[Tail Gunner]

(09-29-2017 07:31 PM)Australia Sucks Wrote:  

Tail Gunner, the way I see it is that non-developed markets are good for investing in for those who already millionaires. If you are not already a millionaire the (of course with some exceptions) the headache isn't worth the amount of money you will make (just my opinion).

Yes, I agree. Making a 30%+ return on a $100,000 investment will never allow you to enjoy an independent lifestyle and financial freedom. No one could ever possibly do that.

[Beyond Borders]

(09-29-2017 09:03 PM)Tail Gunner Wrote:  

Pay close attention to the question that Beyond Border posed nearly four years ago:

Quote:

what'd you decide to develop expertise in?

I answered:

Quote:

Offshore living (which is how I found this forum), economics, and business.

Today, I reap the dividends of that decision to invest in a bit of knowledge on a daily basis.

[Australia Sucks]

Tail Gunner I don't think it really works that way. If you want to buy for example an apartment for $100,000 you would have to fly to the country and spend months scouring the country's property markets (i.e. boots on the ground), pay a solicitor, tax lawyer/specialist accountant, conveyancer, translator, international banking fees, currency exchange fees, etc which are all substantial costs just to invest $100,000. Besides I call bullshit on 30% annual return (unless you are counting speculative capital growth or using heaps of leverage) by investing in offshore property or agriculture. Yes I am sure a few people make that sort of return but its probably about as likely as people making 30%+ per annum returns investing in the stock market. Yes somebody could invest in the next Apple and become stupendously rich but how likely is that. Getting good returns is not that hard, getting 30%+ returns consistently is damn hard! Stop overhyping everything.

If you can keep compounding your capital at 30% per annum let me know once you become a billionaire.

[Beyond Borders]

(09-29-2017 06:18 AM)Australia Sucks Wrote:  

There was a guy (his online name is expat Bob) who lived in different South American countries for a while each. He spent some time living in Santiago, Chile (close to the CBD of Santiago). Eventually he ran into some problems with the internet in his apartment and no matter what he did nobody fixed it for him. In the end it was the straw that broke the camels back and he left Chile in frustration. Now imagine that was the most advanced country in Latin America so you have to wonder what the other countries are like. Imagine if he was running a business from his laptop (he may have been)?

Let me get this straight...

Your example is a guy who calls himself "expat bob" online yet is so helpless abroad that the challenge of pulling internet together for his apartment defeated him, crushed his dream of living abroad, and sent him running away "in frustration"?

Hate to break it to you, but I dunno if ole' Bob was exactly composed of the stuff that makes for a successful international entrepreneur.

[Tail Gunner]

(09-29-2017 10:51 PM)Australia Sucks Wrote:  

Yes I am sure a few people make that sort of return but its probably about as likely as people making 30%+ per annum returns investing in the stock market. Yes somebody could invest in the next Apple and become stupendously rich but how likely is that.

Yes, you would need the discipline to study economics and business for thirty minutes a day for seven years, then pull the trigger when the perfect investment opportunity presented itself. Few are willing, but the few are also rewarded when they try and then succeed. That is the capitalist system.

I call bullshit on your lazy defeatist attitude.

[TejasRojo]

Expatbob actually speaks spanish now, divorced his wife while living abroad, and a few other things happened while he was being the expat. He actually had like 3 or 4 different residencies. He's actually a fairly resourceful guy.

Straws that break the camel's back usually look small to outsiders.

I didn't know he went back to Chicago or wherever he's from.

I'm not attacking anyone and I agree with Tail Gunner on a lot of things.

[Australia Sucks]

Tail Gunner I do not have a lazy defeatist attitude. I do plenty of reading on finance, investing, economics, offshore living, etc on a regular basis. I simply choose at this point in time to invest the majority of my money in my home country and so far I have gotten good results that I am content with. Just because some people choose not to invest in developing countries does not make them lazy or defeatist. Stop the bullshit criticism.

Investing in developing economies is higher risk and more work/headache than investing in developed economies. Don't pretend otherwise. Nobody is denying that higher returns are possible. There are legitimate reasons apart from people being stupid or lazy or brainwashed for more investment capital flowing to developed economies than developing economies. I know in Australia many of our companies that expand overseas end up packing up and heading back home with their tail between their legs (and multi-billion dollar write-downs and or asset sales) years later. People should not underestimate the difficulty involved.

That was the only point I was making because you continually seem to suggest to everyone developed economies are a waste of time for investment. I call bullshit on that.

Tail gunner if you are really making returns consistently in excess of 30%, well then assuming you can scale it up, I look forward to hearing about your name appearing on the billionaires list in the future.
Also its debatable if countries you seem to believe are supposedly less regulated or freer (for investment) are actually so. Sometimes you sound like one of those bull shit artist newsletter writers that sell the investing/living overseas dream (written with rose tinted glasses) to people who are completely naive and cannot hack investing/living in a developing country (some people can but usually not the types that subscribe to those kind of exaggerated newsletters).

One of the unfortunate tendencies of the Rooshv forum is to applaud people who make bold claims and over-hype things as being achievers, legends, ambitious, etc and skeptics as being "losers" or "defeatists", "negative", "lazy" etc. Its why guys like G Manifesto and Nasa Test Pilot got a lot of rep points previously. People want to believe positive stories. By the way Tail Gunner I am not saying you did not achieve the returns you claimed.

Tail Gunner I am done arguing with you. Its a waste of my energy.

[Tail Gunner]

(09-30-2017 03:22 AM)TejasRojo Wrote:  

Expatbob actually speaks spanish now, divorced his wife while living abroad, and a few other things happened while he was being the expat. He actually had like 3 or 4 different residencies. He's actually a fairly resourceful guy.

Straws that break the camel's back usually look small to outsiders.

I didn't know he went back to Chicago or wherever he's from.

I'm not attacking anyone and I agree with Tail Gunner on a lot of things.

I also know ExpatBob, although I have fallen out of contact with him. He is a very resourceful, funny, and successful man. His problem is that he is so resourceful that he tries to fix everything himself, which is often counterproductive in a Latin American culture. If he left South America, I have no doubt that it is because he sailed the Zombie Apocalypse (which I had a small hand in naming) to Europe. He wrote one of the funniest blogs that I ever read.

[Tail Gunner]

(09-30-2017 04:37 AM)Australia Sucks Wrote:  

By the way Tail Gunner I am not saying you did not achieve the returns you claimed.

Quote:

Besides I call bullshit on 30% annual return (unless you are counting speculative capital growth or using heaps of leverage) by investing in offshore property or agriculture.

How can people believe a word that you say when you directly contradict yourself in a span of less than six hours? This is seriously pathological activity.

Quote:

Investing in developing economies is higher risk and more work/headache than investing in developed economies. Don't pretend otherwise.

There are ways to make similar returns in the U.S., but I no longer trust the financial system and, as a result, I no longer want to risk the exposure of my hard-earned funds by trading around overvalued assets. For example, I routinely made 20% to 30% plus returns by option trading vertical bull put credit spreads on undervalued stocks. For anyone interested in what I did, here it is (for the love of life, just bear in mind that success is contingent upon selecting undervalued stocks):

http://www.optiontradingpedia.com/free_b...spread.htm

But how do you continue to make such trades in good conscience when you believe that the entire stock market is overpriced (both from a historical and a revenue-based perspective)? In terms of market weight, just the FAANG stocks alone represent over ten percent of the value of the entire S&P 500! Yet some of them, such as Netflix, have never even turned a profit.

Of course, the markets can stay irrational for far longer than any investor can remain solvent by betting against them, so the party may still last a long while -- but I want no part of it. I understand how free markets work, so I prefer investing there rather than building my financial future on a house of cards.

[Australia Sucks]

Its not a direct contradiction. I meant calling bullshit on the fact that people more broadly could get 30% per annum (as you seemed to imply with your comment about $100,000). Yes there are a few exceptions and its possible you may be one of them. I should have explained it better.

Tail Gunner firstly I invest in Australian stocks (my home market) rather than U.S. stocks. Australian stocks have not had the same bull run. As for your comment, yes the larger U.S. stocks look overvalued, but there are over 5000 stocks listed on U.S. markets. Don't invest in large stocks and tech stocks if you think those companies are overvalued. I am sure with over 5000 stocks to choose from that those people who are willing to put in the legwork can find microcap and small cap stocks that are undervalued. The above being said however, I acknowledge that options may not be available on smaller stocks so your options trading strategy may not be currently suited to the U.S. market.

Anyway I am done arguing with you.

[fucksong]

For those of you interested in real estate and looking at %, you're missing the most important metric of all

IRR

Internal Rate of Return

Which takes into account your EXIT STRATEGY. What good is earning double digit % returns when in the end, you might get killed. Want a good example? Pick any single family house in a major market during 2008 subprime crisis. I specifically mention single family house because at least with commercial real estate (apartments, office buildings), it's BASED on cash flow vs single units where the public are just picking figures out of their ass and the appraisers/bankers go along with it because the big boys like Goldman Sachs just pitched that junk off to poor investors who didn't know otherwise.

Also, in emerging markets, there are so many unknown variables that it takes just one to fuck up the entire deal. (ex. Puerto Vallarta, developer had presold many units in a luxury development only to have the bank financing dry up. Japan, property values generally decline as most of the value is in land so unless YOU take into account construction costs, (which nobody does), you're operating on razor edge margins and it takes just one major repair to fuck everything up and there goes your double digit % return.

As for AirBnB, take a market like Las Vegas. TONS of units there but it's actually illegal from what I've heard. I think it might be the same for Hawaii but ppl still do it getting those returns. What happens if one day, YOU get caught and your source of cash flow has now dried up completely? Not saying it will but how does one quantify that and what % would one expect?

In my opinion, it's better to do a business where you're doing something you truly love on a day to day basis. That's something that I've noticed most financial analysts never take into account. The % return on their happiness level.

Peace

[Tail Gunner]

(09-30-2017 09:03 PM)fucksong Wrote:  

For those of you interested in real estate and looking at %, you're missing the most important metric of all

IRR

Internal Rate of Return

Which takes into account your EXIT STRATEGY.

Yes, most investors have no conception of the importance of IRR. Not only does it take into account an exit strategy, but it also also incorporates periods of zero yield. For example, how do you compare residential units that produce a ten percent yield to an agricultural investment that has no yield for five years (while your fruit trees are maturing) but then produces 30% yields once the trees mature? The answer is IRR.

But even then, the usefulness of IRR is capped by artificial constructs. An investor may elect to cap the IRR on the agricultural investment at 20 or 30 years, because anything beyond that timeline is speculative. Yet those trees may produce an income for 60-80 years before replanting is required, providing true generational wealth. So, in the end, even the use of IRR is more of an art form than a science. But it does provide a simplistic yardstick.

Even when an investment is intended as a generational investment (i.e., the cash flow from an investment is so good that you have no intention of ever selling it, but wish to simply leave it to your heirs), it is useful to have a contingent exit strategy in place -- as life is full of twists and turns. Failing to plan is planning to fail.

[Tail Gunner]

Another potential reason to invest in an emerging market is if your home currency is very strong against the local currency. For example, the U.S. dollar has grown so strong against the Colombian peso that the buying power between 2013 and today has increased by over 67%. So, that means that $100,000 worth of Colombian pesos from 2013 are now worth about $167,000 today.

Of course, the opposite is also true. If you had purchased a property in 2013 and wanted to sell your investment today and then convert your pesos into dollars, you might experience a loss (depending on property appreciation and rental yields in the interim). So, it is best to buy an investment when the exchange rate of your home currency is near historical highs and then eventually sell it when the pendulum swings back the other way -- and the local currency is near historical highs. As always, market timing is everything.

This article discusses the topic and contains some interesting charts:

https://eletters.overseaspropertyalert.c...x=05a4cbfa

[scotian]

This thread has turned out to be a great one thanks to Tail Gunner, but I don’t want you guys
To forget that the OP of this the was, JJ ROBERTS: WAS THE BIGGEST FAGGOT IN RVF HISTORY!!!

[Tail Gunner]

An excellent checklist of what to review before investing in real estate overseas:

Quote:

I've bought a number of overseas properties—both for personal use and as investments—and I find that evaluation of a potential property always comes back to a few simple basics. It's a safe and secure process when you follow the rules, and use the same good sense that you'd use in your home country.

For Any Property You're Considering, First Look At These General Items

1) Location: As anyone in the real estate business will tell you, location is paramount. You can fix almost anything else with enough time and money, but you can't fix the location. Make sure it's either good... or that you have a strong reason to believe it's on its way to becoming good.

In addition to the neighborhood, also consider the distance to the airport and to good medical facilities.

2) Walkability and public transit: Where this applies, it's crucial when it comes to resale or renting your property for income. The ability to walk to stores, restaurants, and administrative services will make your own life convenient—if you're using the property—as well as that of your tenants. If your property is not walkable, you may be requiring your buyer/renter to have a car... which is a big factor in a foreign country.

If a city property is not completely walkable, being near convenient public transit is the next best alternative. Of course walkability doesn't apply in remote properties that are intended to "get away from it all."

3) See what's going on next door: In Santa Marta, Colombia, I looked at a beautiful new high-rise apartment, three blocks from the beach, with an impressive view of the Caribbean. When I looked out the window, I happened to notice that the adjacent "never-to-be-developed" property was filled with construction equipment. As it turned out, this neighboring building (undisclosed by the realtor) was going to block most of the view I would have been paying for.

And just south of João Pessoa, Brazil, I looked at a planned community of beautiful town homes a couple of blocks in from the beach. But while driving to the property, I happened to notice a billboard announcing the construction of a massive, low-income housing project on the adjacent property... again, undisclosed.

In Mazatlán, Mexico, a luxury high-rise tower in the Golden Zone was finished and mostly sold-out. Soon after, the apartments for resale—with their magnificent ocean/coastal views—were going for over US$500,000... that is, until the second tower was erected, blocking the views on one side of the building. Immediately, the tower one prices dropped to around $250k.

You can't see into the future, and you can't know everything that will happen. But do keep your eyes open to what's going on in the area around you. I've passed up many condos after seeing a prime building lot next door (or an underdeveloped lot) that could potentially host a view-blocking building.

4) Find (or avoid) the Path of Progress: Take a big-picture look at any major infrastructure upgrades in the works. If you're a Path-of-Progress investor, you'll benefit from construction of that new highway or airport... and if you're looking for continued peace and solitude, you'll want to avoid them. But either way, you should consider them.

In An Existing Building, Also Look For These Attributes

5) Verify a good property condition: Look at paint, general appearance, the pool, grounds, elevators, and facilities. A quality, well-run building is never in a rundown condition. I've heard plenty of excuses about how the Homeowners' Association (HOA) was going to fix things up during the coming year... but a well-run property would never become rundown in the first place.

6) Make sure you have a strong Homeowners' Association: We all know that HOAs are an annoyance. But there's no doubt that they preserve the value of your investment. Make sure the rules for appearance and maintenance are being followed, and that the HOA is well-funded by reviewing their financial statement (your realtor can get this). Compare the HOA fees to other facilities in the area, to make sure they're not exorbitant... but are sufficient.

I looked at several properties in Montevideo, Uruguay, where the realtor proudly told me that the HOA had been disbanded to save money... and that future assessments would be made to take care of any building needs. I called these "dying buildings"... because they were rapidly turning into poorly maintained, shabby properties. Taking up a successful maintenance collection without an HOA is almost impossible.

7) See if they allow—or prohibit—short-term rentals: If you want to rent your property short-term to take advantage of high returns, make sure it's allowed... many municipalities place restrictions on short-term rentals.

But if the property will be your residence, I'd make sure they prohibit short-term rentals, if possible. At resale time, it's easy to sell in a short-term building to another short-term landlord... but hard to sell to a local family. I believe that a building of owner-occupants sells to the widest spectrum of buyers.

8) Look at how many units are for sale: If a mature building has a seemingly large number of units for sale, it could be a sign of trouble... things like a big tax increase, HOA fee increase, or something unpleasant going on in the neighborhood, like a shopping center being built next door. Ask around to find out why there are so many sales, including the building's doormen.

9) Check out the parking lot: This may sound strange... but a building with well-off owners who care about the property will likely have a garage full of nice, well-kept cars. The more expensive they are, the better. If you see old junkers in the parking garage, take it as a warning.

In New Construction And Planned Communities, You'll Want To Verify These

10) Check the number of unsold units: I was looking into a property here in Mazatlán and found a large, brand-new apartment for sale—with an almost-180-degree ocean view—at a good price. But then I noticed that there was another just like it... and then found two more. After checking the building's completion date, I found it was completed and occupied almost four years earlier, yet still had quite a few prime, developer-owned units remaining unsold.

Something's wrong here, and I'm not sure what it is. But I do know this: Whatever is causing sluggish developer sales will likely cause a sluggish sale when you try to sell.

11) Has the project met its milestones/kept its promises so far? It pays to look back to see what the original plan was, and how closely the developer has kept to that plan and its promises.

Is the infrastructure where it was projected to be? The facilities?

I visited a development in Nicaragua three years in a row, and each year, the promised Phase I amenities were "about to start." And each year, they had a new set of flimsy excuses for why the work hadn't begun. Finally, the developers just pocketed the money and walked off, fulfilling almost nothing.

And I recently checked up on a luxury project in Belize. I looked back at their launch materials and saw that they were scheduled to break ground in February, 2016... but as of September 2017, 19 months later, work had not started. This does not exactly inspire confidence in the project.

12) Beware of hand-to-mouth infrastructure: Many planned communities depend on property sales to fund the promised infrastructure and community amenities. I've seen a few communities that were 100% backed without property sales, but not that many.

And I've also seen a number of projects where the infrastructure and amenities never got finished because of insufficient sales, leaving the early buyers holding the bag with unfulfilled sales promises on unimproved land. Some developers went under altogether... others were just crooks and spent the money on other endeavors.

I won't tell you to always avoid sales-funded developments. But if the developer needs sales to fulfill his promises, then it's definitely an item that should be in your "risk" column.

The golden rule here is to "buy what you see." This is an oversimplified way of verifying this: If the project were to stop today—leaving the remaining sales promises unfulfilled—you'd still own something that you believe to be of value.

13) Take a look at the competition in the area: I once looked at a project in Uruguay that was 2.5 miles from the beach, requiring its residents to have a car... let's call it Project A. The houses were expensive by local standards, partly because it was targeting North Americans. Project B, in the same town, was located right on the water, offering brand-new apartments for US$75,000... with plenty of unsold units.

The town became quite popular with expats—partly due to Project A's promotional efforts—but almost everyone opted for the cheaper and more convenient properties in Project B or elsewhere in town. Local competition wasn't the only reason Project A failed... but it was certainly an important factor.

14) Verify the developer can do the job: I won't cover this here, but I do have an essay that deals with it. Follow the link to read up on 10 Questions To Ask Before Investing With A Developer Overseas.

Buying property abroad can be safe, rewarding, and profitable. It's a smart way to diversify your portfolio. Just be sure to follow the rules, and apply the same commonsense behavior you would back home.

https://eletters.overseaspropertyalert.c...x=b0acfdc9

[Tail Gunner]

For those who do not believe that these high-yield offshore opportunities exist, here is an article that I just read today. All it takes is an open mind, some boots on the ground, and your own extensive due diligence. In this case, a lack of liquidity may be an issue if you ever need to sell the stock quickly, but it is certainly a good option for a long-term speculative play. Here is the article:

Quote:

Yup, I’m in Kyrgyzstan, checking off another box, on my long-postponed ‘Stan tour. Like all good adventures, this one started over drinks with some new-found friends.

Him: “You really should go visit our stock exchange.”

Me: “Sure, can you make an introduction to someone there?”

Him: “It’s not needed. Just show up. Don’t worry, they’ll be happy to see you”

The next morning, while shaking off my hang-over, I stumbled over to the Kyrgyz Stock Exchange—which isn’t the easiest place to find. I walked into a dimly lit atrium, past a fountain which hadn’t been used in years and started roaming around—doing my best impression of a lost foreigner who doesn’t speak Kyrgyz, while a security guard yelled at me, waving his arms emphatically to block me. After a few minutes of this, someone official came out and in broken English, motioned for me to come into his office.

Him: “Why are you here?”

Me: “I want to learn about your stock exchange.”

Him: “Why?”

Me: “I’m an investor who’s invested in many frontier markets.”

Him: “There’s nothing to buy here.”

Me: “Isn’t this a stock exchange?”

Him: “Yeah, but too hard to buy anything.”

Me: “Huh?”

Him: “Not much trading.”

Me: “How much has traded so far today?”

Him: (scanning a 15 year old CRT monitor) “We haven’t had any trades yet today.”

Me: “What about yesterday?”

Him: “It was a huge day. Biggest in a while. There were 3 trades.”

Me: “That’s big?”

Him: “Huge!!”

Me: “How much dollar volume?”

Him: “Almost 200,000 Som.”

Me: “Wait, isn’t that less than US $3,000?”

Him: “Yea, it was a HUUUGGEEE day.”

Me: “What do you recommend that I buy?”

Him: “Nothing.”

Me: “Aren’t you supposed to attract investors to create volume?”

Him: “Maybe.”

Me: “What is the most popular stock on the exchange?”

Him: “The Manas Airport Company” (owner of all the country’s airports)

Having visited many frontier markets over the year, I’ve learned that earnings are an opinion, yet dividends are real. More importantly, dividends are what is left over after the local oligarchs have had their way with the company’s actual profits. It’s their way of sharing a bit of the wealth with their favorite friends who also own shares.

Dividends are also a way of showing the success of a business to the rest of the business community—hence they tend to stay constant or grow—rarely declining unless there’s an economic crisis. I tend to find them a useful benchmark for a company’s growth—however inaccurate the actual financials are.

Me: “So, what is the dividend yield?”

Him: “30%, but it is too low. By law, they have to pay out 25% of earnings as dividends, but we think they should pay out a higher percentage.”

Me: “Whoa!! Wait!! Your national airport is trading at less than one times cash flow and a 30% dividend yield? Your math must be wrong.”

Him: (calling in 2 official looking ladies who discuss my question for 10 minutes in Kyrgyz) “I think we might be right—maybe.”

Lady: (correcting him) “We don’t understand the question.”

Me: “Is your national airport monopoly trading at a 30% dividend yield?”

Him: “No.”

Her: “Yes.”

Him: “Maybe?”

Me: “I’m confused.”

Them: “So are we.”

Me: “Can I speak with a broker.”

Him: “Yes, we have those.”

Me: “Do any speak English?”

Him: “We have only one that speaks English—don’t worry, he runs the ‘Goldman Sachs of Kyrgystan’.”

After a 10-minute walk down a dark ally, I finally found their 200 square foot office. The elevator to the 6th floor was broken (but I needed the exercise anyway).

Global HQ of Goldman Sachs of Kyrgyzstan

Broker: “Why are you here?”

Me: (This routine again?) “I want to know about which stocks to buy.”

Broker: “Why?”

Me: “You’re kidding, aren’t you supposed to try and sell me something so you can earn commissions?”

Broker: “Maybe.”

Me: “I heard your airport monopoly is trading at a 30% dividend yield.”

Broker: “Yes, but it’s a bad investment. They only pay out 25% of dividends.”

After a quick glance at the financial statements (naturally in Kyrgyz), I realized that not only is it at less than one times cash flow, but stated cash flow and dividends are increasing at roughly 20% each year, due to continued increases in passenger traffic.

Me: “Why is this at such a cheap price?”

Broker: “Because no one tries to buy it.”

Me: How many shares traded last week?”

Broker: “About 13.”

Me: “Screw it, I’m in. I’ve certainly invested in crazier things. How long do you think it will take to buy 10,000 shares?”

Broker: “A year or maybe 3.”

Me: “Well, let’s get started, I want to open an account.”

Broker: “Wow, we haven’t had a new client in years.”

Me: “Aren’t you the biggest broker in Kyrgyzstan?”

Broker: “Yeah, we are. No one ever wants to invest.”

Kyrgyzstan is an undiscovered gem. The people are friendly, the food is great and the scenery in the countryside is amazing. Even better, it is a stable country, growing at 5% +/- a year. I guarantee you that in 10 years, there will be many more tourists landing at the airport than this year, as it’s completely undiscovered, but certainly will be. Heck, I couldn’t even spell the country’s name until last week.

The moral of the story is to never stop looking for opportunities—never stop asking ridiculous questions—never stop following up on strange leads—never let your new broker’s lack of English language skills get in the way.
Never stop looking for opportunities. Never stop asking ridiculous questions.Click To Tweet

You may actually uncover an infrastructure asset with a 30% dividend and a 20-year history of double digit dividend growth, at less than one times cash flow, at less than 20% of stated book value and 5% of replacement cost, roughly 90% owned by Kyrgyzstan’s government with a government mandate to distribute at least 25% of cash flow in order to offset the government’s budget deficit. These things really do exist, even in a world where quants are supposed to uncover these companies. The markets are never fully efficient—it just takes some vodka with friends to get there.

Now, does anyone want to cross me a block?

To be continued…

https://capitalistexploits.at/2017/10/wh...ld-you-do/

[Australia Sucks]

TailGunner that is a typical example of the sort of stuff that happens in emerging markets. No liquidity in that airport stock. It would take years just to buy $10,000 worth of shares.

[Tail Gunner]

(10-30-2017 04:07 AM)Australia Sucks Wrote:  

TailGunner that is a typical example of the sort of stuff that happens in emerging markets. No liquidity in that airport stock. It would take years just to buy $10,000 worth of shares.

Why are you asserting not only the obvious (based on a reading of the article), but also what I myself said about liquidity? "In this case, a lack of liquidity may be an issue if you ever need to sell the stock quickly, but it is certainly a good option for a long-term speculative play."

Obviously, this opportunity is long-gone. Otherwise, the author would never have written about it (but passed it along to family and friends). I provided this as merely one example of the high-yield opportunities that you can find in emerging or frontier markets using boots-on-the-ground.

You seem absolutely fixated on dissuading anyone from thinking creatively. Just because someone begins to think outside-the-box does not mean that they will immediately take action. It is just the beginning of the journey. So, why are you so hell-bent on dissuading people from taking even the first step of trying to think creatively, which might lead down what could be a long and financially lucrative road?

You suffer from serious crab mentality syndrome. Individually, crabs in a pot could easily escape, but instead they grab at each other in a useless "king of the hill" competition which prevents any of them from escaping (e.g., by analogy, from a boring existence as a wage slave) and, instead, ensures their collective demise. The analogy in human behavior is that members of a group will attempt to "pull down" (negate or diminish the importance of) any member who might achieve success beyond the others. You may wish to re-think how you can best contribute to this forum by offering creative and constructive advise, instead of constantly promoting negativity.

[Australia Sucks]

Tail Gunner I am not against anyone being creative or investing in emerging markets but I do not like the fact that you are trying to portray developing economy investments through rose tinted glasses. That is what I take issue with.

What I take issue with is your view which I could summarize as developed economy markets are overvalued, over-regulated and risky therefore every intelligent person should focus on developing economy markets. You seem to really bash developed economies. Whereas the real story is that developing economies are riskier to invest in but offer the potential for higher returns. Anyone who has even a basic understanding of market history knows the huge risks inherent in investing in developing economies. You seem to continually gloss over the risk side of the equation and keep focusing on return.

In the U.S. there are dozens of companies listed on the stock market that have increased their dividends every year for decades (e.g. dividend aristocrats index). You will be lucky to find 5 such companies in all the developing economies put together.

[Jack Of All Trades]

Developed markets are very low risk compared to developing countries and are very stable. From a investment perspective they are stable, highly regulated, but they have low yields which sucks if you want to make money. Developed markets are basically a place to park a lot of cash to allow it to sit at a few % above a country's prime interest rate.

As for someone who's very interested in developing markets, you have to bevery careful. The cards are often stacks against you as a foreigner and if you just dump cash into investments around the world just because the numbers and some semblance of laws look good, doesn't mean it can't turn against you. From what I understand about emerging economies is because there's less of a legal framework in how things are done, they turn to family connections out of neccesity to regulate business deals which is another can of worms.

If your gona pull stuff like you explained with the kyrgz situation be ready to lose that chunk of cash, if 10k isn't much to you definately do it.

[Tail Gunner]

(10-31-2017 02:53 PM)Australia Sucks Wrote:  

In the U.S. there are dozens of companies listed on the stock market that have increased their dividends every year for decades (e.g. dividend aristocrats index). You will be lucky to find 5 such companies in all the developing economies put together.

You accuse me of exaggerating by minimizing the risk of investing in emerging markets (when I have made the risks perfectly clear), but then you make this over-the-top hyperbolic comment: "You will be lucky to find 5 such companies in all the developing economies put together."

As stated in the article, in Kyrgyzstan "by law, they have to pay out 25% of earnings as dividends," which means that more than five such companies exist in Kyrgyzstan alone. You just need to go there and find them.

In the U.S., it is easy to be a "dividend aristocrat" when you borrow money -- and incur debt -- to pay a dividend. That is simply part of the financial sickness that is rampant in the Western welfare state nations.

https://www.fool.com/investing/2016/07/1...-safe.aspx

Quote:

But borrowing billions of dollars just to pay out what amounts to sham dividends is a complete waste of money… and irresponsible.

It also means that these record high stock prices are artificial, based on debt-fueled dividends and share buybacks instead of healthy free cash flow.

This is totally unsustainable.

http://www.zerohedge.com/news/2017-02-23...rat-stocks


I will take my chances in the true market-based economies where the risks are based on real economic principles, not government and corporate manipulated markets -- and where the annual yields are based on real capitalistic risk.

[Tail Gunner]

(10-31-2017 04:14 PM)Jack Of All Trades Wrote:  

If your gona pull stuff like you explained with the kyrgz situation be ready to lose that chunk of cash, if 10k isn't much to you definately do it.

Exactly. As I stated, "it is certainly a good option for a long-term speculative play." Higher risk and higher reward.

[Australia Sucks]

I live in an expensive part of Sydney (Australia) and just saw an apartment advertised for sale (for auction actually) next door to where I live. I worked out if you bought the property outright without a loan and ran it as a completely passive investment (using a property manager, outsourcing repairs and maintenance, etc) even on a low tax rate your net yield (after tax) would be less than 1%! There are still some cities in Australia where you can get decent yields on properties but not in Sydney or Melbourne! You would have to be absolutely nuts to buy a property (in today's market) in Sydney as investment (its different if you just want a house to live in). Actually with the level of interest rates in Australia you could get at least 2% (pre-tax) by parking your money in a savings account. So blue chip Sydney property gives you less yield than an Australian savings account with a local bank.

[Tail Gunner]

(11-04-2017 04:43 PM)Australia Sucks Wrote:  

I live in an expensive part of Sydney (Australia) and just saw an apartment advertised for sale (for auction actually) next door to where I live. I worked out if you bought the property outright without a loan and ran it as a completely passive investment, even on a low tax rate your net yield (after tax) would be less than 1%! There are still some cities in Australia where you can get decent yields on properties but not in Sydney or Melbourne! You would have to be absolutely nuts to buy a property (in today's market) in Sydney as investment (its different if you just want a house to live in). Actually with the level of interest rates in Australia you could get 2 or 3% (pre-tax) by parking your money in a savings account. So blue chip Sydney property gives you less yield than an Australian savings account with a local bank.

You have government-induced artificially-low interest rates to thank for that predicament. Because retirees (or future retirees) cannot live on a 1%-2% yield, hundreds of billions of dollars of investment money (perhaps trillions) that would otherwise be parked in safe, secure certificates of deposit at historical rates of 5%-8% are instead chasing yield in the equity and housing markets. That artificially drives up asset prices, which drives down yield.

Just a few days ago, President Trump appointed another dove to replace the previous dove. (Dove refers to an economic policy advisor who promotes monetary policies that involve low interest rates.) So, not much will change in the U.S. Meet the new boss. Same as the old boss.

[Australia Sucks]

Tail Gunner in Australia the stock market still gives reasonable yields because our p.e. ratios are lower than most developed markets (stock market is still below the 2007 peak in Australia) and dividend payout ratios are high here (our tax system encourages dividend payments). In Australia most blue chip companies will pay yields in the 3-5% range with tax imputation credits (franking credits) usually attached (usually the imputation credits mean a 30% tax has already been paid so if you are on a lower income tax rate you may not even pay tax on the dividends and may even get a partial refund of tax credits in your tax return).

In Australia retirees can get reasonable income from the stock market. Lets use a hypothetical example. Retiree Mr. John Smith buys $100,000 AUD of shares in in his self managed superannuation fund (similar concept to a IRA in the U.S.A.) in ABC Bluechip corporation listed on the Australian stock market (ASX). The company pays a 4% "fully franked" dividend yield (a common level of yield for Australian blue chip stocks). Mr. John Smith is in the retirement phase and therefore in his retirement account pays no tax. He receives $4000 of dividends and gets the $1714 of franking credits refunded to him (after he lodges his tax return). So his after tax income is $5714 on his $100,000 investment. If the company can increase its earnings and dividends over the long-term then all the better.

In Australia any retiree (or retired couple) with a paid off house/apartment plus $1 million AUD to invest (in the stock market) in a retirement account can live a middle class lifestyle.