International Investments in Czech Bonds of Short Maturity

by | Sep 13, 2006 | Archives

International investments offer greater potential when leveraged and yesterday’s message outlined how the five Borrow Low-Deposit High model portfolios we track are up an average 24% on an equal weighted basis. The Emerging Asian portfolio is up over 84% even though this last year had the second worst emerging market crash in a decade.

That message outlined a new Borrow Low opportunity has emerged for borrowing the Czech koruna. You can read yesterday’s message at International Investments – Out of the Czech Kroner (Koruna)

The ultimate sandwich opportunity is an overly strong currency (the koruna may be) that has a lower borrowing rate than the deposit rate of a perhaps overly weak currency (the euro in this case). The koruna is at an all time high versus the euro. You can borrow koruna for 3.75%. You can earn over 5% in very short term euro denominated bonds.

Take the portfolio below as an example. Assume you invest $100,000 and borrow $200,000 more. Invest $60,000 in each of the bonds below:

CurrencyMaturityBondAppx. Yield as of Sept. 11, 2006
EUR01/02/2008FIRST INV FIN BV5.59%
EUR15/12/2009COLT TELECOM6.48%
EUR01/02/2008FIRST INV FIN BV5.59%

Total annual return on $300,000 $17,124
Loan cost on $200,000 in koruna at 3.75% $ 7,500
Annual return after interest cost $ 9,624

Your annual net return before fees 9.62%. This 9.62% per annum projection is a very high return on bonds that are quite safe due to their short maturity date. There is low risk of bond defaults in such a short maturity. Plus there is little capital risk from rising euro interest rates from such short term bonds as well. The main risk is a fall in the value of the koruna versus the euro, but since the koruna is at an all time high, there is also a possibility of a short term fall in the koruna which would add to the profit.

Always keep in mind that leverage brings more risk. This is quite a safe MultiCurrency Sandwich but there is always more risk when you have loans in a currency other than which you invest. Never leverage more than you can afford to lose.

Of course the leveraged forex position also adds more potential opportunity. Say, for example, the korua dropped 10% versus the euro over the next year. This means that it would only cost $180,000 to pay off the loan next year. If this were the case, the profit would be $29,624. Conditions suggest that a weaker koruna is possible in the next year.

You can get further information on how to have a Czech koruna loan from Thomas Fischer at

There are other risks, such as the possibility that koruna interest rates rise. The downside on this portfolio is that loan fees are geared for five years. A one year investment absorbs that entire cost. However if the koruna downfall is enough this cost ($2,000) is small, plus after the year you still have the loan availability for four more years without added loan costs.

One way to reduce this problem is to invest in longer term bonds which pay even more. We’ll see how much more in tomorrow’s message. Be sure to stay tuned for this week’s message that focus on the 5 types of Czech MultiCurrency Sandwiches…each with greater risk and potential.

Learn how to double your profit potential with Czech MultiCurrency Sandwich and more. Get a FREE nine chapter report and one year’s Borrow Low-Deposit High tracking service. Learn how to leverage investments in top value markets. See Annual Multicurrency Service

Join Merri and me this November 9-12 in Ecuador. Meet economic experts from Jyske Bank. Learn more about Borrow Low-Deposit High. 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. See real estate and enjoy the high Andes. See International Business Made EZ

Natural Health Tip – Gain Natural Health and Intelligence in Autumn’s Fast. See Calorie Restricition Makes You Smarter

Ecuador Real Estate – Combined International Business Opportunity

Ecuador real estate in the Andes is filled with beauty. Thanks to reader Eugene Price an American who libves in Quito for this great shot.

The Borrow Low – Deposit High MultiCurrency Sandwich offers great opportunity but the highest opportunity of all is your own international business. This is why we are showing how to enhance an international business micro focus through the Business Evolutionary Cycle at our upcoming publishing course.

Many readers have expressed confusion on how this opportunity works. For example here is what a reader who is exporting from Ecuador recently wrote:

“Gary, My passion for horses has never weaned. Your article about the potential for generating income by writing is certainly far fetched for me as my last companion who finally left me always criticized me because she couldn’t stand my poor grammar. I just couldn’t get the difference in my mind about when to use, gone vs. went! I guess that is my farm boy upbringing. It drove her crazy! If you look at my web site you can see that I have a lot of horse related items to sell, however not much success at selling them. So I set up the second site that focused on one item in particular and that is my present effort. I have been meeting quite a bit of difficulty trying to get a saddle pad made in Ecuador and believe me, Steve Merchant has been a big help. The article about writing is a nice offer and a great piece for someone who has better grammar than me.”

My reply may help you see how to spot greater international opportunity by applying the International Business Evolutionary Cycle to an international business micro focus.

I replied: The main focus of our writing course is not writing. It is marketing! Publishers are not writers. Publishers market information. Publishers do not have to write well or even write at all.

Some publishers choose to publish what they write. This does not mean they write well. One of the great newsletter publisher-writers, Harry Schultz, created his own language and avoided the problem of grammar. He uses U for you, shur for sure and thanx for thanks, etc. Take a look at International Harry Schultz Letter

Or you can publish other people’s information. Another friend years ago just had a newsletter of newsletter quotes. One of my previous newsletters (Fund Help International) was all numbers. Micky Enright, a real estate broker in Naples, learned how to publish a compilation of facts about Naples real estate to put into a brochure that helps her get listings and sell real estate.

There are infinite variations of ways to publish without writing. Do not let the criticism from anyone (people only criticize to cover their own feelings of inadequacy) or anyone ever hold you back. We are each unique with unique talents and skills, unique strengths and weaknesses. No one excels in everything. Negative people are insecure and will always focus on your weakness to try and bring you down to what they perceive is their level. Whether you choose to come to our course or not, never let anyone do that!

In your case you have an added advantage. You already have an export business in Ecuador so can use publishing to support that business! For example you could publish a calendar of beautiful horses, or do reports on wonderful rising journeys or a catalogue of “cost busting horse goods.” Again the variations are almost infinite. The goal of the self publishing writer’s camp is an eleven step process that helps you identify your passion, turn it into a micro focus and then this into a profitable business using the Evolutionary Business Cycle. Regards, Gary

Learn more about the International Business Evolutionary Cycle at International Business Evolutionary Cycle – The Millionaire Maker

Learn more about Micro Focus at International Investments – Investments in Global Micro Focus

Whether you have international investments or an international business, use the Evolutionary Business Cycle to gain freedom and everlasting wealth.


P.S. Enjoy the following services and courses in Ecuador in the autumn and winter of 2006-2007.

October 12-16, 2006 – Learn how to learn, retain and process information better + Spanish. Super Thinking + Super Memory + Spanish

November 9-12, 2006 – International Business and Investing Made EZ – Ecuador

November 13-15, 2006 – High Andes Tour. Discover the Mystical Andes

January 5-7, 2007 – Inspired Investing beyond Logic. Vedic Astrology in Ecuador

January 8-10, 2007 – Ayurvedic Cleanse.

February 2-8, 2007 – Learn how to Earn anywhere through Import – Export. Gary & Merri Scott’s Import/Export Expedition in Ecuador

Any time that space is available. Rejuvenate your health with a week’s R & R at El Meson.
See R & R at El Meson

Any time that space is available. Stay a month in El Meson and enjoy the full winter sun. El Meson da las Flores Hometel