Multi Currency Portfolio Update #24

by | Aug 31, 2007 | Archives

The latest review of the five multi currency portfolios we have tracked since November 1, 2006 (ten months) reflects a sharp recovery to the mid month drawback in the market.

Wow! What two weeks can do. We are just back from speaking at the Jyske Bank seminar in Copenhagen . The main theme told by the Jyske Invest portfolio managers was “do not worry about short term moves.” We have seen plenty of those short term moves in August and the Jyske Invest managers are correct. They meant little.

The powerful recovery to these portfolios enforces this idea.

The tendency for investors is to look at the July 20 high and say “the portfolios are really down since then.” Or another tendency is to look at just the total ten month performance and think, “that’s really good – too high to invest now.”

Yet three of these portfolios are back up 50% in two weeks, almost exactly what they had lost in the two weeks before.

The lesson here is:

Either invest in long term value or very short term volatility…or both.

Sharp investors with large amounts of capital who are trading by the minutes may have picked up huge profits in the last two weeks. The may have doubled their money (with short sales) on the way down and ditto when the market came back. These investors are not investing in the price movements of shares! The price movements are unknown. These traders are investing in the principle of volatility. What they know is that share prices will move illogically (when compared to value) in the short term.

Then there are those of us who believe in buying good value and long term growth. We believe that these portfolios represent investments in good value. So we believed that the shares were still in a solid position when they dropped 50% in two weeks. This fast recovery fortifies this fact. Had we skipped the August 17 update we would not have even seen a problem.

The indicators we shared in update #23 suggest an upcoming bear market could begin any time (or be here now) and last as long as 32 months. For most of us the bear will create a good buying opportunity.

Currently shares may not offer such a great value…but if the markets correct, they will.

We look forward to seeking these good values out with you in these updates.

See, the Emerging Market File.


P.S. Thomas Fischer from Jyske Bank and I will unveil the 2008 portfolios at the International Business & Investing Made EZ course in North Carolina, September 14-15-16, 2007. We hope to see you there. Details are at

Or join me and Jyske Bank at our hotel El Meson de las Flores for

International Business & Investing Made EZ in Ecuador , November 9-10 and 11.