Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Redefining Political Economy, Globalization & Business Models Consequent on Corona Virus Pandemics - 9th Apr 20
Plus500 Rreview - 9th Apr 20
Gold Price Closely Tracks Debt-to-GDP Ratio - 9th Apr 20
Gold, Silver and Rigged Market Socialism - 9th Apr 20
Going to School in Lockdown Britain, Dobcroft Sheffield - 9th Apr 20
Amazon Face Masks to Protect Against Covid-19 Viral Particles N95, FPP2, PM2.5, for Kids and Adults - 9th Apr 20
Is Natural Gas Price Ready For An April Rally? - 8th Apr 20
Market Predictions And The Business Implications - 8th Apr 20
When Will UK Coronavirus Crisis Imrpove - Infections and Deaths Trend Trajectory Analysis - 8th Apr 20
BBC Newsnight Focuses on Tory Leadership Whilst Boris Johnson Fights for his Life! - 8th Apr 20
The Big Short Guides us to What is Next for the Stock Market - 8th Apr 20
USD Index Sheds Light on the Upcoming Gold Move - 8th Apr 20
The Post CoronaVirus New Normal - 8th Apr 20
US Coronavirus Trend Trajectory Forecast Current State - 7th Apr 20
Boris Johnson Fighting for his Life In Intensive Care - UK Coronavirus Crisis - 7th Apr 20
Precious Metals Are About To Reset Like In 2008 – Gold Bugs, Buckle Up! - 7th Apr 20
Crude Oil's 2020 Crash: See What Helped (Some) Traders Pivot Just in Time - 7th Apr 20
Was the Fed Just Nationalized? - 7th Apr 20
Gold & Silver Mines Closed as Physical Silver Becomes “Most Undervalued Asset” - 7th Apr 20
US Coronavirus Blacktop Politics - 7th Apr 20
Coronavirus is America's "Pearl Harbour" Moment, There Will be a Reckoning With China - 6th Apr 20
Coronavirus Crisis Exposes Consequences of Fed Policy: Americans Have No Savings - 6th Apr 20
The Stock Market Is Not a Magic Money Machine - 6th Apr 20
Gold Stocks Crash, V-Bounce! - 6th Apr 20
How Can Writing Business Essay Help You In Business Analytics Skills - 6th Apr 20
PAYPAL WARNING - Your Stimulus Funds Are at Risk of Being Frozen for 6 Months! - 5th Apr 20
Stocks Hanging By the Fingernails? - 5th Apr 20
US Federal Budget Deficits: To $30 Trillion and Beyond - 5th Apr 20
The Lucrative Profitability Of A Move To Negative Interest Rates - Pandemic Edition - 5th Apr 20
Visa Denials: How to avoid it and what to do if your Visa is denied? - 5th Apr 20 - Uday Tank
WARNING PAYPAL Making a Grab for US $1200 Stimulus Payments - 4th Apr 20
US COVID-19 Death Toll Higher Than China’s Now. Will Gold Rally? - 4th Apr 20
Concerned That Asia Could Blow A Hole In Future Economic Recovery - 4th Apr 20
Bracing for Europe’s Coronavirus Contractionand Debt Crisis - 4th Apr 20
Stocks: When Grass Looks Greener on the Other Side of the ... Pond - 3rd Apr 20
How the C-Factor Could Decimate 2020 Global Gold and Silver Production - 3rd Apr 20
US Between Scylla and Charybdis Covid-19 - 3rd Apr 20
Covid19 What's Your Risk of Death Analysis by Age, Gender, Comorbidities and BMI - 3rd Apr 20
US Coronavirus Infections & Deaths Trend Trajectory - How Bad Will it Get? - 2nd Apr 20
Silver Looks Bearish Short to Medium Term - 2nd Apr 20
Mickey Fulp: 'Never Let a Good Crisis Go to Waste' - 2nd Apr 20
Stock Market Selloff Structure Explained – Fibonacci On Deck - 2nd Apr 20
COVID-19 FINANCIAL LOCKDOWN: Can PAYPAL Be Trusted to Handle US $1200 Stimulus Payments? - 2nd Apr 20
Day in the Life of Coronavirus LOCKDOWN - Sheffield, UK - 2nd Apr 20
UK Coronavirus Infections and Deaths Trend Trajectory - Deviation Against Forecast - 1st Apr 20
Huge Unemployment Is Coming. Will It Push Gold Prices Up? - 1st Apr 20
Gold Powerful 2008 Lessons That Apply Today - 1st Apr 20
US Coronavirus Infections and Deaths Projections Trend Forecast - Video - 1st Apr 20
From Global Virus Acceleration to Global Debt Explosion - 1st Apr 20
UK Supermarkets Coronavirus Panic Buying Before Lock Down - Tesco Empty Shelves - 1st Apr 20
Gold From a Failed Breakout to a Failed Breakdown - 1st Apr 20
P FOR PANDEMIC - 1st Apr 20
The Past Stock Market Week Was More Important Than You May Understand - 31st Mar 20
Coronavirus - No, You Do Not Hear the Fat Lady Warming Up - 31st Mar 20
Life, Religions, Business, Globalization & Information Technology In The Post-Corona Pandemics Age - 31st Mar 20
Three Charts Every Stock Market Trader and Investor Must See - 31st Mar 20
Coronavirus Stocks Bear Market Trend Forecast - Video - 31st Mar 20
Coronavirus Dow Stocks Bear Market Into End April 2020 Trend Forecast - 31st Mar 20
Is it better to have a loan or credit card debt when applying for a mortgage? - 31st Mar 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

How to Profit from the End of the Longest Running War in the Americas

Stock-Markets / Emerging Markets Dec 04, 2015 - 04:49 PM GMT

By: Casey_Research

Stock-Markets

By Nick Giambruno

Drug cartels. Kidnappings. Assassinations. A war for billions in cocaine profits. Leftist guerrillas looking for a piece of the action.

If you’ve seen a movie with this stuff in it, there’s a good chance it was set in Colombia.

Popular culture has depicted Colombia this way for decades. The media has pounded this image into the public’s consciousness. So it’s no surprise most people think of the country as a scary, dangerous place.


There were plenty of facts to support this image 30 years ago…but not today. Today, a violent Colombia is just a Hollywood fiction.

The real Colombia has one of the fastest growing economies in Latin America. Some remote areas are still no man’s land. But the drug wars and civil conflict that started in the 1960s and tormented much of the country have wound down. I’d feel much safer walking down a street in Medellín tonight than I would in many parts of New York City, Chicago, or Washington, D.C. Plus, unlike most Latin American countries, Colombia welcomes and respects foreign investment.

It’s clear to anyone who has been there recently that Colombia has turned a page to a better future. The country has immense charm and plenty of opportunity for investors. That was certainly my impression after visiting earlier this year.

Yet the average person still thinks it’s the 1980s. He’s still holding onto ill-founded fears, thanks to all the negative but out-of-date images in the media. These images have created gross misperceptions about Colombia. That’s not a bad thing for us. It’s an opportunity.

The perception gap about Colombia has pushed the price of most things down to bargain levels. This is a blessing to anyone who can see beyond it.

This is exactly why I visited Colombia earlier this year. I found the opportunities there so compelling that I purchased a beautiful penthouse apartment in the nicest part of Medellín. I signed the papers and closed in early September.

Colombia, and Medellín in particular, has been on my radar for many years. My old college roommate was originally from Medellín. So I’ve known what the place was really like for some time.

I’ll share more on the investment opportunities in Colombia in a bit. But first, some important background information…

Peace Brings Prosperity

In the 1960s, friction between leftist guerrillas (generally allied with drug lords), right-wing militias (in some cases dabblers in the drug trade), and the Colombian central government developed into widespread civil conflict. This is the main reason Colombia has had a “red alert” travel advisory next to its name for decades.

The leftist guerrilla armies, Fuerzas Armadas Revolucionarias de Colombia (FARC) and the much smaller Ejército de Liberación Nacional (ELN), were the most notorious source of violence. Farming families started militias to fight back against FARC and ELN. They needed protection and, for many years, they were skeptical about the central government’s ability to provide it.

At one point, the leftist guerrillas controlled nearly half the country. But over the years, FARC lost territory, membership, and military strength.

The success of the Colombian military is one reason FARC’s power has shriveled. The military has pushed FARC out of most of the country.

Another reason is that FARC lost its foreign patrons. Cuba had been one of FARC’s biggest sources of financial and military support. But with the collapse of the Soviet Union, the Cuban government lost its ability to finance mischief in Colombia, or elsewhere.

Cuba’s reconciliation with the U.S. has recently changed the geopolitical equation even more.

Add it up, and it’s no surprise FARC thinks more armed conflict is a losing bet. The remaining FARC forces have reached a tentative peace agreement with the Colombian government. They plan to finalize the agreement by March 2016.

In the coming months, I think there’s a good chance the Western Hemisphere’s longest-running conflict will come to a clean finish.

Below is a picture of Cuban president Raúl Castro bringing together Colombian President Juan Manuel Santos and FARC leader Rodrigo Londoño Echeverri, better known by the nom de guerre Timochenko.

A Contrarian Investor’s Dream

Colombia has the right mix of ingredients to make any contrarian salivate. Most people think it’s a country in crisis. In reality, that crisis is only a memory.

The world’s attachment to an outdated Hollywood stereotype of a country overrun by battling drug lords is handing us an opportunity. This stereotype, which is just beginning to fade, has kept prices of Colombian land and Colombian stocks low. And the recent strength of the U.S. dollar has pushed prices even lower.

It’s clear to me - and should be clear to anyone who has visited recently - that Colombia has turned a page to a better future. The country’s middle class is vibrant and growing. It has more than doubled in the past 13 years and now includes more than 30% of the population.

Massive, intelligently planned infrastructure projects are underway. An ambitious four-lane highway will cut through the Andes with tunnels and bridges to connect Medellín to ports on the Pacific and the Caribbean. It will also open up vast tracts of rich farmland for development.

Walk anywhere in Medellín and you will feel a dynamic energy in the air that tells you this place is on an upswing.

Put it all together, and you have a perfect crisis market…a place where the crisis is a fiction.

These opportunities won’t last forever. The word is starting to get out. But, for the time being, Colombia hasn’t hit the radar of most foreign and institutional investors. However, that could change soon, especially if the government and FARC reach a permanent peace agreement in the months ahead, as I expect they will.

How to Profit

One way to invest in Colombia is to buy stock in Colombian companies. A handful of them trade in New York, just like any other public company.

I’ve uncovered what I think is the best Colombian company to invest in right now. I think it’s an incredible bargain. This stock has a safe double-digit yield and lots of capital appreciation potential. For the full details, click here to check out Crisis Speculator.

Investing in Colombian real estate is another way to profit.

Besides the compelling investment and lifestyle aspects, there are other solid reasons to own property outside of your home country.

I often describe owning foreign real estate as an “international diversification grand slam.” It can accomplish five key goals all at once. For example, the apartment I bought in Medellín gives me the following benefits:

1. Geographically and politically diversified savings. I essentially traded overvalued paper money (U.S. dollars) for an undervalued hard asset out of the immediate reach of the U.S. government. It’s extremely unlikely that your home government could ever confiscate your foreign real estate.

(Besides Colombia, I view Argentina as very attractive right now. With the election of the pro-market Mauricio Macri, there’s a good chance Argentina is turning the corner to a brighter economic future. That, and the incredible lifestyle there, is why Argentina is at the very top of my shopping list.)

2. An easy path to residency in Colombia. Colombia, like many countries, will give real estate investors residency or a path to it. With the apartment and Colombian residency in hand, I have an emergency “bolt-hole” where I could always go if necessary.

3. Portfolio diversification. The apartment diversifies the mix of asset classes in my investment portfolio. It also gives me the option to generate foreign currency cash inflows from rental income.

4. A measure of privacy. I’ve also described foreign real estate as the “new Swiss bank account.” That’s because owning foreign real estate is one of the very few ways Americans can legally keep some of their wealth abroad while maintaining their privacy.

5. Additional crisis insurance. Given the degrading social, political, and economic trends of the U.S., I think it’s critical to take proactive measures now.

Decades of bad financial decisions and massive debt levels will cause another financial crisis sooner rather than later. Central bankers and politicians are playing with fire and inviting a currency catastrophe.

That’s a big reason why I decided to invest in foreign real estate. But that’s not the only protective measure you can take. I recommend owning physical gold and silver coins for similar reasons.

There are many other practical steps you can take to crisis proof your savings. In fact, we’ve recently released a video covering this very topic... Click here to watch it now.

 
The article was originally published at internationalman.com.
Casey Research Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules