A Nigerian prince approaches you about a lucrative financial opportunity...or investing in Africa.

Members present: Brian, Bickford, and Danak

We started talking about EWZ, which has been the bane of our portfolio for some time now. Is it time to get out? If not now, when, and why?

Next, we decided it was high time to compare some potential investments in Africa. The table below outlines some of the pros, cons, and mysteries of a few prominent Africa ETFs. Most of the information from this was gathered from Morningstar as well as the holdings pages from the various funds themselves.

Fund	Pros	Cons	Good/Bad?
EZA	·      Mostly Africa ·      Heavy consumer discretionary ·      Good expense ratio	·      Heavy in financials ·      Low diversification of holdings
GAF	·      See above	·      Only slightly more diversified than EZA
AFK	·      Good expense ratio ·      Good diversification in both holdings and countries	·      47% financials ·      13% energy
NAFAX	·      17% Industrials ·      14% Consumer Cyclical (These are sectors we don’t have a lot of)	·      Heavy in financials (23%) ·      High expense ratio (2.5%)	10% of the fund is Nigerian Treasury Bonds.
WAFMX	·      Good diversification in holdings ·      50% Consumer Defensive (staples) ·      20% Consumer Cyclical	·      High expense ratio (2.25%)
CAFRX		·      Really strange, with lots of moving parts. See next column	·      Two different indexes in its top holdings. (EZA as 18%, AFK as 14%)
EGPT	·      Diversified well by company ·      Not super-heavy in Communications (17%) and Financials (15%)	·      Egypt may be a volatile state to invest in	·      58% of the fund is small companies
MES		·      46% Financials
GULF		·      High in Financials and Communications

Looking at this, there are reasons to not invest in all of these. However, we didn't do this sort of pro/con analysis for our previous investments. NORW was 50% Energy, but we ended up using to balance our portfolio. Right now, we want to avoid going too heavy in Telecom.

For next week:

• Do we try to balance our portfolio, or do we try to get into Africa? 
• It might be nice if our portfolio was eventually less than 20% in anything. 

Profit!

Honeymarket Don't Even Care!

Members present: Brian, Bickford, Danak...set for global domination. 

Sequester? What sequester?

Last week the gang decided that it was important to make sure that our portfolio is staying diverse. We will become a little heavier in Telecom and Energy with the Norway buy. The next step is to seek out something different.

We looked at gold because we don't have any exposure to commodities, but it had a slight drop in 2009 and it was really cheap in 2005. However, it is up up up, and it doesn't seem like the right time to get in on this. Next, we decided to look into Africa in our quest to have a foothold on the entire Risk map.

In this article about some Africa ETFs there is a case made for investing in the continent while avoiding mining and oil. This might be a nice jumping-off point for some potential investments. We'd like to take a look at the makeup of some of the ETFs on the list.

EZA (South Africa index)
NAFAX (Nile Pan-Africa Fund)
WAFMX (Wasatch Frontier Emerging Small Countries Fund)

Next week we should do that

Profit!

Norway: fit for some kings!

Norway has a king.  We love kings.  Let's buy some NORW!

Well, let's at least research some NORW.  The fund has fluctuated between $12 and $17 since its inception.  The last dividend was $0.42 back in December of 2012.  Since the price was around $12 then, that's not too bad.  The breakdown of NORW has 50% in the energy sector.  This will throw the sector breakdown of our portfolio a bit out of whack.

While revisiting our spreadsheet breakdown of portfolio weighting, we noticed that EWZ greatly shifted its portfolio around and now is much more focused on consumer staples than energy.  Also, we're now including T in our calculations.  Taking price into account, EWZ has also dropped in terms of the percentage of our portfolio.  Since SPY, ENZL, and T are all up, they are pushing their weight around even more.  We included NORW to see its impact.  It looks like we're very heavy in telecom (T and ENZL) and energy.

For the next buy, we're going to look into consumer staples for something with defensive potential.  We'll also need to try to get the portfolio back into balance.

Profit!

The Rent's Too Damn High!

Brian, Bickford, Danak, and a rather lewd strawberry from Plant City. 

One of our members is facing a $30 increase in his rent due to unspecified increased expenses. Since there haven't been any renovations to the building, we weren't sure what those added expenses might be. Taking a look at the property appraisal* online, we noticed there was actually a slight decline in the property taxes for the building. He is going to use this information to try and negotiate the rent increase.

                           *There are two different assessed valued for a property. One of which is an    

                            appraisal that you pay for to determine the value of a home that you are going to 

                           sell. The other is performed by the county, to arrive at a tax-rate. There are  

                           potential limites as to how much that value can increase if the property is being used 

                           as a homestead. This shields you from having dramatically increased payments on 

                           the property you live in. 

In the case of the building in question, the property taxes for this building have probably lowered the total tax bill by between $500 and $1000 a year. This means that those "increased expenses" may have do with a situation outside the property, like renovations on another property, or gambling debts, or perhaps an out-of-control Faberge egg habit. 

On a more serious note, the landlord may be trying to recoup losses in equity (from a loss in the value of the property) by raising rents. 

It is unlikely that our member will be able to negotiate this down too much, however he might be able to take a look at what rents in the area have been doing. If they have been declining or staying the same, this may be some sort of leverage. Ultimately, this may be a futile exercise, but it may be useful practice in the art of bargaining and self-advocacy. 

Next week we really need to take a look at a buy. What's up with Norway? Oh, and the Sequestration, and stuff. 

Profit!

Euro Momma Jokes

Members present: Brian, Bickford, Danak

So Europe is going to have a banking, and the market approves. Even our crummy Brazil ETF (EWZ) was up a little. A banking union for the Eurozone means that there is some more guaranteed stability.

Here's a the Planet Money article that gives some more deets.

Even EWZ is up a little, about 2.5%

SPY: The market is liking this banking union thing.

Telecommited to profit!

Of course it is still time for us to make a stock purchase. There are currently three contenders: NORW, ENZL, and HILO. 

Here's the sector breakdown for each (remember, we have a small portfolio, and we are trying to diversify):

As you can see NORW is the most energy-heavy of the lot, but that might not be a problem because Norway seems to have a good reputation for keeping things sane. If anyone can handle a giant national endowment of Texas Tea, is the Vikings. Plus, remember the movie at the Norway kiosk at EPCOT? If  you can sit through that snoozer, you know they have no taste or irrational exuberance.

And here's a breakdown of the sectors and what each would do to our total portfolio:



With each of these, we would stay pretty well-diversified. However, if we do go with NORW it might be good to avoid energy in the future. Really though, it is probably necessary to sit on this and take a look at this chart in more depth next week.

We could also look at these as our next three buys, and just choose which makes sense next. This would give us a short list of investments, which will always be ready for the next buy. We tend to work in cycles of about six months, but we don't buy as often because it is always so hard to commit to something specific. The idea is that we will add to the list and be prepared for upcoming buys waiting only on the funds to roll in. 

Oh the things you can do with screen capture.

Profit!

Heeeeeey, it's a party with the DMA!

We're dancing around the 200 DMA.  Should we do something?

We're sucking... we're sucking.  The 50 crossed below the 200.  It's just getting worse.

AT&T may be a defensive move for other market players.  If that is the case, it'll act as a hedge against a dropping SPY.  Let's just ignore what is happening with Brazil.

Norway is fairly stable when you look at the dollar range that we're moving between. 

New Zealand seems to be a pretty steady hold as well. 

No real meeting today due to technical issues and video games.  We'll try for more next week.

Old Folks at Home

Members present: Brian, Bickford, Danak

A lackluster jobs report combined with the market being down for the year as of this month--ick.


We are the .01% of the 99%?

While hearing a group conversation about the 99% vs. the 1%, one of us wondered what these folks who are presumably locked into being part of the 99% were so vitriolic toward any sort of protest movement. They will never be billionaires, so it would be instructive to understand the psychology behind their resent. Perhaps it is the idea that they could become fabulously-well-to-do is the driving force, and perhaps it is the picture of patchouli-stinking, hippie campers, who contributer nothing nothing but jam band music and olfactory terrorism to the public discourse. Is it dreamy avarice or steamy resent?

Old Folks at Home

The market is currently flooded with investors that are going to retire at some point in the near future. They will need social security, but they will be leaving jobs. Perhaps this is going to be a good thing for the market, since all the jobs they left will need new people to gripe about them (whilst doing them), which might solve the social security problem, perhaps. This assumes that as people retire, they will be replaced by new people and not just phased out. Anecdotally, we all have heard about jobs being eliminated and increasing the burden of productivity on the remaining workforce. The next person who tells me to work smarter, not harder is getting a wet willie.

Additionally, there are a lot of people who have 401Ks as opposed to pensions. This means that the amount of retirement someone will receive depends on the whims of the market. Currently, with a Sherman's march to the sea-like decline in the markets, it is not a great time to retire if your revenue for the rest of your life is predicated on what kind of music they play during the market wrap up.

On the plus side for the markets, there will be people leaving the market as they cash in their retirements. This might decrease the volatility, since there will be less people with their fingers on the panic button.

Charts

EWZ: Check please?

When SPY was sucking, we held with it, and then it came back. It might be a good thing to hold on to EWZ while we're down--we missed our chance to sell, and the best thing is to wait and see. If we sold it, we could either hold cash and wait for it to drop more, or we could sell out of it and buy something else, but then what? Also, we should consider that EWZ is a country fund for Brazil, so it makes sense that it will come back. 

SPY

AT&T: Looking good. 

Norway

Fascinating reading here (Wikipedia), but here's the skinny: they are not part of the EU, they spend their oil profits with an eye toward the future, and did I mention that they are not part of the EU?--or OPEC, for that matter.

Here's a chart of their exports from Wikipedia:

Here's another take on Norway, but things still look pretty rosy. 

We will have to continue to look at it.

Next week, no Bickford, so Brian and Danak will take a look at Norway NORW.


Profit!

NZ, CPI...ABC, BVD?

Members present: Brian, Yousef

ENZL: Today's main event, is New Zealand worth investing in?

Brian found a nifty journal of economic events for ENZL from Seeking Aplha. The information is a little overwhelming but it paints a picture about events in the country and the region, and the effect they have on the ENZL fund.

As a side note, this led to a discussion on the consumer price index (CPI). Basically, it is an index of what things cost consumers over time. A large rise in CPI during a short period means inflation and a large drop in a short period means deflation. Check this video out for a fancier explanation.

But then again, where does one start researching, and what might make the decision?

By the way New Zealand has a relatively low debt-to-GDP ratio (hanging around 33%, according to this).

Then there's this article (also from Seeking Alpha), which says some interesting things about how NZ is looking good. But then you look at the comments and it's like trying to buy a vacuum on amazon all over again.


Random charts:

Ick, Brazil, Ick. 

SPY. Okay. 

American Telegraph & Dividend Company

Next week, we take a look at Norway and its fisheries.

Profit!