Multi currency portfolios are up. Our latest multi currency update which comes out this afternoon focuses on two of the six multi currency portfolios we track, the US Dollar Short Non Leveraged multi currency portfolio and the green multi currency portfolio. All six of the multi currency portfolios are rising since last update. These two are up the most.
Both of these portfolios contain valuable lessons.
The first lesson, from the US Dollar Short Portfolio, is that a well balanced multi currency portfolio won’t do all that badly even in pretty bad times.
This has been a pretty bad time for equity prices. Global equities as a whole dropped for their fifth consecutive monthly loss in March, 2008. The last time this happened was in September 2001.
Bear markets tend to drop much faster than bull markets rise. Pain I guess is a better motivator than greed! So equity markets revalue quickly…especially when a bear market is accompanied (or caused) by a failing economy. Stock markets drop faster than economies do, so before the economy recovers, share prices become under priced.
There is a time when the economy continues to drop but share prices have fallen so low that intelligent buyers step in and share prices begin to rise.
This may be happening now. We’ll see in the next month or two.
If so…then the worst is over in the current bear market.
If so…the Dollar short non leveraged portfolio did not do badly.
This portfolio has performed better than we might expect considering that a fourth of the portfolio was in shares of Jyske Bank. Banking sector shares were hit hard.
Shares were hammered in Europe and Asia as they were in the US.
The dollar short portfolio held up in part because all of its shares were in strong currencies in Asia and Europe.
This portfolio does not look so good to European investors who maintain their portfolios in euro!
Currency diversification can add a buffer during global bear markets.
The Green Portfolio has another lesson as it recovers faster than any of the other multi currency portfolios.
This is because big problems create big opportunity.
There are fewer problems as big as diminishing natural resources. The Green Portfolio is invested in two of the three investment sectors I call the “Holy Trinity Investments of the Here and Now” timber…water and alternate energy.
The lesson here is that even in bear markets, major fundamental trends hold up.
If it were not for a short term forex loss, the green portfolio would not even be down sort term…in the last five months.
A longer view looks pretty good.
Had you invested $100,000 in this portfolio when we started it 17 months ago, assuming that you held on through the five months drop, your portfolio would now be worth just over $250,000 in 17 months.., or up about 150% or 8.8% a month…not bad considering this has been one of the worst global equity markets in many years.
The main reason for this performance are two shares in the portfolio, Danish, Vestas Wind Systems and Japanese, Kurita Water Industries.
Jyske currently has a buy signal for Vestas Wind Systems, which is the largest wind turbine maker in the world.
The current share price is 459 Danish kroner. Jyske’s target price is 610. The bank feels that the company has:
#1: Attractive relative valuation.
#2: Good market conditions with a strong demand, which
results in higher prices and better contractual conditions.
#3: Better internal processes contribute to higher
Kurita Water Industries has a current share price of 3820.
Kurita is a 60 year old Japanese company that provides water and environmental management through two divisions. The chemicals division provides boiler water treatment chemicals; cooling water treatment chemicals; wastewater treatment chemicals; process treatment chemicals; incinerator chemicals; equipment and systems for water treatment chemicals; and customized services, including a steam supply contract and blanket contracts for factories. The Water Treatment Facilities segment provides ultra pure water production. wastewater reclaim systems, wastewater treatment systems, tool cleaning, operation and maintenance services.
The company has good global clients operating in Japan, South Korea, China, Taiwan, Singapore, Indonesia, Thailand, the United States, Germany, and Brazil.
The shares of the company have risen steadily over the past five years from 1,200 yen per share to 3,820 now. Here is its five year chart of Kurita’s share price. You can see the dip in share price when the global equity bear began but also see how quickly its price recovered.
There you have it…two good shares in the Holy Trinity of wood, water and energy.
Learn more about the third at Multi Currency Investing in Solar ETFs
Learn how to get the entire multi currency update.
Until next message, I hope you have good global investing everywhere.
Join me in North Carolina with Thomas Fischer from Jyske Bank for an update of the portfolios and more. May 23-25 International Investing & Business Made EZ.
Here is one of our multi currency course groups.Everyone learned except perhaps Ma , our hound.
Here several delegates walk to our house for lunch.