One benefit to Ecuador Living Club membership is that the club can make discrete inquiries when required. For example one member just asked about a felony conviction of 20 years ago. Would this affect his resident visa application? We checked without mentioning names and found that the process only looks back five years. That was good to know.
Another point in Ecuador is its currency, the US dollar, is at risk.
However we can turn the weak dollar into multi currency investing opportunity when we reflect on a Tale of Two Cities.
A note from a concerned multi currency reader revealed ideas about good times and bad… the ups and downs… joys and sorrows… expansions and contractions – the frequencies that compose every measure in this symphony we call life.
This multi currency investor wrote: Hi Gary Scott! A long term reader trying to learn as much as possible before coming to Super Thinking International Investing Business Seminars. Due to Newsmax I got tuned into Aftershock Survival Summit with Robert Weidemer who says real estate values going to dive down double dip from now until 2016. He says don’t buy real estate now… rent until the significant declines hit. What to do?
The answer came from Charles Dicken’s “A Tale of Two Cities” as it starts: It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way.
I replied to the reader. There are always multi currency problems and opportunities regardless of the current public mindset.
There is always someone predicting an upcoming disaster. There is always someone lauding the upcoming boom. However dire and manic predictions never cover the entire picture. Nor is the state of the canvas all that important. It is what we do with the paint we possess that will determine our affairs, our fate and our fortunes in the coming days.
There are some good reasons to expect another shock between now and 2016. Since 2000 our research (and our notes to readers) have shown that global equity markets are in a bear cycle of 13 to 20 years.
This last downwards pressure creates a huge opportunity. This may be last bargain basement for investments that many of us will see.
First… the world has a bigger global population with greater productive capacity and better ability to trade. In other words, the really big picture is more production and more consumption. Bigger… greater… better. More people…. more to do…. more opportunity.
Second… we have more energy and use it better. The industrial revolution has been fueled by fossil fuels and farmers (coming off the farm into the factory). The increase in global natural gas and oil reserves along with the many steps that have been taken to increase fossil fuel efficiency are encouraging.
A September 2013 New York Times article “How We Learned Not to Guzzle” by Ralph Cavanagh says: Over the past 40 years, we have found so many innovative ways to save energy that we more than doubled the economic productivity of our oil, natural gas and electricity.
Government data indicate that our energy-saving efforts already have yielded some amazingly good news. Our factories and businesses are producing substantially more products and value with less energy, which goes to the heart of the president’s climate strategy. In fact, energy use in the United States has been dropping since 2007, and last year’s total was below the 1999 level, even though the economy grew by more than 25 percent from 1999 to 2012, adjusted for inflation.
At the same time, the amount of oil we are using in our vehicles, homes and businesses continued to decline last year, down 14 percent from a peak in 2005. Surprisingly, oil use was lower in 2012 than in 1973 (when the nation’s economy was only about a third of its current size). The main reason is that we are demanding better mileage from our vehicles and driving them less. (see a link to the entire article below).
Third… the value analysis from Keppler Asset Management shows an implicit three-to-five-year projection that the Equally Weighted World Index is expected to rise to 12,259 from its current level of 7,401 in three to five years. This corresponds to a compound annual total return estimate of 13.4 % in local currencies – up from 12.8 % last quarter. The upper-band estimate of 14,710 by June 30, 2017 implies a compound annual total return of 18.7 %, while the lower-band estimate of 9,807 corresponds to a compound total return of 7.3 % p.a.
Click on charts to enlarge. Read more about Keppler’s best value stock markets below.
In other words, the stock market should be good.
Fourth… our long term analysis of 30 year stock market cycles suggests that we are in the 13th year of a bear cycle that normally last 15 years so should expect a bull market to start fairly soon and last until about 2030.
Fifth…there is a new wave of technology that is changing the global socio-economic efficiency. This has the potential to create the buzz and exciting news that will stimulate non thinking expansion and reduces non thinking fear at the .com bubble news in the 1990s. Those who do think can take advantage of the values created by distortions from the thundering herd as it stampedes up or down.
Sixth…the new wave of communications ability and technology allows society to tap productive markets (older people) who normally would leave the work place and become a social expense.
Seventh…changes in weather and the reorganization of emerging economies such as the Middle East will continue to stimulate the economy.
That is seven pieces of good news.
However, there are three negative forces we’ll want to avoid:
NF#1: The same technology that helps the economy also helps those in charge of the technology take advantage of the public. We can see this in the New York Times article “The Rich Get Richer Through the Recovery” by Annie Lowrey that says: The top 10 percent of earners took more than half of the country’s total income in 2012, the highest level recorded since the government began collecting the relevant data a century ago, according to an updated study by the prominent economists Emmanuel Saez and Thomas Piketty.
The top 1 percent took more than one-fifth of the income earned by Americans, one of the highest levels on record since 1913, when the government instituted an income tax.
The figures underscore that even after the recession the country remains in a new Gilded Age, with income as concentrated as it was in the years that preceded the Depression of the 1930s, if not more so.
To read “The Rich Get Richer” see the link below.
NF#2: During the last 15 year bear cycle the US and many other nations have badly increased debt.
US National debt alone is now near 17 trillion dollars or over $148,000 per person. That’s just Federal debt. State, County, City, Personal all make this worse.
See more US debt data at the www.usdebtclock.org link below
The US is not unique in this problem and has led many governments to confiscate pensions.
The Christian Science Monitor article “European nations begin seizing private pensions” by Jan Iwanik shows how governments have started tackling private pension funds in a stronger way. The article says: Hungary, Poland, and three other nations take over citizens’ pension money to make up government budget shortfalls.
People’s retirement savings are a convenient source of revenue for governments that don’t want to reduce spending or make privatizations.
The most striking example is Hungary, where last month the government made the citizens an offer they could not refuse. They could either remit their individual retirement savings to the state, or lose the right to the basic state pension (but still have an obligation to pay contributions for it). In this extortionate way, the government wants to gain control over $14bn of individual retirement savings.
The Bulgarian government has come up with a similar idea.
A slightly less drastic situation is developing in Poland.
The fourth example is Ireland. In 2001, the National Pension Reserve Fund was brought into existence for the purpose of supporting pensions of the Irish people in the years 2025-2050. However, in March 2009, the Irish government earmarked €4bn from this fund for rescuing banks. In November 2010, the remaining savings of €2.5bn was seized to support the bailout of the rest of the country.
The final example is France. In November, the French parliament decided to earmark €33bn from the national reserve pension fund FRR to reduce the short-term pension scheme deficit.
Since that article, Poland, the largest of central Europe’s emerging economies, did take over many of the assets held by private pension funds, including treasury bonds, to a state vehicle.
Also in Cypress as part of a last-minute $13 billion deal with international lenders to prevent the country from financial collapse, deposit-holders with more than 100,000 euros will face big losses up to 40% of their assets.
This is not likely to happen in the US. There hasn’t been a depositor haircut in the U.S. since the Great Depression.
Instead the government has been putting pressure on private pension managers to be safer and has been subtly coercing them to invest in the US dollar and US bonds. Because the US is a currency issuer the government can create conditions so more dollars are printed which leads to the third problem.
NF#3: Terribly weak dollar fundamentals. The one thing I have learned about stocks and currencies is you can never predict what will happen short term as both markets are ruled by emotion.
However you can also be sure that long term the markets will be ruled by fundamentals and four important currency fundamentals are:
* Trade Balance and Current Account
* Federal Debt as % of GDP
* Federal Deficit as % of GDP
* Interest rate
The US is among the worst of any developed nation in four of the five these fundamentals.
Concerns over these weak fundamentals are compounded by the history of the dollar after the 1980s recession. The dollar showed a strength that was not supported by fundamentals in the 1980s with a steep decline after.
This chart is from a great report about dollar fundamentals at Financial Sense Editorials.(See link below)
These facts suggest that the dollar could have a serious decline in forex parity and purchasing power and should not be trusted as the only currency held.
This is what we look at in the multi currency sessions of our International Investing and Business seminar October 4-5-6. There is always someone telling us that it’s the best times. There is always someone warning it’s the worst.
Our seminars explains why the times are both and looks at how to take advantage of the new wisdoms and avoid damage from the old foolishness.
This is our 45th year of creating ways to serve. to earn and diversify our savings and investments to protect against loss of the dollar’s purchasing power.
We share what we are doing and what one can do in small and large ways at our seminars and courses.
Read more about our philosophy about how to earn and invest below.
Multi Currency Value Investing Seminar
Never Run Out of MoneyJoin Merri and me for our October 17-18 Quantum Wealth Seminar.
Share my 49 years of global investing experience. Learn how to fight inflation and gain profits using easy value investment portfolios and currency distortions.
For example at the 2012 October seminar it became obvious that the Japanese yen was overvalued.
That led me to post a note at this site “Multi Currency Sandwich” suggesting shorting the Japanese yen and investing the loan in dollars and euro.
What a ride! The dollar appreciated over 12% versus the yen in one quarter. This rise was far higher than the skyrocketing Dow Jones Industrial average (red line in chart below).
Those who learned how to borrow yen and invest in the Dow Jones industrial average… earned both the 9.5% and 12% profit or 21.5%… in three months.
US dollar versus yen and comparison to Dow Jones Industrial average chart from www.finance.yahoo.com. Click on chart to to enlarge.
That yen loan is not safe at this time. At the seminar we will look at the risk reward scenarios for numerous currencies to see which is likely to bring the greatest profit next. More importantly you learn how to continually monitor currency values after the seminar.
Learn why it now makes more sense to borrow (or short) pounds.
We conduct the seminar in October because September and October are important months for investing and also pose the greatest risk to our wealth.
A study by Michael Keppler shows that most profits in most major equity markets, is achieved from the beginning of November through the end of May.
Michael wrote: “Gary, We have done extensive research on seasonality and I am proud to announce that a shortened version of a major study which I have coauthored with our Director of Research, Dr. Xing Hong Xue, will be published in the Winter Issue of the Journal of Investing. Our research shows that basically in all major equity markets, nearly all returns are achieved from the beginning of November through the end of May. All the best to you and Merri. Michael”
Michael showed that over 30 Years, the Dow grew 8.16% overall.
Historically the worst months for stock markets are September and October. This week, the best chances for equity losses this year, have just begun. Think risk aversion now and think ahead for profit making in November.
We’ll be joined by Michael Keppler, one of the world’s foremost equity mathematical and statistical analyst. Between Michale and myself, we have almost 100 years of equity research experience. He will speak about time, asset allocation and how to determine good value markets.
Learn how to protect and increase your savings and wealth with easy to start, very slow trading, safe and secure, worry and stress free portfolios that provide proven long term profit potential. Avoid the ups and downs that stock markets will see in the months ahead.
As a run up to my 50th year of speaking and writing about savings and investments around the world I asked my mathematical and tax genius friends to share a weekend with us to cut through the fog of rapid change and show us ways to invest better than hedge fund managers.
Hedge Funds were the fashionable place to invest in the 1990s, but since then their performance has been falling.
However some hedge fund managers succeeded for one simple reason… experience. A Telegraph article “How can we avoid the next financial crisis? Urgently listen to those who foresaw this one” explains why a few managers succeeded, when it was said: It’s no coincidence that the biggest winners of the downturn – John Paulson, Paolo Pellegrini and Jeffrey Greene – were approaching 50 years of age. They retained vivid memories of past real-estate problems. Youth was a detriment to pulling off the greatest trade ever and preparing for the downturn.
The successful hedge fund investors succeeded where most failed because of their experience.
I’ll provide the 50 years of experience at the seminar. I have been through the rise of gold to over 800 an ounce (in the 1970s) and silver to $48. I experienced the stock market’s bear that began in 1968, the Black Monday crash in 1987 when the Dow had its biggest one day drop ever and the dotcom bubble as well as the collapse in 2008. I worked my way through the first dollar devaluation in 1971, the Plaza Accord arranged dollar collapse and two major downturns in the Japanese yen, plus invested through the 1970s, 1980s and late 2000 recessions.
We’ll share how these experiences prepare us for our investments now.
Michael Keppler provides the Math.
The idea of using math to find good value equity investments led me to ask mathematical analyst, Michael Keppler, to join us in the Blue Ridge for the seminar.
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. His analysis is rational, mathematical and does not cause worry about short term ups and downs.
Red Lining Your Investments
According to Keppler’s analyses, an equally-weighted combination of good value markets offers the highest expectation of long-term risk-adjusted performance. His mathematical predictions have been eerily accurate as the red line below shows.
Each quarter Michael shares with me (and other professional investors) his “Total Return Predictions”.
Click on chart to enlarge.
This chart shows the entire real-time forecasting history of Keppler for the KAM Equally-Weighted World Index, he started in 1993. Keppler continually shows what his mathematical formulas predict for markets four years ahead. These numbers are based on mathematical relationships between price and value over the previous 15 years moving forward in monthly increments. In this way Keppler uses numbers to continually adjust to the ever-changing market norm.
Keppler’s chart includes two remarkable episodes. The first in the period when global equity markets peaked and crashed over a five-year period from 1997 to 2001. Keppler’s Equally-Weighted World Index predictions stayed above the upper forecast band and accurately predicted the recovery and how much global markets would rise.
The second remarkable period started in October 2008, when again Keppler’s forecasts accurately showed where markets would reach as they fell below the lower forecast band.
Imagine the extra profit professional investors have today when they invested in these depressed good value markets before they again rose.
Keppler’s projections now indicate that global markets are expected to rise from between 2.1% and 13.0 % in the next three to five years.
Learn about Keppler’s projections and about Asset Allocation from Michael Keppler in person at our Value Investing Seminar October 17 & 18 in Jefferson, North Carolina.
Our October seminar will be at the Jefferson Landing Country Club.
Enjoy the autumn leaf change and learn how to survive and prosper with value investments.
Jefferson leaf change view.
Learn amazing tax benefits as well. I have invited my tax expert, Conrad Oertwig, to join us.
Seven of tax secrets that Conrad will share include:
* How Dutch-treat entertainment allows you to deduct your own meals.
* How to entertain for business and help the charity of your choice because a charity sporting event produces double the deduction of a business meal.
* How one magic word can allow you to deduct your daily transportation costs between your home and another work location.
* How to earn an extra $11,425 by using antiques as office equipment.
* How to gain $12,976 by using two vehicles for business.
* How to reduce tax by having a second office in the home.
* How to travel by cruise ship and deduct up to $680 a day.
Plucking common sense from the tax law is time consuming and difficult work. For more than 25 years, Conrad has gained great satisfaction by helping his clients extract tax dollars from the tax law. He has over 400 tax savings tips and will share some of the most important lessons at the seminar.
To help you get an early start on tax savings, I will send you Conrad’s report “7 Secrets to Paying Less Tax… for the One-Owner Business” when you enroll in the seminar. I’ll also send you “The Silver Dip 2015” as soon as it is released.
Join Michael Keppler, Conrad Oertwig, Merri, and me, plus video presentations by Leslie Share, Eric Roseman, Thomas Fischer and Richard Smith. The “Value Investing Seminar” looks at how to protect purchasing power and pensions with value investing. The course teaches how to add safety and create profits by spotting multi currency and global equity cycles through good value mathematics.
Hear from other speakers via video. The seminar will include online presentations including:
One way to protect our wealth and freedom is to have a good attorney who understands how to use appropriate planning so you can also be protected rather than hurt by the tax laws.
Leslie Share: How to use and benefit from US tax law living overseas and for wealth preservation.
Leslie has been our friend and adviser of more than 30 years, and I have asked him to speak to the seminar online at the October Value Investing seminar. Leslie is an attorney in Coral Gables, Florida who specializes in general, corporate and international taxation, estate and gift tax planning, internal revenue service matters at the agent and appeals level plus most important, he specializes in wealth preservation.
He has the highest possible Peer Review Rating by Martindale-Hubbell, Florida Super Lawyers and The Best Lawyers in America.
Leslie is the type of attorney who can help gain asset and wealth protection if you live in the US or abroad.
The best way for boomers to protect their wealth is with good value income producing shares. Not everyone can wait for their assets to grow. Many need investments that create income now.
Eric Roseman: How to select good value income producing shares.
I have worked with Eric for decades and use his ability to select good value income producing shares. Understanding the intrinsic value of any equity is an elusive concept, but one of the best ways to assess value is by looking at the income it generates. Eric is a master at sniffing out the shares that provide a good income now as well as potential appreciation later. Learn from his strategic ideas for current market conditions.
Richard Smith: How to overcome the behavior gap with Trailing Stops.
Dr. Richard Smith, founder and CEO of TradeStops. Richard earned a PhD in Math and Systems Science, and even he had to learn the hard way that it takes more than intelligence to win in the game of investing. He has spent the last 10 years researching and developing algorithms and services that give individual investors the tools they need to remain in their personal investing comfort zone, and to succeed! With his background in mathematical theories of uncertainty combined with his own investing and trading experience, Dr. Smith understands risk management and how to use it as a self-directed investor to master the market.
Finally at the seminar I’ll review the 50 Golden Rules of Investing. Learn how to protect against shady investment advice, unreasonable and hidden fees. Learn how to protect yourself from your own emotions. Learn when it is best to buy shares and determine which type of share is best for you. Find out how to avoid the loss fear syndrome and stop getting caught by great sounding stories that can rob your wealth.
In 1986 I wrote a report called the Silver Dip that showed how to borrow 12,000 British pounds (US$18,600) and use the loan to buy 3835 ounces of silver at around US$4.85 an ounce.
Silver had crashed in 1986, I mean really crashed, from $48 per ounce. As prices decreased from early 1983 into 1986, total supply had fallen to 449.7 million ounces in 1986. Mine production was restricted by the low prices at this time, with silver reaching a low for this period of $4.85 in May 1986. Secondary recovery also was constricted by these low prices.
Then silver’s price skyrocketed to over $11 an ounce within a year. The 12,000 pound loan purchased silver that rose to be worth $42,185.
The loan was in pounds and in May 1986 the dollar pound rate was 1.55 dollars per pound. So the 12,000 pound loan had purchased $18,600 of silver. The pound then crashed to 1.40 dollars per silver. The loan could be paid off for $13,285 immediately creating a $5,314 profit. So the profit grew to $47,499 in just a year.
This is why the “Silver Dip 2015” will be one of the seven portfolios, the most speculative, we will study at our October 17-18 Investment Seminar in Jefferson, North Carolina..
This is also why I am releasing a new “Silver Dip 2015” report. The same conditions are in place for gold and the Silver Dip looks at both speculations in silver and gold.
There is also another, much safer, once every 30 year opportunity that I have described in 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 good value investments. The mathematics behind the idea of this investment strategy are currently extraordinary. Currency diversification has always been important for safety, but right now a multi- currency opportunity is brewing and has more profit potential than we have seen in over three decades.
Our Investing Seminars started 32 years ago when one of the best set of three currency and equity conditions ever existed. Over these decades, our semi annual seminars have updated what’s going on in global investment markets and what to do. Yet in all those years, few times have conditions offered as much long term opportunity as in 1982. The Dow alone rose from 1,000 to 14,000 in that period.
Then the cycle ended. Warren Buffet 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!
Now three of the great economic conditions have returned.
Conditions have come together just as we saw at our first seminars in the 1980s. The US dollar, the US stock market and the price of oil are acting almost exactly as they did in the early 1980s. Knowing these conditions and why they have merged and what to do about them can help you create a fortune.
Learn how to gain this potential (we’ll review three ways to accomplish this at the seminar) in the Keppler Good Value Country Strategy with ETFs (Country Index Exchange Traded Funds). For example there are currently ten good value developed markets, Australia, Austria, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore and the United Kingdom. You can easily create a diversified portfolio in each or all of these ten countries with Country Index ETFs.
We review Country Index ETFs at the seminar and look at specific portfolios you can create to tap into these three economic conditions.
Share my 50 years of experience. Gain advice that is sterling as we head toward my golden anniversary of writing about saving, finance and investing. Our value investing seminars are filled with valuable information but we have fun and take time to relax and socialize as well.
We look forward to joining us this October.
Saturday, Sunday, October 17-18, 2015, Jefferson, North Carolina.
Read more about our philosophy about how to earn and invest at PIEC Investing