as a funding currency, which should have a negative effect on the USD.

They have borrowed euro because on the other side of the Atlantic the eurozone has many unsolved debt challenges, which create a distrust of the euro. This distrust make investors sell euro (EUR).  The challenge is that both currencies cannot weaken at the same time (verus each other).

As of mid August 2011 Morgan Stanley’s (MS’s) EUR/USD target for Q3 is 1.40 and Bank Credit Analysts (BCA) predict 1.55. It is currently trading at 1.4240.

The Japanese yen (JPY) is a borrowed currency because it has strengthened so much due to the turmoil in the global economy. MS and BCA are both arguing that JPY inflows will remain substantial as long the uncertainty is intact.

However, Bank of Japan (BoJ) has intervened several times (sold JPY) in order to stem the JPY rally. BoJ has announced that it has increased the amount of its asset purchase program, which creates plenty of ammunition for further interventions. BCA is bullish on the JPY while MS is neutral to bearish.

Because of the current situation with financial uncertainty and divided expectations, JGAM decided to continue with the current loan mix, consisting of three equally weighted funding currencies.

Diversification is JGAM’s strategy and their existing currency positions (August 20, 2011) are:

The Singapore dollar (SGD) which has retracted upward lately (weaker SGD) and broke the 1.2100 resistance level against USD. However, JGAM remains confident of the SGD fundamentals and maintains their long SGD and short USD position. They are keeping their stop loss order at USD/SGD 1.2740.

The Canadian dollar (CAD) has suffered the past month and moved from 0.9433 to 0.9850 against the USD.  The sudden change in sentiment happened on the back of softening economic data and in generally weaker commodity currencies. However, the Canadian economy is outperforming its southern neighbor and Bank of Canada (BoC) should gradually normalize fiscal policy while odds of additionally Fed easing are rising. The diverging monetary policies should over time push USD/CAD lower (stronger CAD). Therefore, JGAM has kept this position.

Learn more about JGAM’s forex account for Americans from Thomas Fischer at fischer@jgam.com

Learn about Jyske for non Americans from René Mathys at mathys@jbpb.dk

 (GRV) Mars Hill Global Relative Value ETF

Another non correlated investment is the Mars Hill Global Relative Value ETF (GRV).   The goal of this ETF is to generate consistent positive returns in excess of the average annual return of the MSCI World Index using  a “Relative Value” approach to identify long positions within the major global regions that they expect will outperform the Index and an equal amount of short positions within the major global regions that they expect will underperform the Index.

This core long/short portfolio construction is designed to mitigate the directional influence of the global equity markets and instead seeks to profit from the spread between its long and short positions, which are prevalent throughout flat, rising and falling market environments.

This ETF reduces market exposure as its investments are fully hedged like a hedge fund, but as a New York Stock Exchange traded share has an open book so investors can see the high degree of risk management. The short positions offer a hedge against a decline in global equity markets, while concurrently offering an opportunity to even generate positive returns in such an environment.

The Fund employs an equal amount of long and short positions regardless of market direction so can profit whether the market is on a rise or fall.

The Fund’s Relative Value approach looks for attractive positions that bring added return and liquidity for the risk.

Because of the long/short strategy, the performance positions create a return stream that is expected to have a low correlation with both stocks and bonds.

This GRV ETF invests in many countries, sectors and industry groups to provide global diversification.

Necessity – Invest in Agriculture and Water

farm water

One reason Merri and I purchased our Blue Ridge farm is an abundance of…

farm water

spring fed water and dozens and dozens of artisian wells.

The second way to store wealth is in necessities.   No matter the state of the economy… basic necessities remain… food clothing and shelter.

Clothing perhaps can wait… but eating and drinking cannot.

Water is becoming a scarce resource yet investment in water treatment and infrastructure has been low due to artificially low prices.  This trend is changing as supply and demand realities  overwhelm political expediency.

Water is becoming a leading global commodity as the world population increases and increases the demand for clean water.  Global water demand has increased almost twice as fast as population growth in recent years.

Global population growth and water withdrawals that are already 275% higher now than 50 years ago add trillion dollar potential to this industry.

Modern farming creates the greatest demand on water for agricultural irrigation, so investments in water also are investments in food.

Investments in shares of water processing companies can provide multi currency diversification.

For example, holding just these three shares diversifies savings globally into dollars, euro and Singapore dollars!

American Water Works Co. – USA –US Dollar. This company  provides drinking water, wastewater and other water-related services in multiple states and Ontario, Canada. The Company’s primary business involves the ownership of regulated water and wastewater utilities that provide water and wastewater services to residential, commercial and industrial customers. Symbol NYSE: AWK.

 

Veolia Environnement S.A. – France – Euro.  This firm operates utility and public transportation businesses. The Company supplies drinking water, provides waste management services, manages and maintains heating and air conditioning systems, and operates rail and road passenger transportation systems.  Veolia ADRS symbol at NYSE:VE

Hyflux  – Singapore – Singapore Dollar. Hyflux is a leading provider of integrated water management and environmental solutions with operations and projects in Singapore, Southeast Asia, China India, Algeria, the Middle East and North Africa. Symbol OTC: HYFXF

water share chart

This finance.yahoo.com chart of the Water Shares Index shows that water shares are down… a short term fear based drop on a long term fundamentally sector.

For greater diversification several exchange traded funds are designed to give a diversified investment in water.

PowerShares Water Resources Portfolio (NYSEArca: PHO)

PowerShares Global Water Portfolio ETF (NYSEArca: PIO)

Guggenheim S&P Global Water Index (NYSEArca: CGW)

First Trust ISE Water Index Fund (NYSEArca: FIW)

Necessity – Shelter – Real Estate

The collapse of American real estate prices combined with rising construction costs and the fact that the USA is growing faster than any other industrialized country in the world creates an outstanding store of wealth.

Studies have shown that Americans today occupy almost 20% more developed land (housing, schools, stores, roads) than 20 years ago.  By the late 1990s, 1.7 acres — the equivalent of about 220 parking spaces or 16 basketball courts — were developed for every person added to the population.

As America’s population expands from 300 to 400 million people the next 100 million people will at present standards create 73 million new jobs, about 70 million new homes and 100 billion square feet of non-residential space.

The overhang from the overbuilding in the mid 2000s cannot supply this demand for long.

Extraordinarily low US property prices are already attracting increasing numbers of people from around the world.  For example, Visit Florida reported that visitor numbers for the second quarter of 2009 were up 6.9% over the same period as last year to about 21 million visitors.  Estimates show that US visitors increased 5.3%, overseas visitors increased 17.3% and Canadian visitors 18.4%.  About 82 million visitors spent 60 billion dollars in 2010.

One way to invest in US real estate is with a US real estate ETF.  An August 5, 2011  ETF Digest article entitled “Top 10 Real Estate ETFs” points out that: “There is currently an expanding list of nearly 20 ETFs oriented to primarily REITs (Real Estate Investment Trusts) with more on the way”.

Included in the list are:

Vanguard REIT ETF(VNQ_) follows the MSCI US REIT Index which covers about 2/3 of all REITs in the U.S. market.

iShares DJ U.S. Real Estate ETF(IYR_) follows the Dow Jones U.S. Real Estate Index which measures the real estate industry primarily through REITs.

SPDR DJ Wilshire REIT ETF(RWR_) follows the Dow Jones U.S. Select REIT Index consists primarily of REITs in commercial real estate.

Good Value Equities

The third way to store value is with good value equities. This is traditionally the best long term investment.

A long term multi currency research project by asset allocation expert, Ibbotson Associates, looked at various returns over 95 years of differing assets classes under varied conditions.

The asset classes we bonds, T-bills. Equities, Housing and Silver. Over the entire 95 years the return was:

Equities: 11.9% per annum

Housing: 6.7% per annum

Bonds: 4.8% per annum

T-Bills: 4.6% per annum

Silver: 4.2% per annum

However the results were very different when the economy was split and viewed in five different conditions, Stable. Moderate Inflation, Rapid Inflation and Deflation.  Equities outperformed all asset classes except during rapid inflation when silver performed better and deflation when bonds were the best bet.

If stagflationary trends continue (inflation and recession) the economic slowdown will add a drag to the industrial and demand side of metals making them suspect as a dependable store of value.

The easiest way to diversify in equities globally is via an ETF  that tracks one of MSCI (Morgan Stanley Capital Index) Indicies.

The MSCI World is a stock market index of over 6,000 ‘world’ stocks. It is maintained by MSCI Inc., formerly Morgan Stanley Capital International, and is often used as a common benchmark for ‘world’ or ‘global’ stock funds.

The index includes a collection of stocks of all the developed markets in the world, as defined by MSCI. The index includes securities from 24 countries but excludes stocks from emerging and frontier economies making it less worldwide than the name suggests.

A broader index, the MSCI All Country World Index (ACWI), incorporates both developed and emerging countries.

Here are two US traded ETFs that give various global equity diversification.

The iShares MSCI ACWI Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI All Country World Index.

The Rydex MSCI EAFE Equal Weight ETF seeks investment results generally corresponding to the price + yield performance of the MSCI EAFE Equal Weighted Index. The MSCI EAFE (Europe, Australasia, Far East) Equal Weighted Index equally weights the securities in the MSCI EAFE Index (MSCI EAFE Cap-Weighted Index), which is a free float-adjusted market cap index that is designed to measure the equity market performance of developed markets, excluding the USA & Canada.

Having enjoyed global financial stability for almost 60 years, the mindset of most investors has become used to stocks bonds and CDs.  These investments have been considered as safe as the Western governments in an expanding industrialized work.

Not since the 1930s, when all financial institutions were questioned, has so much of the global economic system been shaken. This puts all stocks, bonds and cash instruments at greater risk.   The three ideas above and many professional money managers can help make the process of storing wealth in this risky world safer and easy.

Gary

Learn how to get my full  Multi Currency report here.

You can learn more about ETFs from Morgan Hatfield at Ruggie Wealth. Her email is mhatfield@ruggiewealth.com

Tom Ruggie of Ruggie Wealth was featured on the Flashpoint Talk Show last week.

ruggie-wealth

See Tom Ruggie on Flash Point here.

Join Merri, me and Thomas Fischer from JGAM in North Carolina this October.

 

The Value of Good Value Investments


Looking for good value in investing and business is a way to work through all the noise.

czech-equity-market

See below which equity market has had this performance and why it may be the best valued bourse in the world… plus a good value share traded on that exchange.

First, more on the value of good value investments.

Yesterday’s message War on Four Fronts looked at potential problems that could have a profound impact on our social and economic world.

If the wars on the southern border of the USA and in Korea were both to expand… what could happen and what can we do about it?

First, let’s recognize that a lot of extra money… that the government does not have… will be spent. This is not invested money.  If someone borrows to invest… the result can be good or bad… depending on how the investment does.  Borrowing to consume however almost always turns out bad.

If we take a holistic view… this is not the government’s debt. This is your debt and mine and our neighbors. That money will come out of our packets one way or the other eventually.  The charge may come in increased taxes… reduced government services… lower value of our currency or inflation… plus maybe some one off costs… defunct pensions… broken banks…. some things like this.

What we can do about this is invest in good value inflation fighting opportunities… commodities… our own micro business… real estate… or equities.

Second. realize that the volume of noise will grow. Every society has an educational system that teaches its populations how things are supposed to be.   When events do not evolve as citizens have been taught… there is much gnashing of teeth… increased noise that if listened too, deafens one’s hearing to the greater… more holistic symphony of life.

The way to block this noise is to search for value in realistic, personalized, disciplined thought.

Since one of the recent screeches that has scratched across our daily records at a loud volume is the Greek economic crisis… let’s get some positive spin from Greece… from a couple of millenniums ago… from Socrates when he made the statement that he was a “citizen of the world.”

I wrote the same thing in the 1970s (that I felt like a citizen of the world) in my first book Passport to International Profit. Honestly I believed this was an original thought. Yet as we see Socrates beat me to it by a couple thousand years. I am sure a myriad of others did as well.  Maybe there really are no original thoughts.

Anyway Socrates declared himself “a citizen of the world.”   Since the Greeks did not have jet travel in those times his view of what the world consisted of was a little more narrow than yours or mine today but what he meant was that he did not feel bound by the rules of thought of any state or government.

He was enriched by a lifetime of free-thinking and understanding of the entire world (albeit limited) around him.  This was an incredible statement, especially considering the penalty of free thought in that era.  Socrates encouraged his Greek fellows to think purely for themselves.

This was such a revolutionary concept that it did not end well for him short term.   He was tried on two charges: “corrupting the youth and impiety (‘failing to acknowledge the gods that the city acknowledges’ and ‘introducing new deities). This led to his execution.

Long term thanks to technology that makes global travel and communication, we really can be citizens of the world.  So we owe Socrates for the thought and if we march to the beat of our own drummer… we stop hearing all the noise.

Next expect the noise to be mostly negative. There is a great quote about how to overcome this problem from the Daili Lama in a recent Time interview.

He was asked: How do you stay so optimistic and faithful when there is so much hate in the world? His reply was:  I always look at any event from a wider angle. There’s always some problem, some killing, some murder or terrorist act or scandal everywhere, every day. But if you think the whole world is like that, you’re wrong. Out of 6 billion humans, the troublemakers are just a handful.

This is so true. For every negative event in this world there are millions that are positive. Yet our news system focuses on the bad.  What we can do is always keep in mind that problems create opportunity… to serve…to be fulfilled and to earn.

Third, realize that the herd will try to sweep you along.

An affirmation of this fact  can be seen in Warren Buffet’s (the ultimate value investor) testimony before a commission appointed by Congress to investigate the actions of credit rating agencies during the boom that led to the recent financial crisis.  Buffett was issued a subpoena to appear before the Financial Crisis Inquiry Commission hearing in New York because his firm Berkshire Hathaway owns more than 13% of Moody’s stock.  He said of the stock market, sub primed fueled bubble,   “I was wrong on it, too, I called it a bubble-ette. That was the wrong term to use. It was a four-star bubble.  It really was the granddaddy of all bubbles,” Buffett said.  “In boom times, even the wisest can lose their common sense, he said, noting that the scientific genius Sir Isaac Newton was a victim of the notorious South Sea stock bubble of 1720: “Rising prices are a narcotic that affects reasoning power up and down the line.” (my bold).

Here are some tips on what we can do to steady ourselves against the public current that in terms of value is almost always wrong.

These tips came from a reader who wrote:  We just returned from Omaha and the annual Berkshire Hathaway meeting with Warren Buffett.

Although we have been shareholders for years, I never carved out the time to attend…. DUMB! We will be going back next year.

I have always thought that if you are going to listen to somebody, make sure they are eating their own cooking and have created truly sustainable success. Clearly, Warren Buffett falls into this category and his insights are crystal clear, simple and make sense….. here are a couple that I found particularly useful:

1.  The key to getting rich is to create a structure or set of rules that minimizes the “Everyone else is doing it” syndrome. If everyone else is doing it, be wary!

2.  The primary key to successful investing is not the size of your circle of competence, but rather knowing where the perimeter is. Too many people drift away from what they know and in the process move from investor to speculator.

3.  The biggest single cause of the recent meltdown on Wall Street is the Business Schools and MBA Programs throughout the country. Teaching people to invest for the short term instead of owning a piece of the business will always produce gyrations and spikes in stock prices.

4.  The most recent rise in the stock market is primarily a result of low interest rates…. people can’t stand sitting on the sidelines making 2/10th of 1% on their money. Money has started flowing back into stocks because there are no alternatives and most investors can’t sit and do nothing when there is nothing to do that makes sense.

5.  Given the recent level of government intervention on top of the previously existing debt obligations in the United States, inflation is very likely. So are higher taxes. Inflation and higher taxes are the result of an the US inability to live within its means, so collecting and printing more money is the most likely answer.

6.  The real culprit in the recent economic turmoil in the US is not the US Treasury department, it’s Congress. Too much money has been spent in comparison to the amount being collected and this imbalance will result in even more pain.

7.  The problem in Greece is that it doesn’t have its own currency to print its way out of the problem…. Nor do any of the other members of the Euro. The Greece problem is likely to be repeated several times in the coming months.

8.  Long term, Warren and his long time partner Charlie Munger are HUGE believers in the US economy, which is why they just spent $29 Billion buying a railroad. Railroads will be the primary mover of goods in the foreseeable future. The better the US economy, the more goods that need to be moved. This is a long term “all in” bet on the United States economy.

For those of you who are unfamiliar with the spectacular investing results of Warren Buffett, consider this: In 1979, you could have purchased his stock for $290/share. Today it costs $120,000/share. You can read more about this incredible man and his investing philosophy by reading his annual Chairman’s Letter to Shareholders…. You should read all of them (1977-2009):  http://www.berkshirehathaway.com/letters/letters.html

For those of you addicted to speed, please remember that it took Warren 12 years (1950-1962) to make his first million…. The lesson: The goal is not to get rich…. The goal is to get rich and stay that way!

A recent message at this site pointed out that a good sign was that our business grew fast in bad times and much more slowly in good times. This is a signal that we are watching value… buying and investing more when prices are low and less when they are high.

Create your own structure set by the limits of your unique wants… needs and desires that stresses the relentless search for good value in all you do.

If that structure includes equities, then you may want to take a look at this equity market which is perhaps currently the best…

czech-equity-market

valued market in the world.

We closely follow the value analysis of Keppler Asset Management and this chart from his latest quarterly Emerging Market Value Analysis gives nine emerging markets a top value ranking.

If you are a new subscriber learn about Keppler Asset Management here.

czech-equity-market

The Czech Market has the highest dividend yield and yield is one of the most important indicators of value.

We can see a great appreciation in this market as well. In the first quarter of 2010 the Czech Market rose 26.3% in US dollars.

czech-equity-market

One good value share traded on the Czech exchange is CEZ a.s. the CEZ group traded in Warsaw as CEZ and on the Pink OTC Markets Inc: CZAVF.

The heading from their web site reads.

FROM A CZECH CORPORATION TO A MULTINATIONAL GROUP

The strategic goal of CEZ Group is to become the leader on the Central and Southeastern European electricity market. Apart from the production and sale of electricity, CEZ Group also deals in telecommunications, informatics, nuclear research, planning, construction and maintenance of energy facilities, mining raw materials, and processing energy by-products. CEZ Group currently belongs among the three largest heat suppliers in the CzechRepublic.

The parent company and core of CEZ Group is ČEZ, a. s. the largest electricity producer in the CzechRepublic, founded in 1992 by the National Property Fund. CEZ Group was created in 2003, when ČEZ, a. s. merged with several regional distribution companies. Today, CEZ Group belongs among ten of the largest energy companies in Europe, both in terms of installed capacity and number of customers. It occupies a leading position on the electricity market in Central Europe. Following the acquisition of three distribution companies in Bulgaria, one in Romania, two Polish power plants and one Bulgarian power plant, CEZ Group has become a multinational enterprise comprising of over 90 Czech and foreign companies.

See more about CEZ here.

You can see that sales are up but…

cez-sales

according to this Bloomberg chart, the CEZ share price is down.

cez-sales

This is what we look for in our search for value… businesses in a growth markets available at times when prices are low… yet business is booming.

I am not suggesting that you invest in this share. Perhaps it fits into the limits of your unique wants… needs and desires. If not perhaps it can be a role model  in how you search for good value in all you do.

See some ideas why Ecuador offers good value here.

Gary

We’ll review all the good value investing markets and good value micro business ideas at our June 24-27 Quantum wealth course in North Carolina.

How We Can Serve You

How to Have Real Safety in 2020

The most important investment you can make in 2020, is in yourself. 

Invest in more time.  Invest in less stress. Invest in greater security.That’s why four years ago we created the Purposeful Investing Course (PI) because when it comes to finances, 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.

The core model portfolio we teach in the PI Course rarely changes, but is highly diversified in thousands of shares around the world… so there is higher long term profits, less stress and greater safety.

The portfolio consists of 19 country ETFs.  During the four years since we created the Purposeful Investing Course and set up a $40,000 real time portfolio at Motif Brokers, we have held the same 19 shares and have only traded three times.

The portfolio started with $40,000 and has risen to $53,591 ($49,015 in shares and the balance in accumulated cash).

The portfolio did really well from 2015 to 2018, better than the DJI Index.  Then as the US dollar grew in strength it fell behind.

The chart below shows the actual results of thos portfolio compared with the S&P 500.

motif

 

This good value portfolio above is based entirely on good value financial information and mathematically based safety programs developed around investing 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.

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.

Fwd: keppler

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, Canada, Germany, Hong Kong, Italy, Japan, Norway, Spain, 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 theseall 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.

The fact that the Pifilios are invested in all the shares of the MSCI Index in each good value market reduces long term risk.

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 four 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” 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 “Silver Dip” 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” 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.

In 2020 I celebrate my 54th anniversary in the investing business and 52nd 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.

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

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” 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