Wonderfully Ridiculous Returns

by | Oct 14, 2007 | Archives

Okay it’s time to turn the burner down.  Look at the performance of the five multi currency portfolios we have formed and track with the help of Jyske Bank.

These are really good numbers. Incredible actually…beyond world class. Especially considering that the 2006 Emerging portfolio we created and track was also up 114% last year.

Portfolios 2007Mar 27June 28July 20Aug 17Sept 28Oct 5
Swiss Samba16.15%44.80% 45.84%15.19%44.40%47.94%
Emerging Market12.81%54.31%67.67%30.50%103.22%105.22%
Dollar Short 20.12%33.81%40.31%9.14%42.71%42.06%
Dollar Neutral16.58%37.64%38.07%13.56%34.74%37.19%

The problem is that readers are beginning to think we should expect this type of performance all the time.  Don’t…please or you will be disappointed.

I am start to get requests that suggest some readers are seeing only the upside we currently enjoy. One reader recently wrote:   “ Gary I want to set up a multi currency sandwich without risk. I do not need the fantastic returns and can do fine with just 20% per annum.”  

20% per annum is more than a fantastic return. If you can attain this on a log term basis you are one of the best investment managers in the world!

We’ll always do our best and 2008 could be a very good year.  Returns in equity markets have been phenomenal in the past four years…due to high GDP Growth and falling interest rates. Earnings growth has explained more than 100% of global equity returns in the past and unusual bull market. There has not been a general expansion of P/E multiples so far.  Global P/E ratios are about the same now at 15 times earnings, about the same as 1987 before the rose all the way to 24 in 1999 which leaves the equity markets less vulnerable than normal. Equities are not expensive.

Yet keep in mind that though equity markets are efficient in the long run they are not effective short term due to human behavior.

Please remember the following rules of thumb about investing.

We should expect 7% to 10% annual return in the stock market as a function of global nominal GDP growth and long term earnings growth plus risk premium over bonds.

Getting higher growth comes from increased risk or luck.

We have increased risks through leverage at a time of strong market growth.  Our value analysis has allowed us to even enhance the returns more.

We always like to put together top performing portfolios but our mission statement is to track portfolios and learn from them as they rise and fall.  Periods of high performance are followed by times of low returns.  We never know for sure when an upwards cycle will stall.  

Fundamentals look good for a bright 2008 in emerging and equity markets, but this can change quickly so to give our readers a better perspective, this year we are reducing leverage and adding a sixth portfolio with no leverage to study.

You can learn why this performance has taken place in a sixteen page email report about how 13 economic forces now clash to shape investments markets ahead that show the rewards and the risks.  The report also outlines the

five Multi-Currency Portfolios we are tracking in our Borrow Low-Deposit High Multi-Currency Sandwich Educational Service. Details are at https://www.garyascott.com/catalog/bldh

Low Subscription Update. There is one last chance to take advantage of the low subscription fee.  The publisher we are working with conducted its first test market and just wrote to me.

“ Gary , The price test at $249 didn’t win out.  We’d have to test it again to get a more conclusive result.”

This means that you can start your subscription at the low, existing $149 price only today.  To take advantage of this and save go to www.garyascott.com/catalog/bldh

Until next message, may all my concerns be wrong!


P.S.  I write and speak mostly from experience… not theory. This means I have my own multi currency portfolio (and have for decades).  I will review this at the November courses. Join us at our Hotel Meson de las Flores for our next three courses or just the International Business & Investing Made EZ in Ecuador , November 9-10 and 11. https://www.garyascott.com/catalog/IBEZec/

I have invited Peter Conradsen and  Henrik Villumsen from Jyske Bank to speak and be available for private consultations (no added cost) at the November 9-10 and 11, International Business & Investing  course in Cotacachi but have also.   Jyske Bank is one of the leading international investing and currency managers in the world. Their trading room process $50 billion of business a day. So this next course makes a huge amount of global investing information available to you.

We also invest in global real estate and one of our purchases is the hotel, El Meson de las Flores , where we conduct our courses.

Delegates love the warm, colonial atmosphere so conducive to learning, the friendly staff and really low room rates ($49 to $69 plus 22% service and tax).   This includes a delightful and huge breakfast including fresh squeezed tropical juice, fresh fruit, granola or quinoa, eggs, ham or bacon, toast and coffee, tea or herbal tea served Al Fresco in the sunny courtyard.  Ecuador ‘s weather in November is normally perfect, 50 degrees at night and mid 70s during the day with full sunshine…a nice break from northern autumn’s grey.


You can see more about El Meson, where you can stay (subject to availability) during the course at http://www.successguidelines.com/ecuador_real_estate/ecuador_real_estate_62.htm

Join us in Ecuador for all three of our November courses and save $398. See https://www.garyascott.com/catalog/ecuador-tours-november-2007