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Adventures in Ecuador

Never stop having adventures in Ecuador.   Every step into the future is an adventure.   There are always new things to discover and explore that expand our horizons, tickles our fancies and enhances our wealth and Ecuador is a great place for adventure with new sites, sounds and events (even a new mammal) around every bend.

sunset van gogh

Sunset at Montmajour

New discoveries are EX-citing and more importantly IN-formative.

Merri and I have been living, traveling, investing and doing business globally for 45 years (since 1968).  This process has brought us greater riches than we could have imagined. The greatest riches though have not been nor are they now monetary wealth.    The greatest gift of finding and learning new things is the excitement, exuberance and sense of expectation.

Jane Austen wrote it nicely in “Sense and Sensibility”… “that sanguine expectation of happiness which is happiness itself”.

When you are thinking about moving to, or working or investing in a new thing, idea or place… don’t focus on what you are leaving… have lost, dislike, or are angry about.  Look instead for what is “just round the next corner” that might bring wonder to you.

There is still so much we do not know.  See below these amazing wonders!

Olinguito

For example in Ecuador a new mammal was just recently discovered… the Olinquito.

Photo of olinguito in AP article entitled “New mammal discovered in Ecuador, Colombia”.

Ecuador mammal

The article says: Imagine a raccoon with a teddy bear face that is so cute it’s hard to resist, let alone overlook. But somehow science did — until now.

Researchers announced Thursday a rare discovery of a new species of mammal called the Olinguito. It belongs to a grouping of large creatures that include dogs, cats and bears.

The art world recently unveiled a  Van Gogh.

new york times van gogh photo

Unveiling “Sunset at Montmajour”  by Herman Wouters for The New York Times.

A New York Times article says (bolds are mine):  The Van Gogh Museum here announced Monday that it has identified a major new painting by Vincent Van Gogh. The work, entitled “Sunset at Montmajour,” was painted in Arles in 1888, a period that is considered to be the height of the painter’s career.

“For the first time in the history of the museum, that is in the past 40 years, a substantial capital new work of Van Gogh has been discovered that was completely unknown in the literature,” said the museum’s director, Axel Rüger, in an interview.

“We always think we’ve seen everything and we know everything, and now we’re able to add a significant new work to his oeuvre.” 

Adventures in Currency

Because the US dollar is Ecuador’s currency you need to protect against a US dollar fall.

We can apply this adventure philosophy to currencies also.

We can see that the US dollar (as we have predicted in recent weeks) is falling.  The greenback has been fundamentally weak.  Dollar strength over the past five years has come from fear based emotion. Investors feared other currencies.  Now the debt ceiling argument in Washington, DC is counteracting that emotion with fear of the dollar which allows the fundamentals to take hold.

Yesterday’s Reuters article “Dollar weakens as U.S. budget woes weigh” by Gertrude Chavez-Dreyfuss conforms the warnings we have been sending in these posts. Here is an excerpt (bolds are mine):

The dollar fell on Wednesday after four sessions of gains, weighed down by worries about gridlock in Washington on the U.S. budget that could lead to a government shutdown next week.  U.S. congressional officials must reach a budget deal by Monday that would allow the government to keep running, but negotiations have been contentious so far.

“The risk of a government shutdown next week is certainly being felt by the market. We are in the initial stages and right now, the dollar is getting hit,” said Greg Moore, currency strategist at TD Securities in Toronto.

Recent posts have looked at the ENR Global Currency Sandwich  as an equally-weighted anti-dollar portfolio including the Norwegian krone, Swedish krona, Singapore dollar, New Zealand dollar and gold bullion.

Here are good value currencies:

We reviewed the Singapore dollar in the recent post “More Problems Emerge in Multi Currency Market“.  The post  Are we days from Dollar Disaster   reviewed the Mexican peso. Yesterday’s post  Serene Success looked at the upwards potential of the New Zealand dollar.  The message The Power of a Social Family reviewed the Swedish kroner.

The final currency to review is the Norwegian krone.

NOK chart

Click on image to enlarge or click here  www.finance.yahoo.com to see how the Norwegian krone has risen over 55% versus the US dollar in the past ten years.

The chart also shows how the kroner has weakened recently as the Norwegian government has tried to lower the NOK.

Compare the fundamentals of the US versus Norwegian krone. The dollar interest rate is slightly lower  2.92% for 10 year bonds versus 3.27% for Norway Sweden.  Budget deficit for Norway does not exist.  The Norwegian government has a budget surplus of 13% of GDP.  The US deficit is -4%.  The current account for Sweden is a whopping +13.2% of the GDP compared to -2.7% for the US. These fundamentals suggest that the Norwegian krone will maintain strength versus the US dollar.

There is a positive kicker for the krone.

The Norwegian krone has become a safe-haven currency during Europe’s debt crisis.  The budget surplus of  this triple-A-rated country attracts investors seeking refuge from the U.S. debt crises.  This has hurt Norwegian businesses and the Norwegian government has been taking steps to weaken the krone.

Any time a government tries to fight currency fundamentals… an artificial buildup is like to create a blockage  that creates profit opportunity when it corrects.  In this case the krone may weaken versus the dollar short term which gives dollar investors more time to accumulate krone.

One ETF that invests only in the Norwegian kroner is the The Global X FTSE Norway 30 ETF (symbol NORW. This ETF is traded on on the New York Stock Exchange and tracks an index of Norwegian stocks.

This chart from www.finance.yahoo.com shows that the Global X FTSE Norway 30 ETF has risen over 10% in the past two years compared to 43% for the Dow Jones Industrial Index and 42% for the Morgan Stanley MSCI World Index.

For more information on investing in the Swedish kroner via Jyske Bank US investors contact Thomas Fischer at Thomas@enrasset.com

Non US investors contact Henrik Boellingtoft Henrik.boellingtoft@jbpb.dk

Adventure

Beyond The Currency

Charts… statistics and figures do not seem very adventuresome.  They can provide us with clues as to where to look, but we can turn our search for the safest and best value currencies into greater mind expanding adventures.

Warren Buffet, one of the world’s great investors, gives us a clue.   Here are core points he states are a basis for his success:

  1. Do what you like
  2. Money isn’t everything
  3. Work only with people you like
  4. Buy businesses, not stocks
  5. Invest only in what you understand
  6. Don’t over diversify
  7. Keep looking for new opportunities
  8. Buy businesses you plan to keep for life
  9. Look for businesses that are available at a good price

We can apply these same principles in selecting currencies by getting to know the people, the country and the economy more personally.

For example Merri and I enjoyed Norway and its beauty.

Norwegian cruise ship

We took a Hurtigruten cruise that started in Bergen and sailed up to Trondheim and up to the Russian border.

The Hurtigruten ships are freighters and local transport for Norwegians and vehicles, as well as having a few cruise passengers. Norway is a country of islands and these freighters are the main connection.  These ships are not like large cruise liners and do not have casinos, organized activities, entertainment, multiple dining choices, etc.   Norway’s scenery and fellow travelers are the draw.

Norwegian etf chart

We sailed on a freighter like this. Click on image to enlarge or click here

Meeting the people, visiting the cities, seeing the standards of living… the way business is done provides deeper insights into the strength of a nation.

The Magic of Adventure

The magic in this approach is that you become a better investor plus usually find something wonderful… but never expected.   Our adventure in the Land of the Sun.  We first visited Ecuador to study its economy and found an adventure in shamanic natural health… that changed our life forever.

Join us for an adventure in currencies as we review various multi currency portfolios at our International Business and Investing seminar. See details below.

Gary

Multi Currency Value Investing Seminar

Old Accord Creates New Profits – Multi Currency Investments.

Earn more with multi currency stock market breakouts.

Improve Safety – Increase Profits

Learn how to improve the safety of your savings and investments by selecting good value and diversified investments in a multi-currency portfolio.

Few decisions are as important to your wealth as the value of the markets and currencies you invest in.  This has been our area of expertise since the 1970s and we have worked with and advised some of the largest currency traders in the world.

Gain Protection First – Against the Dollar’s Purchasing Power Loss.  In 1913 the The Federal Reserve Act created the Federal Reserve Bank to protect the purchasing power of the US dollar, which has since lost about 94% of its purchasing power.  Here is its price compared with gold since 1900.

priced in gold

Dollar chart from pricedingold.com (1)

The Fed has let the dollar lose most of its strength plus has allowed interest rates to fall so low, that safe investments cannot keep pace with the drop in purchasing power.

multi-currency-chart

Chart from Grandfather Economic Report (2)

Many investors have forgotten about the risk of a falling dollar because the greenback has been strong for the past five years.  This temporary dollar strength came after the great recession of 2009 just as there was temporary dollar strength after the great recession of the 1980s.  Then about six years after the recession, an agreement was made by major governments to weaken the dollar.

There was a severe global economic recession affecting much of the developed world in the late 1970s and early 1980s.  The United States and Japan exited the recession relatively early, but high unemployment would continue to affect Europe and the UK through to at least 1985.  As a consequence between 1980 and 1985, the US dollar had appreciated by about 50% against the Japanese yen, Deutsche mark, French franc and British pound, the currencies of the next four biggest economies at the time. Then the governments reached an agreement and exchange rate values of the dollar versus the yen declined by 51% from 1985 to 1987.

Now the world is again in the same place.  The recession is over.  Europe is a bit behind in recovery and the dollar is higher than before the recession.

There is no reason for the greenback to be  strong.

The agreement in 1985 was called the Plaza Accord.   Over just two years the greenback dropped nearly 50% versus other major currencies.  The next accord will generate great profits for those who know what to do while it ruins the purchasing power of dollar back investments.

The strong US dollar and low interest rates have created one of the biggest stock and multi currency breakout opportunities in history.  Learn how to create a plan to profit from multi currency shifts ahead.

One reason for the potential gains is that stock markets and currency values are cyclical.  Due to low interest rates created by the 2009 economic downturn, the US and a few other equity markets have risen to some of their highest prices, ever.  These markets offer very poor value now.  The steep valuation creates incredible profit potential but also hides some enormous risks.  Learn how to develop an investing strategy based of earnings, cash flows, dividends and book values to increase potential for profit and reduce the risks.

Next Extra Profit Created by Value Breakouts

Over the history of US equity markets, the  price of overall markets have risen about 9.1 percent, respectively, compounded annually.  Yet over more than a hundred years of stock market activity,  a majority of the profits have come from just a very few dramatic breakouts.

Equity markets are ruled in the short term by emotions that create unpredictable ups and downs.  Numerous fears of defaults, worries of double dip recessions, high unemployment, concerns about fiscal cliffs, hold investors back.  Yet global population growth and advances in production and prosperity are relentless economic fundamentals that increase value.

When fear holds back a a fundamentally rising value, rising profit potential grows.  Values increase as prices stagnate.  Then markets break free and rocket upwards creating wealth, prosperity and growth.

Find out which breakouts are likely to take place next.

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 years as shown in this graph.

stock-Charts

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 create war.

Here is the war stock cycle.  Military struggles (like the Civil War, WWI, WWII and the Cold War: WWIII) 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.

Learn how the Cyber War (WWIV) may change the way we live and act and how this will affect currencies and investments.

Learn:

* 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), but 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 outperformance 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.  Buffett leverages his portfolio at a ratio of approximately 1.6 to 1.  This rate of expansion by the way is called the “Golden Ratio”.  It is a mathematical formula that controls the growth of most natural things; trees, the shape of leaves, the spiral of shells, as well as the way economies and societies grow.

We’ll sum the strategy, how to leverage cheap, safe, quality stocks and for what period of time based on your 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 (almost) years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

Enjoy investing more with slow, worry free, good value investing.  Stress, worry and fear are three of an investor’s worst enemies.  These are major foundations of the Behavior Gap, a trait exhibited by most investors, that causes them to underperform any market they choose.  The behavior gap is created by natural human responses to fear.  The losses created by this gap grow when investors trade short term under stress.

Learn how to put meaning into your investing by creating profitable strategies that combine good value investments with unique, personal goals.

Learn how to span the behavior gap.  Behavior gaps are among the biggest reasons why so many investors fail.  Human evolution makes fear the second most powerful motivator.  (Greed is the third.)  Fear creates investment losses due to behavior gaps.  Fear motivates us more strongly than desire.  By nature investors are risk adverse, when they should embrace risk.  Purpose is the most powerful motivator,  stronger than fear and greed.  One powerful way to overcome the behavior gap is to invest with a purpose.

Combine your needs and capabilities with the secrets and the math of our good value model portfolio.

Share ideas about my good value portfolio.  My personal investment portfolio comes from a continual analysis of international stock markets and a comparison of 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.

Markets included in this portfolio are:

• Norway
• Australia
• Hong Kong
• Japan
• Singapore
• United Kingdom
• Taiwan
• South Korea
• China

These markets have been chosen based on four pillars of valuation.

• Absolute Valuation
• Relative Valuation
• Current versus Historic Valuation
• Current Relative versus Relative Historic Valuation

Learn how to use Country ETFs to easily construct a diversified, risk-controlled, equally weighted representative country portfolios in all of these good value countries.

To achieve this goal my portfolio consists of Country Index ETFs that track an index of shares in a specific country.  These country ETFs provide diversification into a basket of equities in the good value countries.  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.

This is an easy, simple and effective approach to zeroing in on value because little 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 pick and choose shares.  You can invest in the index which is like investing in all the shares in the index.  All you have to do is invest in an ETF that in turn invests passively in all the shares of the index.

Learn 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 a test.

The Test for Low Cost Trading

Research put every part of this portfolio in place, except knowing the best, easiest and least expensive way to buy.  A search for an optimal way to buy and hold boiled down to two methods.  One tactic to test was to use a unique online broker that appeared to offer the lowest cost deal.  The other approach was to use a community bank in Smalltown USA.  The small town bank that I use looks after my 401K trust account and their service is first class.  The benefit of small banks is that they still treat us as a human beings (instead of a number) and when we need, it’s easy to go right to the top to answer a question or get a problem resolved.  There are no call centers and the bank and the person looking after my account is just around the corner.

I created a test to see which offered the least expensive service.

Working with my banker in Smalltown USA,  I created two accounts, one at the online broker and the other at the bank. I placed $40,000 in each.

I set up the order for the country ETFs online, while my trust manager set up orders for the identical amounts of the same shares in his system.  Then we got on the phone, coordinated our timing and on a count of three each pushed the button “BUY”.

The results of this test  show how you can gain on any purchase of country ETFs.

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.

ecuador-seminar

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 2017” 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.

Your subscription will be charged $299 a year from now, but you can cancel at any time.

Gary

 

Gary

(1) Dollar chart from pricedingold.com

(2) Grandfather Economic Report

 

 New Van Gough

New Ecuador mammal

Dollar weakens as U.S. budget woes weigh

Norwegian Freight Cruise