The road paving we have been tracking is now done.
In two directions…
in less than two weeks.
We keep our eyes open every day and the search pays off.
Today, near Primavera II condos…
Around the corner from Cotacachi’s Mayor’s house (which is for sale) …
we spotted two old houses for sale. This one is $25,000.
and this, $36,000.
These fixer uppers have huge lots, in the center of the village. They may be real sleepers. We’ll see as we’ll inspect them on our Imbaburra real estate tour that begins tomorrow.
You can gain Cotacachi real estate information and Ecuador real estate contacts as an Ecuador Living subscriber. See details here.
Speaking of sleepers, this excerpt from today’s password protected multi currency course shows why European shares may be sleepers as well.
Here is the excerpt:
This multi currency update has three portions. First we see anther inflation indicator. Second we update our search for value. Third we end with some answers to questions from lesson one of our new updated primer course.
Recent inflationary events include the support by US authorities of Bank of America with a guarantee of liquidity and capital. B of A faces losses of up to $118 billion dollars.
The government gets shares in the bank worth $20 billion. In other words the government stumps up about $88 billion (that it does not have). This is inflation.
Citibank in trouble as well.
Jyske Global Asset Management wrote in its last market update three days ago:
Fears of further credit losses and rumours of another large US bank being nationalized dragged the international stock market down this week. The New Year rally last week is already forgotten, and investors are anticipating new lows in 2009.
Citigroup Inc. posted an $8.29 billion loss, only a few days after the announcement of their plans to sell the control of Smith Barney to rival Morgan Stanley.
Sales at U.S. retailers dropped in December for the sixth consecutive month (first time since 1992) and the most in three years.
S&P cut Greece’s long-term credit rating to A- with a stable outlook, due to its public and private debt and the budget deficit. The downgrade makes Greece the lowest rated country in the Euro zone.
Market participators are now speculating whether a Euro exit may become an option for some members of the Euro-bloc, analysts view Greece as the weakest economy within the Euro zone.
The European Central Bank (ECB) Thursday cut the Euro zone interest rate to the lowest level in more than 3 years.
As expected the main policy rate was cut by a half percentage point to 2%. The Danish Central bank followed the ECB with an even bigger cut of 75 basis pts to 3%.
#1: Falling interest rates are indicators for increased activity in share markets.
#2: Combine this with the fact that stock funds saw huge redemptions in 2008.
#3: Add in the next fact that international equity funds were among the most redeemed losing about a fourth of their total assets in 2008.
U.S. stock funds only had redemptions of about 10% of their assets. Bond funds on the other hand experienced positive flows in 2008.
This increases my enthusiasm for international shares…especially in Europe.
Low interest rates plus markets that are oversold plus inflation all bode well for shares.
There are four ways to fight inflation; real estate, your own business, commodities and equities. So depressed international equities in an atmosphere of low interest rates spells opportunity.
These three factors are the elements that create value because value investors are generally bucking the trend.
This is why last year my biggest equity position was in the Jyske Invest European Equity fund. I picked a fund that was invested mostly in markets that Michael Keppler of Keppler Asset Mangement viewed as having the best value.
Keppler has changed some of his rankings this month so let’s review the change and see if my position still makes sense.
Let’s look at the geographical breakdown of the Jyske Invest European Equities fund I hold now.
This fund has departed quite a lot from the synchronicity it enjoyed with Keppler’s top values when I invested two years ago. The fund’s portfolio is spread here now:
The fund’s managers report says:
There are prospects of uncertainty in 2009. The world economy is struggling
and the optimism has turned into pessimism. Central banks and governments have been busy introducing rescue packages and interest-rate cuts. The help has been offered, but is it sufficient and when will it begin to show an effect? We
expect that 2009 will bring wide swings in the equity market. A lasting upturn is not likely to be just around the corner. We are still looking at a longer period characterised by uncertainty before the optimists outnumber the pessimists.
For the fund we prefer cheap shares with prospects of earnings growth. That type of shares has historically yielded the best returns.
Though this fund no longer has the same value synchronicity with Keppler that it previously had, I’ll continue to hold this as I plan to increase my equity position. I can balance this fund’s holdings to better match Keppler’s rankings by adding Hong Kong, Singapore, Italian and other funds or ETFs.
You can learn more about Keppler’s market updates and the ETFs we use in our multi currency portfolio as a multi currency susbcriber.
Until next update, good global investing
Join Merri, me and Peter Laub of Jyske Global Asset Management at OUR INTERNATIONAL INVESTING & BUSINESS COURSE IN ECUADOR. We review economic conditions, Ecuador real estate, my entire portfolio plus investing and business ideas for the months ahead.
Your own business is a good way to secure purchasing power. This is why Merri, our webmaster and I decided to create a new course on how to build a web business with a webmaster. There is a special offer on this new course that expired to the general public last Tuesday…but is still available to you. See the offer here.
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Or join Merri, me and Thomas Fischer of Jyske Global Asset Management, July 24-26, 2009 in North Carolina for International Investing and Business Made EZ