Canadian Investing Opportunity

by | Mar 5, 2019 | Archives

Here is a stock market warning and an opportunity for profit.

I track the advice of three investment analysts.  Keppler Asset Management, and ENR Asset Management in Montreal Canada.  ENR is one of the last SEC registered advisors that can help Americans set up investing accounts overseas.

Each month ENR CEO Eric Roseman sends an Advisroy extra bulletin to ENR’s largest clients.  This bulletin is only available to ENR’s special clients and to our Purposeful Investing Course subscribers.

This month Eric’s Advisory Extra delivers a stock market warning and shows an opportunity in global shares.

The Warning

Eric writes: Markets, however, have gained more than 17% off the December 24 lows based on the MSCI
World Index. Though this is the best start for investors since 1987, some pullback or deep
correction lies ahead as we approach Q1 corporate earnings season; a surging USD will make
revenues challenging this winter coupled with the disappearing effects of earlier tax changes.

Earnings aren’t going to be pretty.

The S&P 500 Index and the MSCI World Index have surged since January 4th following the
Federal Reserve’s pivot to neutral. The Fed has literally abandoned its monetary tightening
campaign since December 2015 in the face of plunging asset markets, buckling credit and
falling consumer confidence since December.

Consumer confidence has since rebounded but many important gauges tracking credit continue to deteriorate, including residential mortgage demand (now contracting); commercial real estate loan demand (contracting); credit card demand (contracting); auto loan demand (contracting) and consumer loan demand (contracting).

There’s no doubting credit demand is faltering.

It’s hard to imagine the Fed bailing on rate hikes when the U.S. unemployment rate sits at its
lowest level in 50 years. It’s unheard of.

But dig deeper underneath the surface and the credit markets have started to buckle, including the ‘bubble’ in leveraged loans, high-yield, student loans, credit card debt and collateralized loans.

Wall Street never learns from its mistakes.

It also concerns me that commercial and industrial loans are contracting year-over-year, mortgage originations are down considerably since last year and consumer auto loans are the highest on record with a good chunk of outstanding originations in the ‘junk’ category.

Again,this is typical of late-cycle economic activity when the consumer and corporations are
leveraged, and governments have issued record levels of sovereign debt.

Then there’s S&P 500 Index, which ties in to my USD concerns.

The S&P 500 Index, in my view, has already entered an earnings recession this quarter and faces big hurdles as corporations report first quarter earnings later in April. The US Dollar is too strong. The USD
Index has rallied 6% year-over-year — one of its biggest gains since 2014. With the S&P 500 Index getting about 44% of revenues overseas, the dollar has a dramatic effect on earnings.  In any given year, the dollar’s performance impacts about 45% of net earnings, according to Morgan Stanley.

The dollar is going to hurt companies this quarter. As an important side note, the dollar’s ongoing ascent might also be telling investors that perhaps the Powell Fed isn’t done raising interest rates, despite his admission to ‘pausing’ in January. If markets climb to new highs again, the Fed might raise rates later this year, and that won’t be good for stocks.

The Opportunity

These global economic circumstances are changing investing trends and another analysts we track shows that value shares are starting to heat up.

Eric confirms the profit opportunity in this ETF.

Eric writes: I continue to advise gradually increasing exposure to global equities with a tilt towards the
emerging markets and value-based securities.

That’s especially the case when markets decline. Stocks have enjoyed huge gains since early January with no signs of weakening, supported by strong market breadth and a Fed now on their side. Also, the individual investor, who sold U.S. stock mutual funds and ETFs in 2018 (a good call) are still net sellers in 2019.

The Fed may have given a ‘green’ light to investors to speculate, but it’s imperative
remembering this is an advanced late-cycle global expansion. Cracks in some credit markets
are bearish signs and typical of leveraged expansions. Similar stresses on credit markets
began appearing in 2007 and in 1998. Big risks lie in the investment-grade bond market where issuance went off the charts from 2012 to 2018; almost half of this market is represented by BBB-rated debt or one notch above junk.

It’s an accident waiting to happen when defaults start rising. I’d avoid all bonds, except Treasury’s and some floating rate debt.

The iShares International Value Factor ETF (NYSE-IVLU) gained 1.9% in February and is up 9% this year.  This is the only international ETF I’ve surveyed that’s selling below book-value; IVLU closed February 27 trading at a 4% discount to book and just 9.4x trailing earnings. Big geographic holdings in Japan and Europe. BUY up to $24.50.

I sit up and take extra notice when two of  my advisors tell me the same thing.  My third advisor Keppler Asset Managers, as always recommends an equally weighted portfolio of  good value markets as described below.


Stress Less Investing


The stock market has always been the best place of places to protect and increase wealth over the long haul.   Yet it’s also been the worst place to lose money, a lot of it, quickly.

There are only three reasons why we should invest.  We invest for income.  We invest to resell our investments for more than we had invested.  We invest to make our world a better place.

The goal of investing should be to stabilize our security, bring feelings of comfort and the elimination of stress!

We should not invest in social networked protests that guarantee loss.  This is like burning our houses down in protest.

If we want to change the world, we should invest in good equities that bring profit and use the extra wealth to create something beneficial for mankind.

We should not invest for fun, excitement or to get rich quickly. We should not divest in a panic due to market corrections.

This is why my core stock portfolio consists of 16 shares and this position has hardly changed in five years.  During this time we have been steadily accumulating the same Top Value ETFs  and have traded only a few times.

The study below shows how a value based model portfolio that dates back to 1969 has outperformed almost every stock market in the world.



The US market has not been even close to the top performer over the long term.

The DQYDJ Dow Jones Industrial Calculator (1) shows that an investment in the Dow Jones (with dividends reinvested) has risen at an average of 10.74% over the last 50 (51 actually) years.


That’s 10.74% is pretty good, but an analysis of 51 years performance of all the developed stock markets shows that (using country indices as hypothetical investments) investing in the top value (not top performing) markets would have returned 12.5%.

The chart below shows the analysis.



An annual return of 12.5% compared to the 10.74% US return is a 1.76% per annum difference.  This may not seem like much,

In the long term the difference is huge.  Calculations from the site (2) shows that $10,000 invested at the 10.74% compound rate turns $10,000 into $1,817,734.62 in 51 years.


Wow, that sounds pretty good until you look at the results of the 12.5% rates.  $10,000 grows to $4,062,362.22!

Investing in the top value (not the top return) markets earned $2,244,627.60 EXTRA!


$4,062, 362.22 means you would have $2,244,627.60 MORE by investing in good value markets versus $1,817,734.62  earned investing in the US market.  That almost 125% more money!

Here are the best value developed markets at this time (as of end of March 2021).

keppler 4-2021


No matter how we look at it, over time, value investing always wins!

Our portfolio is built around a strategy that’s taught in my Purposeful Investing Course (Pi).  I call these shares my Pifolio.  The course shows how to use the value analysis of Keppler Asset Management to create a portfolio of ETFs that cover undervalued stock markets.  I have combined my 50 years of investing experience with the study of the mathematical market value analysis of Michael Keppler, CEO of Keppler Asset Management.

In my opinion, Keppler is one of the best market statisticians in the world.  Numerous very large fund managers use his analysis to manage billions of dollars in funds.  However because Keppler’s roots are in Germany (though he lives and operates from New York) all of his funds are registered for the European Union citizens, Americans cannot normally access his data.

I was lucky to have crossed paths with Michael over 25 years ago, so I am one of the few Americans who receive this data so I can share it with Pi subscribers.

The Pifolio analysis begins with Keppler’s research that continually monitors 46 stock markets and compares their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.  Keppler looks at these numbers and takes market’s history into account.

Fwd: keppler

Michael Kepler CEO Keppler Asset Management.

Michael’s analysis is rational, mathematical and does not worry about short term ups and downs.  Keppler’s strategy is to diversify into an equally weighted portfolio of the MSCI Indices of each good value (BUY) markets.

This is an easy, simple and effective approach to zeroing in on value. Little time, management or guesswork is required.  You are investing in a diversified portfolio of good value indices.

A BUY rating for an index does NOT imply that any one stock in that country is an attractive investment.  This eliminates the need for hours of research aimed at picking specific shares.  It is not appropriate or enough to instruct a stockbroker to simply select stocks in the BUY rated countries.  Investing in the index is like investing in all the shares in the index.  You save time and gain incredible diversification because all you have to do is invest in the ETF to gain the profit potential of the entire market.

To achieve this goal of diversification the Pifolio consists of Country Index ETFs.

Country Index ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that track an index of shares in a specific country.  ETFs do not try to beat the index they represent.  The management is passive and tries to emulate the performance of the index.

A country ETF provides diversification into a basket of equities in the country covered.  The expense ratios for most ETFs are lower than those of the average mutual fund so they provide diversification and cost efficiency.

Here is the Pifolio I personally held at the beginning of 2021.   There have been no changes since.

70% is diversified into Keppler’s good value (BUY rated) developed markets:  Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.

30% of the Pifolio is invested in Keppler’s good value (BUY rated) emerging markets: China, Brazil, Chile, Colombia, South Korea, Malaysia and Taiwan.

There is one trick Pi subscribers learn about China which is different from the rest of the funds.

iShares Country ETFs make it easy to invest in each of the MSCI indices of the good value BUY markets.

For example, the iShares MSCI Germany (symbol EWG) is a Country Index ETF  that tracks the investment results of the MSCI Germany Index. The fund invests at least 80% of its assets in the securities of its underlying index that primarily consists of all the large-and mid-capitalization companies traded on the Frankfurt Stock Exchange.

iShares is owned by Black Rock, Inc. the world’s largest asset manager with over $4 trillion in assets under management.

There is an iShares country ETF for every market in our Pifolio.

This year I celebrate my 53rd anniversary of writing about global investing. Our reports and seminars have helped readers have better lives, with less stress yet make fortunes during up and down markets for decades. This information is invaluable to investors large and small because even small amounts can easily be invested in the good value shares we cover in our seminar.

How you can create your own good value strategy.

Stock and currency markets are cyclical.  These cycles create extra profit for value investors who invest when everyone else has the markets wrong.  One special part of your course looks at how to spot value from cycles. Stocks rise from the cycle of war, productivity and demographics.  Cycles create recurring profits.  Economies and stock markets cycle up and down around every 15 to 20 years as shown in this graph.

The effect of war cycles on the US Stock Market since 1906.

Bull and bear cycles are based on cycles of human interaction, war, technology and productivity.  Economic downturns can create war.


The chart above shows the war – stock market cycle.  Military struggles (like the Civil War, WWI, WWII and the Cold War: WW III) super charge inventiveness that creates new forms of productivity…the steam engine, the internal combustion engine,  production line processes, jet engines, TV, farming techniques, plastics, telephone, computer and lastly during the Cold War, the internet.  The military technology shifts to domestic use.  A boom is created that leads to excess.  Excess leads to correction. Correction creates an economic downturn and again to war.

Save $124.50 If You Act Now

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but to introduce you to this online, course that is based on real time investing, I am knocking that down to $174.50 in this special offer.  Plus I am reducing annual renewals from $299 to only $99.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.   I call this strategy Purposeful Investing (PI).  You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

You get this course when you enroll in our Purposeful Investing program (Pi) with a triple guarantee.

Triple Guarantee

Enroll in Pi.  Get the 130 page basic training, a 46 stock market value report, access to all the updates I have sent in the past five years right away, plus numerous updates over the next year. 

#1:  I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free, easy diversified investing.

#2: I guarantee to send you monthly updates that are based on a study of every share in 46 stock markets around the world.  These updates will show the values, the earnings of all these markets and categorize each market as Top Value (buy), Neutral Value (hold) or Poor Value (sell)

#3:  If you are not totally happy, simply let me know. I guarantee you can cancel your subscription within 60 days and I’ll refund your subscription fee in full, no questions asked.:

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential.

When you subscribe to Pi, you immediately receive a 120 page basic training course that teaches the Pi Strategy.   You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

You also begin receiving regular emailed Pifiolio updates and online access to all the Pifolio updates of the last five years so you can back track if you desire.  Each update examines the current activity in a Pifolio, how it is changing, why and how the changes might help your investing or not.

Subscribe to a Pi annual subscription for $174.50 and receive all the above.

Your subscription auto renewal will only be $99 a year from now, if you renew, but you can cancel at any time.