Why Invest Globally!

by | Dec 4, 2001 | Archives

May I draw your attention to what I can do for you.

Dear International Friend,

How we can serve you better? Our goal at Garyascott.com is to give you useful, easy to use credible information that makes your life better. We have divided this information into seven categories (each is highly connected) the first being how to invest better. The ideas below explain how we can serve you and ends with an update of our Swiss advisors most recent portfolio recommendations.

  • Why Invest Abroad? Being international is in the nature of things. Learn why a change in the “Limiting Velocity of the Universe” means part of your savings should be abroad.
  • When to Invest Internationally? The time to invest is when you spot opportunity or distortions in markets. See why both exist.
  • Where to Invest Abroad Now…See the eClub's current Swiss portfolio.

Night in the tropics, air so soft its velvet, mist and warmth brushes my skin. Thick evening scents in this fragrant harbor. Mellow insects purr in rhythm with the cacophony that is a great city beyond. At this airport, I enter an enormous metropolis and an adventure begins.Kai Tak Airport, Hong Kong. May 1968. American born and bred, this was my first airplane trip, first time out of Oregon. Portland to Vancouver, Tokyo to Hong Kong. Melting within my heavy woolen blazer, weariness and fear sweep over me. But there is excitement as well, an exciting journey is about to begin.

Who could have known how exciting the next 34 years would be, how much information, facts, figures, ideas and insights on how to invest globally would be gained. Had I known the mistakes to be made I would probably have run! Thankfully all the trials, tortures and errors were mitigated by much fun and an earnest endeavor to live right and learn.

One of seven goals at this web site and is to share with you the basics of global investing learned over these 34 years. A lot about international investing has changed in this time but the fundamentals remain immutable.

We move inaccurately through the mists of the here and now, blindly trying to see what we cannot (the future) but not being able to stop trying so I humbly submit these ideas as fact. These are my illusions that have become real and they have worked. I gratefully share the excitement, the fun, the incredible fulfillment that growing in this ever expanding universe can bring and ask for forgiveness in advance of any of my realities that are errors or distortions for you. The era of the Guru is dead and share these ideas as a simple human who has spent his life wandering and gathering a lot of economic facts.

Investing globally is not a panacea, but expanded horizons are. My sincere wish is that you will see some truths here that will help you grow as they have helped me. And from this growth I wish you an existence that is better, happier and more financially or otherwise secure.

Life is a trip. We have been given an entire globe to enjoy. So here we go. I hope you have fun on the ride!

Why be International?

My first trip abroad 34 years ago was significant because we have just passed through another era of productivity, that included the era of the Internet bubble. Back then in 1968 events were incredibly similar.

My arrival in Hong Kong at that time coincided with the beginning of a new era for world stock markets. When I arrived in Hong Kong that year and 40 or so proceeding had been dominated by Wall Street. The New York Stock Exchange was the biggest stock market in the world. It was bigger than all the rest put together. It was so big that when one thought of having stocks, the thought was automatically of one place the USA. U.S. dominance was about to change. Let's see how knowing this can help us learn together. 1968 was the year when the Hong Kong Stock Market began to explode upwards along with Tokyo's market. What a ride!

The Heng Seng Index was then 100 and rose to 18,000. Anyone who steadily committed money to this market then made a fortune.

Though This opportunity has passed and the year ahead will be different by climbing the foundations of the past we can get a glimpse of what the future may bring.

Here was the performance of the stock markets of the world over the years after I arrived in Hong Kong.

             Japan                           3,093%             Hong Kong                       1,456%             Spain                           1,254%             Austria                         1,193%             Switzerland                     1,112%             Singapore                       1,011%             Denmark                           826%             United Kingdom                    557%             Germany                           556%             Belgium                           546%             New Zealand                       532%             France                            485%             United States                     378%

This was an era when all one needed to do was invest in the next market to emerge.

The U.S. in that period was not the best place to invest. Then in the 90s Wall Street reemerged. Now this has changed yet again. as a leader. Global investing is different today. For example one recent message in the International investing segment of our site shows why overseas equities and debt now offer better value now.

Technology Brings Opportunity

My arrival in 1968 also coincided with and was possible because of a new wave of technology. I was on the leading edge of a technological invasion of baby boomers about to conquer the world. We, born in the mid 1940s, given incredible, free educations and great confidence, were the first large segment of mankind in recorded history not confined by the boundary of distance on earth.

I had quite unknowingly been among the first platoon of men and women to enjoy freedoms never, ever exercised en masse by the common man. As the world improved its ability to communicate and transport, its global economy expanded. As humanity grew more able to share knowledge, skills, resources and actions among itself, every persons standard of living had a chance to grow. In that flight from Portland to Hong Kong I had proven that. A kid with no money, no international experience, or background, but in one day I could physically move around the world! This is so commonplace today it does not even seem remarkable.

But in the perspective of time this seemingly simple event was incredible and represented a vital turn of events in terms of our investing opportunities, tactics and disciplines today.

Look back in time at the world and its economy before the telephone, steam engine, car, airplane and computer, before the net. The limiting velocity of man, of finance and investing was the speed of the horse. Imagine the impact this had on business and investments then.

Take a silver miner in Mexico as an example. In days of old if he had the silver in Mexico it was hard, slow, expensive to send that silver anywhere. To find buyers was a big job. Imagine what it took to sell Mexican silver in New York! The fastest way to send a message about price was the speed of a horse. Transportation was even worse. The silver had to be shipped by horse and wagon. The money had to pay men for weeks just to transport not mention protect) a load of silver from Mexico to New York. It is not surprising that the silver miner would sell his silver for less in Mexico than in New York. Only the most ambitious, best-capitalized miners could afford to send men all the way to New York to find markets for silver. Most markets remained local. Imagine the compounding of costs and complications if the miner tried to sell silver in further markets like Tokyo! Such constraints of time and distance have shackled mankind for all of recorded history until 40 years ago! But as I arrived in Hong Kong all that was about to change.

Today through telephone, fax and the Internet the same miner can find, monitor and conclude deals on a global basis, anywhere in the world within seconds. He can ship valuable cargo at high speed to modern airports and deliver cargo anywhere in the world within a day. Technology has made international business easier and easier, thus investing has become more global as well. Global investing simply offers more opportunity. The sun always shines somewhere and so does opportunity!

In this message we look at a portfolio recommended by one of our eclub advisors, Andy Kaegi from Zurich Switzerland.

Until next message, good global investing!