Investment Valuation Threats

by | May 3, 2007 | Archives

Investment valuation threats can be beat in at least three ways.

Night in the tropics, air so soft it is 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 2, 1968. I had no idea about investment valuation threats…though I sure do now.

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 swept over me. But there was excitement too. An incredible journey was about to begin.

Here I was, 21 years old


Here is the first stamp in that first passport.


Who could have known how exciting the next 39 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.

Investment Valuation Threats Goal

One goal at this site is to share basics of global investing and living an international life learned over these 39 years. To help readers learn about value and investment value threats. Global investing has changed during this time but fundamentals remain immutable. We move inaccurately through the mists of the here and now, blindly trying to see what we cannot (the future) but unable to stop trying. Our goal is to share the excitement, the fun, the incredible fulfillment that growing in this ever expanding universe can bring.

Investing globally is not a panacea. There are investment valuation threats everywhere. But expanded horizons are. Life is a trip and we have an entire globe to enjoy the ride.

Our last two messages have looked at several warnings on investment valuation threats. Markets may be over valued. History suggests that this is a time when chances are increased for panic and sudden drops in investment markets. Investors who have proven themselves nervous short term thinkers are highly leveraged, in thin, over purchased markets that are easily sinkable boats treading the dangerous waters of May though October when tradition says the currents will most likely be treacherous and surrounded with lots of storms.

Yet there are three ways to sail through these investment valuation threats.

The first way to avoid investment valuation threats is to take a long term, expansive international view.

My first trip abroad 39 years ago was significant because 1968 was the beginning of a new era for world stock markets. When I arrived in Hong Kong the world of investing was dominated by Wall Street. That was about to end. 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.

I can sum up my investment basic advice in seven sentences.

#1: 1970s. Invest in real estate, gold, silver Japan, Germany, Switzerland and Hong Kong.

#2: 1980s. Invest in real estate, the Tigers, Japan, Taiwan, Singapore Malaysia and South Korea as well.

#3: 1990s. Invest in real estate South America (which led me to Ecuador ).

#4: 2000s. Invest real estate, China, India and emerging markets.

#5: Always have an expansive view.

#6: Use stop losses during peaks.

#7: Have an international view. Never overextend. Don’t trade too much, just hang on.

This philosophy has reaped millions for Merri and me. Had we been more expansive we would have an extra $20 million or so. Some day I’ll write about my seven biggest mistakes. They cost me at least $20 million and were all from selling too soon and/or not hanging on.

Tip #2. The second way to avoid investment valuation threats. Trade really short term. I am not a trader but for those who do this well, these turbulent times can be best. Traders make money from market and currency moves up and down. Down markets move faster and reap larger profits in a short time than upward moves. Since this is not my realm, let’s not say more. If you are a trader, you know it. If not avoid this tip. The few traders who do well do so at the expense of the rest of us.

Tip #3. The third way to avoid investment valuation threats. Turn your passion to profit. Many people are so miserable at work that they would happily abandon their jobs if they had enough money to feel rich.

In reality, money is not richness or wealth. This requires a state of mind instead. One way to develop this everlasting wealth is to create a PIEC experience.

PIEC is an acronym for “Personal Income Earning Corridor”. This is the personal concept Merri and I use.

Traditionally people get jobs to create income. They work to live and support their lifestyle while attempting to spend less than they earn. Maybe the savings will bring, some time in the future, a lifestyle of doing something enjoyable without work.

PIEC investors reverse the priorities. Instead of working for money to save and invest. They focus their prime effort on doing something they enjoy right now. Then they learn how to enjoy the effort in some profitable way. They learn to create “Avenues of Abundance” that combine lifestyle with the necessary task of accumulating wealth.

For example, if a PIEC investor loves golf; instead of working six days a week, 50 weeks a year just to golf on Sundays and during short vacations, instead he’ll create a business in some aspect of the golfing trade.

In another example, a client of mine, who loved animals became a vet. But he learned that the vet’s lifestyle was not one he enjoyed. He wanted to travel and move around, which is difficult for a professional who needs to stay at his office and build a practice. So he built a business that prepares special animal foods for race horses. Now he travels globally visiting horse breeders and makes much more money as well.

PIEC investors combine money with time, energy and desires. They generate income doing something desired. Desire and fulfillment become at least as, if not more, important as the money.

Do What You Love!

The reason PIEC investing works well is that when we love to do something, we do it better, for longer and with greater enthusiasm.

These are wealth building attributes that cannot fail. Yet PIEC investing does not mean we should suddenly abandon our jobs and try becoming golf pros, when we have never been able to break 100. Smart PIECS often require a gradual approach.

For example, as a writer and lecturer, I was never fully satisfied sitting behind a desk or standing on a podium all day long, even though I was making over a million bucks a year. I’m the physical, outdoors type and yearned for exercise and the wilds of the deep woods. “What good’s the money if this isn’t fun?” I often asked myself.

Rather than quit writing and teaching, I looked for ways to combine these professions with the outdoor life. Through research I learned that many like myself yearn to be in the primitive outdoors. So we bought an isolated farm high in the Blue Ridge Mountains and an Andean plantation high in Ecuador where I am developing seminar centers with charming but simple dwellings, set in rustic surroundings, with clean water and pure air. Now I can teach in a primitive setting and after I finish the writing or talking, I run up into the woods with an axe and clear another cabin site or something physical like that. I’ve combined my writing with physical work and have blended the life I want, with my readers’ needs in a way that makes great financial sense. The cabins are projected to bring more profits than most stocks or bonds could ever return.

Those who work nine to five can start PIEC businesses part time if they are too uneasy to quit their jobs. Others, who like myself, already have a business can slowly shift their product or service in a sensible way and let it evolve toward their PIEC.

Until next message good investing!


At our upcoming IBEZ in N.C., we will look at how to use leverage in the upcoming economic scenario. Join us May 25 – 27, 2007 at the International Business and Investing Course in North Carolina. Thomas Fischer joins me to update global economics there. See International Investments and International Business Course, West Jefferson, North Carolina, May 25-26-27, 2007