International investments in Eastern Europe have been among the most profitable this year. Many investors missed this opportunity because of incorrect perceptions. Learn a way to profit from this fact now. Insights create outlooks. Combine the two and you get mindsets that dictate how we perceive trends. Few factors have as much influence on our wealth. Fortunes pass by us every day. Our mindset determines whether we’ll see the opportunity or not.
Years ago I learned a valuable lesson about mindsets from Russia. The lesson helped me learn how to spot change and how important it is to shuck preconceived ideas.
We were conducting a seminar in London and a noted economist, Lord Rees Mogg, was one of our speakers (back then he was Sir William). At the last moment he could not attend but kindly lined up a member of Parliament to speak instead. This member had just been in charge of looking after Michael Gorbechov who had just visited England after becoming the Premier of The Soviet Union. He spoke on how intelligent and sharp Gorbechov was. All the delegates (Merri and me included) trembled in our boots. Our mindset during that Cold War era was, “The Soviet Union is the Evil Empire. They are bad. Therefore, a smart leader for the Soviet Union is bad.”
Looking back the correct thought was: “Soviet system is bad. A smart Soviet leader is good because he will figure out how to dismantle the bad system.”
Misconceived mindsets are hard to change! For example, where would you have thought was one of the best places to invest this year? Russia? Perhaps not. Yet Russia is on the move! An American reader, who lived in the Ukraine for some years, just shared this note with me.
“Hello Gary, Thanks for your continuing updated financial letters, and info. Did you see what I saw this week? The Russian ruble is now a fully convertible currency against euros, dollars, francs or whatever? I had been predicting this for ten years! Right now an investor can open a ruble Master Card (in Russia ) and earn 2% a month on his debit card balance? Wild!”
This does not mean you should rush into ruble trading however. I checked with Thomas Fischer at Jyske Bank and asked what he thought was happening with the ruble. Here is his reply.
“Hi Gary , I spoke to our traders and the ruble was made fully convertible on July 1st….BUT: it will take quite some time before you can talk about free trading. It will take a very long time just for foreign banks to open accounts in Russia . The market place does not have practice trading the ruble and just getting a buy/sell quote could be cumbersome. So far and for some time to come all major banks will only use NFD`s (non-deliverable forwards) as the paper work to open accounts will take time. Regarding value and movements of ruble – only one thing counts: OIL. The ruble is an oil play and nothing else. So if you believe oil prices will remain high or go higher then rubles should appreciate. All in all be careful and don’t expect a fully convertible currency just yet.
“I am not quite sure when we will be able to offer accounts in ruble but we will be working on introducing this opportunity as soon as it is possible. Thomas”
So stay tuned. There will be a batch of scams promising great profits from ruble trading. Count on this and don’t get sucked in by con artists who offer unrealistic opportunities too soon. Wait for the legitimate operators to get set up and do things right.
However there are ways to invest in Russia and Eastern Europe that might make sense (if you believe in rising oil prices).
There are some who believe that oil prices will rise higher than we can believe. A recent Bloomberg article entitled “Peak Oil Forecasters Win Converts on Wall Street to $200 Crude” say that proponents of a controversial peak oil idea says global oil production is now at or near its zenith. The article says ”Once the flow crests and starts to decline — and some geologists say it already has — oil will no longer be able to slake the world’s growing thirst for energy. The result will be the oil shock to end all oil shocks. The price of a barrel of crude will spiral to $200 — and keep rising. To the peaksters, today’s energy crunch is nothing next to the pain that will follow.” See http://www.bloomberg.com
This is where insights, outlooks and mindsets come in. Often our hunches or ideas that seem to pop out of the blue lead us in directions our logic would never look. We have been looking at synchronicity in recent messages. Outlooks come from research but insights can come from synchronicity! This is exactly how these thoughts about Russia came into being.
The reader above sent me the note about the ruble, I had written to Thomas Fischer and he had replied. Then I was updating our MultiCurrency Sandwich Portfolio review.
Four of the five MultiCurrency Sandwich Portfolios we track are doing well. The Emerging Market Portfolio is doing very well. It’s up +34.60% in 10 months. The Emerging Asian Portfolio is doing even better, now up from +84.18% in the last 10 months and a few days.
When I looked at all five portfolios, as a diversification with equal weightings, I saw they have risen to an average of +24.72% per annum, slightly ahead of our projections.
Double your profit potential with the MultiCurrency Sandwich . Learn how to leverage investments in top value markets. See Borrow Low Deposit High – How to Use the Multicurrency Sandwich
As I looked at the portfolio, the thought, “Which one investment in all these portfolios (the five contain more than 20 investments) has performed the best?”
With the Asian portfolio doing so well, my mindset was pretty well focused on an investment in China or India.
To my surprise, the most profitable (in percentage terms) investment in these five portfolios to date is the Jyske Invest Eastern European Equity Fund. This fund is up from $51,000 to $77,717.
This is a rise of 41.34% in ten months. Had one invested $50,000 in this fund and leveraged the investment two times with a Swiss franc loan, the profit would be nearly $60,000 or a 120% return in ten months!
This fund also has some room to grow as it has not fully recovered from the April 2006 emerging markets crash. The fund was at 560 euros per share in March 2006, but dropped to 380 per share by the end of May. The fund has recovered to 520 Euros per share.
Here is where synchronicity kicks in. I checked out the portfolio of the Jyske Invest Eastern European Equity Fund and discovered that it holds about 10% of its portfolio in Hungary, 15% in Poland, 10% in the Czech Republic and a whopping 50% in Russia.
Who would have thought that one of the best investments in 2006 would be in equities of Russia and other former Eastern Bloc nations.
The manager’s Review and Outlook of the Jyske Invest Eastern European Equity Fund as of the end of August 2006 is: “The increasingly bullish moods of the equity markets in late June were soon changed when the situation in the Middle East escalated and Israel started a military intervention in Lebanon. The atmosphere changed when Bernanke, Chairman of the Fed, indicated that the period of interest rate hikes is over this time around. In Eastern Europe, Poland was the best performing market with an increase of 16.56%, followed by Hungary (9.83%), Russia (3.59%) and The Czech Republic (3.42%) in terms of EUR.
“In Hungary , the market was surprised by the higher-anticipated a by interest rate hike in July. According to the Central Bank Governor, the interest rate increase is the result of the recent fiscal policy package.
“Disagreement as regards Poland ’s ability to meet the EU budget convergence criteria (3% of GDP) in time was probably the main reason why the Minister of Finance was replaced in June.
“Once again, the credit rating agency, Fitch, upgraded its outlook on Russia. The state of Russia sold some of its holdings in the oil company Rosneft and thus drained the equity market of approx. USD 3bn.
“Following a somewhat turbulent period, the markets stabilized in July. We have not changed our long-term outlook for Eastern European equities, which we still think hold a potential.”
I like this fund and placed my order to buy last Friday.
You can get full details at Jyske Invest International Bond and Equity Funds
You can also get more information from Thomas Fischer at firstname.lastname@example.org
This shows us that we may want to invest in Eastern Europe but also shows us about the strength and wisdom that comes from synchronicity and our insights. Those with a more scientific outlook may call this just a coincidence. So be it. The point is look within and without. Fuse your research with your insights, regardless of what you call them (coincidental or synchronistic), to keep your mindset in focus with the here and now rather than the past.
Let you inner wisdom guide you along with the facts.
Join Merri, Thomas Fischer of Jyske Bank and me at our next International Business and Investing Made EZ course in North Carolina . Review where to invest and do business now and learn which markets and currencies may be strong in the year ahead. Go to International Business and Investing Made EZ course in NC
The power within also rules our health. Ayurved, one of the oldest systems of health on earth is ruled by this fact.
Our friend Melina L.Takvorian (PhD) wrote an excellent essay entitled “The glow of total beauty” which starts:
“Is beauty only “in the eye of the beholder?” And then again only ‘skin deep’ as we’ve so often been told? In the ancient pages of Ayurved – the thousands of years old medical knowledge of India , we read that being beautiful, being ‘sundar’, is a function of the invisible rather than the visible; that it is a matter of being rather than of appearing. Furthermore, we are told that it is a state that is generated from the inside out. How, you might ask?
“When speaking of beauty, the Ayurvedic texts do so in the context of the concept of ‘auspiciousness’. Rama Kant Mishra, an eminent Vaidya, as well as ayurvedic dermatologist and educational consultant from a long line of ayurvedic healers – says that beauty is: ‘subhang karanama’.
“He explains that ‘subh’ refers to the term auspicious; ‘anga’ to body part; and ‘karanam’ to transformation. According to the ayurvedic sutra, beauty results from the ‘auspicious transformation(s) within the human physiology’. Lest we think that such transformation(s) concern only the material physical dimension, he adds that for Ayurved there are five distinct yet parallel aspects of beauty: a) spiritual; b) emotional; c) mental; d) sensorial; e) physical.
“Nowadays modern technology is quite well equipped for addressing skin-deep beauty with highly sophisticated and effective dermal applications; Ayurved, however, explicitly states that true ayurvedic beauty care should scratch deeper into the surface and address all levels of beauty, whether physical or spiritual, mental or emotional, or sensorial. For Ayurved, the ultimate objective is to experience total beauty, and total beauty only results from the harmonious and integrated functioning of all of the five distinct possible levels of beauty mentioned above. Therefore, physical external beauty – which is what we primarily tend to seek – is just an aspect of total beauty, and it depends on the balance and integration of all the remaining levels.”
You can learn how to gain inner and outer beauty through Ayurved from Dr Mishra at his next El Meson course in Ecuador January 8-10, 2007. See Ayurvedic Cleanse
One reason Merri and I love Ecuador is that it has this invisible energy that enthuses almost everyone who joins us. Here is a note Merri received from two delegates at the current Super Thinking + Spanish Course.
Merri, Arrived safely and on time. We love the hotel and Steve is a jewel. Weather is perfect. Met Carolyn and Bruce this morning. Ready for class tomorrow. Blessings. WE LOVE ECUADOR !”
This immediate enthusiasm is so typical from our delegates.
Another reason we love Ecuador is its practicality. Though only 3 hours and 45 minutes from the US , prices are extremely low, yet the country is enormously progressive in many ways..such as the internet. We can operate our business perfectly from there because wireless Broadband has now spread across the nation.
This is the newest wave of “Always On” Internet access and makes it possible for almost anyone to have a fast connection.
According to Technewsworld.com: “The title of “World’s first WiFi-linked e-payments network” is claimed by The Mall of San Marino in Guayaquil , Ecuador . To create this network, which supports physical and online retail sales and management for the Mall’s 250-plus merchants, U.S.-based e-payments equipment and services provider Verifone joined with wireless network equipment supplier D-Link’s South American subsidiary and local payments processor MediaNet.” See http://www.technewsworld.com/story/34517.html
Wireless Broadband differs from satellite broadband where you have to have an upload and works like a cell phone. You have to be in line of sight of a tower. This bodes well for Ecuador with its high mountains and broad valleys. We are surrounded by mountains here in Imbabura and they bristle with towers, so pretty much in town, or out, Broadband is available.
Our village sits at the base of Mt. Cotacachi which bristles with broadband towers.
Join Merri and me this September 15-17 in North Carolina or November 9-12, 2006 in Ecuador . Meet economic experts from Jyske Bank. Meet Steve, our man in Ecuador, and learn about products to export. Meet our Ecuadorian attorney, Dr. Andres Cordova, and learn how to own real estate in Galapagos and the cloud forests. Meet our tour operator, Santiago Guamani, and learn how to create your own tour business.
North Carolina International Business Made EZ Course details (September, 2006)
Ecuador International Business Made Ez Course details (November, 2006)
In Ecuador international investment courses, we often have Shamans speak right alongside international bankers, so delegates can learn more about merging their outlooks and insights. Here is Don Carlos Pachincha at our last meeting when we took delegates to Peguche Falls.
Until next update, may all your mindsets be good!