International Investments in Eastern Europe – Leverage the Reform

by | Oct 31, 2006 | Archives

Investing in Eastern Europe is a good way to fight inflation. Eastern Europe had many dynamic economies before the Cold War and now has merged again and is growing more rapidly than established Western economies.

We’ll be noting this fact as we add new portfolios to our Borrow Low – Deposit High Educational Service. As mentioned in yesterday’s message, we started five model portfolios October 21, 2005 and we reviewed them bi-weekly through the year.

During mid 2006 we had to cope with the second worst emerging market crash of the decade from March through July 2006. Despite this we have came through the year satisfied with the results of these real time, case studies. The performances of the five portfolios from October 21, 2005 to October 21, 2006 were:

Emerging Asia

+ 110.48%
Emerging Currencies
+ 42.86%
US dollar Hedge
+ 10.60%
US dollar Long
+ 8.81%
US dollar Short
+ 7.32%

Now we are adding several new portfolios. One of these portfolios will be an Eastern European Emerging Portfolio. leveraged with a Czech Koruna loan.

The portfolio will borrow Czech koruna and invest the loan in the Jyske Invest Eastern European Equity Fund which is invested in Eastern European markets including Russia and Hungary as well as the Czech Republic .

This Jyske Fund has also performed really well in the last five years, up from 110 euro to 500 euro since 2001. That’s an increase of 3.54 times.

If you had invested $100,000 and borrowed $200,000 more in Czech koruna at 3.75% and invested in this fund for the past five years the initial $100,000 would now be worth over a million dollars!  Your loan costs would be $37,500. Your profit after interest would be $1,024,500 on $100,000 of cash invested.

Past performance is no guarantee of future profits though. In fact such high performance may not materialize. Three of the four major Eastern European markets, (Czech Republic, Russia and Hungary) are now all neutrally rated by Keppler Asset Management as of October.

On the other hand, Poland has just been added to Keppler’s buy recommendations and since Jyske employs a similar system (VAMOS), it is possible that we’ll see the Jyske Invest managers take advantage of this good value opportunity. See

To learn more about VAMOS see

Whatever happens, we’ll learn…this is the purpose of our Borrow Low service. The return of Eastern Europe is a legacy of lunacy past. These great nations should never have had to catch up. The people of Russia, Hungary, Poland, the Czech Republic and other nations were hindered by the Soviet concept. However, now they are reapplying capitalism with dynamic results. We can help the process and profit from it!

Until next message consider how going East may help you live better in the West.


P.S. During its first year, our Borrow Low – Deposit High Educational; Service, had the fortunate offer to be taken over by one of the largest publishing companies in the US . We looked at this offer in many ways and finally had to decline due to differences in various philosophical ideals. It seems that our desire to provide an intimate, fast paced, real time service, does not blend well with the restrictions that larger institutions must apply to themselves.

During this trial (and negotiating) year we maintained an artificially low price ($99 per annum) for our charter members of the service. Now are raising the annual fee to a higher, more sustainable level ($149 per annum).

However you can still enroll (until next week) at the $99 per annum price.

We’ll be doing an annual summary of the five portfolios we began with plus introduce the new portfolio models we’ll study over the next year. You’ll receive all this in an immediate enrollment,. Details are at

One reason we love Ecuador is the wonderful Andean art and music. Our village of Cotacachi is known as Ecuador ’s center of music. The musicians above are performing for our previous group near El Meson de las Flores.

Join Merri, Jyske Bank and me at our upcoming November International Business and Investing Course in Ecuador . Learn how to diversify globally. See