Multi Currency Profits

by | May 12, 2007 | Archives

Multi currency profits are high now. Here is an excerpt from our Multi Currency portfolio educational service that is worth noting now.

Multi Currency Profits Quote:

“Here is the latest (mid month) review of the five multi currency portfolio’s we have tracked since November 1, 2006 (six months).

Multi Currency Portfolio

Portfolios 2007Dec 29Jan 30Feb 26Mar 27Apr 30May 11
Swiss Samba8.10%10.18%20.49%16.15%26.60%32.86%
Emerg Mkt15.11%14.83%19.69%12.81%32.46%31.13%
$ Short12.91%9.71%18.17%20.12%30.79%30.44%
$ Neutral7.94%12.63%20.28%16.58%25.58%28.54%

Recently one of the personal at Jyske Bank who helps us develop this multi currency service shared this thought.

“Gary, I hope you realize that these performances (also those of last year) are beating many of the best known and most reputable money managers in the world. Sometimes buy and hold in a well diversified portfolio offers so much more value than often traded portfolios (the commissions are lower and that surely is a good thing for an investor). The old adage ‘Keep it simple holds true’.

“Some managers charge a yearly fee of 2%-3% + 15-20% of the profits so our combined services (i.e. you bring the ideas to the table and we structure the portfolio) offer great value to your readers and investors.

“You are not writing about what you could have made using hindsight and the opportunity to pick the most opportune investment at the perfect time.

“This is an upfront service with all the picks out in the open from day one and then a bi-weekly follow-up. We have also seen some hiccups as happened last summer when 5 months of performance disappeared in 4 weeks but you kept the performance numbers coming even in the time of adversity. It is always easy to boast about returns in good times but being visible, honest and helpful in bad times is the hallmark of a great service.”

Although it is always nice to read such accolades we must give full credit to the brilliant people at Jyske Bank who selected these shares based on Jyske Invest’s VAMOS (Value-Momentum-Strength) system. Obviously Jyske Invest’s system works.

We should also especially pay attention to the comments about “keeping it simple” and about providing help in the bad times as well as good.

This is important right now because I have been warning about a current triple risk that could bring some short term bad times.

There is a collision of numerous factors that create special danger now.

First the yen is about to revive. Historically the month of May sees a revival of risk aversion. Risk aversion is a key to the Japanese yen’s value. If many of the investors who have borrowed yen start buying yen to pay off their loans, the yen value could dramatically jump. (This creates a special word of caution for the Green Portfolio.)

Second, spring is automatically a riskier time than autumn for investing in shares. Historically the best months for equity profits are November through April.

Third, these two facts, the stronger yen and spring, now coincide with a huge carry trade (loans to buy shares) in many equity markets.

Investors are nervous because of their leveraged positions. If fear sweeps the market, these investors will quickly dump shares to pay off loans. This will push markets down, especially the thinner emerging markets.

So let’s keep it simple and notice that the emerging Market Portfolio has dropped, just a tiny bit in the last two weeks. A tiny drop of this amount in two weeks is not significant but combined with all the other factors it is worth taking a look.

Until next message, good investing!


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