The biggest gains happen where you least expect to find them. Would you have considered investing in Russia after its debt default in 1998, or in Brazil after Latin America's last major currency crisis in 1995? In both cases you could have picked up the respective country's blue chips at PEs of 2 or 3. But chances are that the talking heads of the media kept you from doing so. Some Russian and Brazilian shares later yielded more than 10 times the original investment.
Foreign investment : Are you a prisoner of the news?
The trouble with mainstream media, and especially television, is that by and large they say whatever they think most people want to hear. And with us humans being herd animals, they take on a distinctively pro-cyclical approach.
Hence the media reports miraculous profits when the market is near the top, and bangs on about tragic losses when the market has already hit rock bottom, scaring investors out of some fantastic bargains.
Most journalists lack any historical perspective. You can always count on them to project current events well into the future. Whatever the hottest current trend is, the media talks about it as though it will continue to happen forever.
But things do change, sometimes even in a big way. Our job at Fleet Street Platinum Service is to locate such changes before anyone else reports them. We want to help you profit from the news-cycle. After all, a powerful media does contribute to the changes in share prices.
If you know what will be written about or reported on in the months to come, then you have the best chances of making a profit on the market.
Foreign investment : The Middle East is opening up to outsiders
Read our lips... one of the big stories to hit the newsstand later this year is the Middle East Miracle. While the world still concentrates on the tragic bombings in Iraq and the seemingly endless Israeli-Palestinian conflict, another story of potentially much bigger importance is in the making.
Country after country in the Middle East is opening itself up to private, and even foreign investment:
Saudia Arabia is in a push to reduce its dependence on selling oil. Negotiators of the royal family are currently travelling the globe to win private investors. One of the first global players to place a bet on Saudi Arabia is Deutsche Bank. The world's 7th largest bank has just opened the first new foreign bank branch there since 1980.
Dubai has introduced new laws that make it one of the world's best places for setting up insurance companies. Bermuda, watch out! The new legislation was set up with help from the same people that turned Bermuda into one of the world's biggest centres for reinsurance.
Egypt is about to introduce the biggest overhaul in legislation in decades. Instead of having to wait 2 years for a permit to start a business, Egyptians will soon be able to turn themselves into legal entities with consummate ease.
The country has always had lots of entrepreneurial energy - now it's finally getting the structures in place to harvest its people's potential.
Foreign investment : The herd is missing the boat - as usual
We could continue the list of surprising and under-reported economic changes in the Middle East for much longer... But for the time being, we merely want to sensitise you to the fact that it must not necessarily be India or China where you can bag the biggest gains. The Middle East has one of the youngest populations on the planet (40% of the population of Saudi Arabia is under 15) and there is enormous demand for goods and services of all kinds.
As a matter of fact, the bull market for Middle Eastern equities has already begun. The Saudi Arabian Stock Market's All Share Index has risen by more than 214% during the last 5 years, beating the MSCI World Index's 10% drop by leaps and bounds. Yet equity valuations in the area are still - by and large - relatively modest.
And some shares of the region are already listed on Western stock exchanges, making it easy to buy and sell.
One of our members of research staff is already mapping out the entire area, and we'll soon get back to you with the details of what should turn out to be the surprise news of 2004. We promise you that our upcoming MidEast Miracle Report will contain lots of information that you won't find anywhere else... at least not yet.
It's time to sign off for now. The team is throwing up so many exciting investment prospects at the moment that we're having a tough time narrowing them down! We'll be back soon when we've come to a final decision.
Until next time,
Happy global investing
Mark Geoghegan
Special Situations Editor
