The Cross of Lorraine

Thu, 2014/06/05 - 1:45pm | Your editor

Consultant John Llewellyn wrote an email to me. “The present experience in the Euro area is more than a little redolent of Japan: a banking crisis addressed far too slowly; a burst of expansive fiscal policy followed by retrenchment; talk of structure policy reform [with] very little concrete action; deflation looming; and a long multi-year period of slow growth that risks becoming self-sustaining.

“The US under Bernanke looks as if it may – just – have pulled off a recovery. But in Europe, where animal spirits are somewhat less buoyant (part of the national character, I guess), expansivie monetary policy has not prove[n] strong enough to overcome that plus fiscal retrenchment.”

Dr Llewellyn is a founder and partner in London-based Llewellyn Consulting,, 44-20-7213-0300.

John wrote to me before the European Central Bank cut its deposit rate to minus 0.1%, the first CB to use a negative (sub-zero) rate in the current crisis. The ECB also cut its refinancing rate by 10 basis points and its margin rate by 35 basis points, both now 0.4% to fight deflationary trends. It aims to penalize banks which place money on deposit with it rather than lending it out.

The theory of Mario Draghi, the ECB head, is to stuff banks with liquidity to force them to lend to borrowers in the real economy. He also said the ECB may act to further cut rates.


While European stocks are up on the Draghi initiative, BNP-Paribas, with an ADR traded as BNPQY on the OTCQX market barely budged.

France is more exercised over a US court planning a huge fine (on the order of $10 bn) against BNP, a giant privatized French bank, for violating sanctions in 2002-9 by laundering money for transfers to blacklisted countries (Iran, Sudan, Cuba, and others) than it is about Russia seizing Crimea. The bank was mistakenly advised by its lawyers that if its US branch was not directly involved in the transfers to outlaw states of US$s, it would not violate US laws and could escape sanctions because it wasn't breaking French or European laws. BNP also will have to stop conducting business in dollars for a time.

Bon appetit. Now Pres. Hollande over a Paris summit dinner will lobby Pres. Obama to violate the US constitutional separation of power by blocking the court actions. Obama said earlier “the [US] tradition is that the president does not meddle in prosecutions.” Bloomberg wrote today: “banks that can't pay the fine shouldn't do the crime.”

France plays its own games. It also bans genetically modified foods to protect its traditional farm industry. It doesn't allow fracking within its borders. Moreover, despite events, France is delivering two Mistral aircraft carriers to Russia under a pre-Crimea contract by Oct., one of which will patrol the Black Sea.

France has a history of being a bad ally, dating back further than De Gaulle's exit from Nato in 1966. Even during World War II, France asserted its sovereignty in petty disputes leading Winston Churchill to remark: “Every man his his cross to bear, and mine is the Cross of Lorraine”, the symbol of De Gaulle's resistance movement when France was occupied by Nazi Germany.

Friday is the 70th anniversary of the D-Day landings, when allied troops fought their way ashore in Normandy with air support limited by the overcast skies. US troops landed at Omaha and Utah beaches and Canadians at Juno beach. Although you might not know it from movies like Saving Private Ryan, troops from Britain, Poland, Norway, and the Free French also were in the invasion forces which ultimately succeeded in beating back the German Panzer tanks.

France, in a momentary break with its history of going it alone, in 1944 was a team player. Even De Gaulle knew he had no alternative.

My husband and I lived many years in Paris, and as is normal there, we would be heckled at times with calls of “Yankee go home”. My husband, actually not a Yank but a Brit, would then quietly ask in his best French if he was to take home the bodies of his uncles, one killed on the River Somme in World War I and the other killed in the retreat from Calais after the German blitzkrieg wiped out the French forces in 1940.

In business life too, France likes to go it alone. I was present at the total purge of management at French government-controlled oil company Elf Aquitaine when Mitterrand took power and wanted to get his hands on its lolly for political use. Loïc Le Floch-Pringent in 1989 was named CEO despite having no experience in the oil industry. That ELF had an American Depositary Receipt trading on Wall Street was of no account I was told at the shareholder balloting. Le Floch was later indicated for fraud in France and imprisoned in Togo in the Putaine de la République affair which also hurt other Socialist worthies.

France is not a team player under either Gaullists or Socialists.


My favorite asset manager, State Street, a US bank with shares I own, likes global investing via index exchange-traded funds. Today it launched 4 SPDR ETFs tracking indexes: SMEZ tracking Euro Stoxx small cap; QEFA tracking MSCI EAFE Quality; QEMM tracking MSCI Emerging Market Quality shares; and QWLD tracking MSCI World Quality. I am not recommending these indexed ETFs mainly because I am not sure what “quality” means in an index-tracking ETF.

In pink sheet trading, companies like BNP-Paribas on the OTCQX are considered to be “quality” stocks on a quality exchange.


More on Brazil, Spain, Canada, Britain, France, Colombia, China, Singapore, and Ireland.

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Politically Correct in Cambridge

Tue, 2014/06/03 - 1:26pm | Your editor

I have something to get off my chest, which you may want to ponder.

The Radcliffe Institute was founded 15 years ago to sop up the endowment of the former woman's college I attended before it opted to be absorbed by Harvard. This merger, while opening up more places and grants for women undergraduates, also ended a near-century focus on BA education for women. I attended a day of lectures and presentations by current and former scholars at the Radcliffe quadrangle last Friday. The new era of college political correctness has led to honorary degrees or commencement speaker slots being denied to people who had offended the current liberal-populist orthodoxy, criticized in his commencement address by honoree Michael Bloomberg, the former NYC mayor, the day before. But even worse occurred at Radcliffe Day.

I was deeply offended when the introductory first speaker, who heads the Radcliffe Institute nattered on about the long history of the exchange of ideas by citing medieval “scholars sitting under the palm-trees in Timbuktu”, before segueing on to call the Radcliffe Institute “the Mecca and Medina of ideas.”

The speaker, Lizbet Cohen, by the way, was neither African-American nor Muslim, but female like the majority of the audience, and the majority of Radcliffe donors. I nearly walked out, and to his credit, my husband, one of the few male attendants, agreed.

If you are as unaware of it as she was, Islamic theology teaches that women have only half the soul that men do. This justifies hampering female education and liberation in many traditional Muslim countries.

Moreover, unlike other mainstream monotheistic religions, Islam doesn't allow theology and practices to be easily undated or liberalized. Mohammed was the culminating prophet, and there can be no other. That is a problem for the Muslim men and women faithful, and not me, to deal with.

But to refer to the brilliant Islamic scholastic past at a women's academic institute without recalling the misogyny which accompanied it is a proof, not just of the temptation to rewrite history, but also of contempt for the intelligence of the audience.

I will hereby cease donating to Radcliffe, having cut off Harvard during the reign of Larry Summers. I will hitherto donate only to The Bronx High School of Science.


More from around the world follows for paid subscribers including a new stock pick. Join them or test drive the full package to see what you and your portfolio are missing. To stop piggy-backers, we are not updating our ticker symbol list for this issue until later in the week, after which those who have paid will have been able to do the trades recommended. Note that there will be no blog Weds., the Jewish Pentecost holiday.

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21st Century Customer Service

Mon, 2014/06/02 - 1:29pm | Your editor


The start of a new month brings new horrors to the victims of 21st century customer service. Here are some examples from less than 4 hours after the start of the first workday of the month:

  1. 8 am phone call to my emergency number from Dun & Bradstreet in the Philippines to go over the changes they are (at last) making to my mis-stated corporate listing;

  2. bill from a radiology clinic for the last mammogram I had which said my insurer denied coverage and demanded over $500 for the procedure. It had been scheduled after the radiology clinic told me it was time for the an exam, and after my doctor sent them the forms to proceed with a test that is supposed to be free from women my age;

  3. calling the toll-free number from the radiology clinic's billing service offered linguistic options but no way to contest the bill;

  4. two of those mystery meat messages from e-trade to tell me shares I own are “in play” with no way to get further information either via the message or by logging into my account;

  5. calling the broker's toll-free number, after the smarmy welcoming message, I heard news that their (haha) “Platinum Service” was down. Trying to send an email message to the brokerage produced a blockage for “invalid characters” of which there were none.


A 2nd Spanish company has signed up to escape the clutches of Gazprom. Iberdrola SA will buy $5.6 bn of natural gas from Cheniere Energy of the US. The operator of Israel's Tamar offshore gasfield, Noble Energy, will sell natural gas to Union Fenosa, a Spanish company seeking safer and cheaper gas supplies.


More for paid subscribers about the in-play stock and other matters follows from The Netherlands, Finland, Ireland, Pakistan, Australia, Switzerland, Britain, Colombia, South Korea, Israel, Hong Kong, and Canada. There will be no blog Weds which is a Jewish holiday.

We had technical issues posting the performance tables from Boston over the weekend but they are now up on the website. View the ones you are allowed to see.

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Abkhazia, Sochi, Ukraine

Thu, 2014/05/29 - 9:40am | Your editor

Today many markets in Europe are closed for Assumption, notably Germany and Switzerland, and naturally there will be no trading tomorrow so people can have a long weekend. However, in Berlin tomorrow, the fraught negotiations between Ukraine and Russia over the price of Gazprom gas deliveries past and future are due to conclude. Russia wants $485 per 1000 cubic meters, up from the old price of $268.50 which included offsets for use of ports in the Crimea, which Russia has now seized. The final deal is impossible to predict now and if it not reached there will be an appeal for international arbitration in a Swedish court.

The good thing about the current crisis is that it is summer so nobody will freeze for want of gas; and that it is stiffening the backbone of Euroland buyers who now depend on Russia for more than a third of their fuel. Reversing pipelines to feed Ukraine, and building facilities for liquefied natural gas in the Balkans are among the measures for energy security the Europeans are now supporting.

Meanwhile an uprising in a Russian-controlled part of former Georgia, Abkhazia, shows that just grabbing territory is not necessarily a way to increase Russian power. The disputed territory Russia snatched, which declared “independence” in 2008, is between Georgia and the Russian Olympic site of Sochi, on the Black Sea. It is just a short sail to the Crimea. (We were booked on a Black Sea cruise this summer which was to hit many of these places; it was canceled.)

More on Britain, Spain, Brazil, Ireland, Denmark, Mongolia, Canada, Australia, Jordan, Israel, Thailand, Pakistan, and Singapore today.

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Problems Tracking, Trading, and Correcting

Wed, 2014/05/28 - 12:54pm | Your editor


Your editor wanted to claim a triumph, but it is hard to get excited about forcing the recognition of facts on a fellow-company in the information business. Over the past 2 years my company has been receiving notifications from Dun & Bradstreet regarding a California outfit called Global Media Group whose credit paperwork, D&B claimed, was incomplete. I periodically would call the US business rating group and tell them that our firm has no link with GMG. We had a different taxpayer ID and a different state of incorporation and, indeed, a different D&B number. It never worked.

Meanwhile my company's rating was lowered showing we are at risk over the next year of not paying our bills or going bankrupt. Moreover, the D&B entry said that Agorot Ltd d/b/a/ Global Investing was in the stockbroking business, which is untrue, and which we kept trying to correct.

Finally fed up with this state of affairs, I demanded the right to correct my company entry. This resulted in yet another farce, because our CPA (who does our accounts and taxes) works in Long Island's Massapequa. Inputting this into our file resulted in D&B saying I had used a dirty word. (I could not make up these magic realism episodes if I were writing a novel.)

In disgust I had my lawyer draft a firm letter to the rating agency, at $150 for his time. And I pursued the matter with a series of clerks who actually run the site in the Philippines and Mexico and India, to judge from those whose accents I could guess. I was asked to tell if I knew anything about another company at our accommodation address (the local Mailboxes Etc.) as the Filipina supervisor's price for sending my company an apology for the ruin of my business rep.

Despite my knowing nothing about the other mailbox, I was promised that my corporate entry would be fixed. I am a believer in globalization but my own theory about D&B is that its data entry personnel are ignorant, ill-trained, and badly-managed. Another great name bites the dust.

Another triumph: I managed to unsubscribe from Facebook, which will take 14 business days for some reason. I am fed up with daily boring news from my daughter-in-law's publicity-mad 16-year-old cousin Justine and others of that ilk and age bracket.

More for paid subscribers starting with horrible and good news for our pharma shares in Israel and Britain, some notes about Canada companies, a high risk buy, and an update on Pakistan, plus some other news from Denmark. And plenty about the problems of tracking and trading stocks.

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Economeritricians and Austerity

Tue, 2014/05/27 - 12:43pm | Your editor


The rollcall of economeritricians, users of flawed data to make their theories more compelling, now added Thomas Piketty to its hall of infamy. The best-seller egalitarian French economist wrote Capital in the 21st Century, an exercise in neo-semi-hemi-Marxist theory. Mr. Piketty argued that the wealthiest 1% increased its share of wealth around the globe in the past couple of decades to levels not seen since the late 19th century

This is comparable to what happened to the spreadsheets in This Time It's Different, by Carmen M. Reinhart and Kenneth Rogoff, the Harvard economists who called for cutting public debt and adding austerity in the global economic crisis regardless of the pain it caused. They argued, with poor statistics, that “countries with debt over 90% of GDP tend to have slower growth than countries with debt below 90% of GDP.”

The whistle-blower against Piketty was Lord King, former governor of the Bank of England, in a book review. You have to be a meticulous reviewer to look at the tables at the back of the book. Lord King's finds were investigated and amplified by The Financial Times. The pink paper (in color, not politics) discovered Piketty's tables were full of unexplained and inconsistent data-source switches to make his case. The French rock-star leftist also weighted different-sized countries equally placing Sweden on a par with France or Britain.

Piketty was particularly prone to under-count and obfuscate US data showing that inequality was not rising, not too surprising given that this country is a center of the very capitalism Mr. Piketty rejects. Any evidence of a decline in the share of national income held by the super-wealthy was cast aside in favor of statistics supporting his case.


It looks like Lithuania and Poland got Russia to agree to let Europe get the supplies Gazprom ships via Ukraine. Lithuania bought a floating liquefied natural gas terminal from South Korea, the “Independence”, which is now sailing to the Baltic to reduce its 100% dependence on Russian gas. Until the US starts LNG exports, the new gas will come from the spot market and Norway.

Poland's Donald Tusk heads a summit planned for June which will create an integrated LNG market for the European Union which would be the opposite-number for Russia in buying for the entire EU and also build LNG storage facilities.

Russia upped its price to Ukraine for gas to $485/thousand cubic meters (cu m) from $286 cu m because Ukraine no longer can offer Russia Crimean port facilities for which its gas price was reduced. That is adding insult to injury. However, after the election and the crackdown on separatists, Ukrainian Naftogaz and Russian Gazprom companies are now expected to sign a deal with the help of EU and US intermediaries who will help Ukraine pay its $2 bn bill.

Meanwhile Gazprom as bought Bulgaria to its side by awarding it a contract to build part of the South Stream pipeline which avoids Ukrainian territory. The contact was awarded by Stroitransgaz, a Russian firm part of whose ownership is unknown, possibly a target of US sanctions.


Elections and inaugurations around the world produced some good surprises: India and Ukraine. And there were bad surprises: the anti-European right took far too many votes for my taste in the Euro-parliament elections including one reader, AH, who boasted of his vote; the pro-FARC-negotiation Colombian candidate was forced into a run-off; and King Bhumibol Adulyadej backed the Thai military coup.


For this child of refugees from Hitler's Germany, there were a few nasty memorials. Radical right candidates in France, Czech Republic, Greece, and Hungary had anti-Semitic planks in their platforms this time or in the past. Turkish Prime Minister Recep Tayyip Edogan blamed Jews and “the spawn of Israel” for the coal mining disaster because Turks criticized his government's initial reaction (Erdogan said mines are dangerous and then a government minister slapped a protesting miner.)


The Sablons Holocaust Museum in Brussels was the latest site of murders at Jewish institutions, as what occurred in Washington DC, Toulouse (France), and Kansas City. It is possible that disgust with austerity has fostered the new vogue for anti-semitism. I hope not since budget cutting zeal is based on flawed statistics.


More for paid subscribers follows including a nice quarterly report and news from Brazil, Canada, Singapore, Guinea, Britain, Israel, Thailand, Mexico, Mongolia, Australia, and (first time) Nicaragua. There will be no blog on Friday as I am attending an alumnae function in Cambridge Mass. Before spending the weekend with family in the Boston area. There also will be no blog on June 4 which is Shevuot (Whitsun, Pfingsten, or Pentecost according to the Jewish calendar.)

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Portfolio Tables Posted

Mon, 2014/05/26 - 11:53am | Your editor

The performance tables have just been posted on the website. Rush to view them now ignoring the lovely weather (at last) and the holiday in the USA (Memorial Day) and Britain (May Bank Holiday).

Just a note to warn readers that there are bad people around: a Texas reader, whom I know is seriously wealthy, not all hat and no cattle, sent me a note asking for money so a relative could have a bone marrow transplant in The Philippines. I was to send $2500 to an address on Park Avenue here in NYC, a sum my Texan reader would have no problems raising. The check was to go to a building where there are a dozen vacant apartments (I checked); presumably someone on the staff would steal the checks. So I phoned and found out the Texan's yahoo email account had been hacked. This kind of identity theft threatens us all. 

Have a nice Memorial Day and change those passwords now!

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Ruskaya Dusha

Fri, 2014/05/23 - 1:15pm | Your editor

In reply to readers keen on an audacious move into Russia, I do not have a Ruskaya Dusha. There are good reasons not to buy into Gazprom over its deal with China to develop new gasfields in eastern Siberia. Gazprom OAO ADRs which trade here as OGZPY sound like a great buy: the stock yields 4% and trades at a luscious looking trailing price-earnings ratio of 3x. The company is obscenely profitable, with an 83% reported gross margin and a 22%+ net profit margin. It sales are growing 10% a year.

What's not to like about this huge gas producer whose total market capitalization is less than $100 bn, less than a quarter the valuation of Exxon Mobil which produces less energy at higher costs and yields a third less in dividends ? XON's p/e ratio is 13.6. Read more »

Ariel Sharon Investing

Thu, 2014/05/22 - 12:21pm | Your editor

A political party which occupies the right wing can engage in deals with its supposed enemies more easily than one from the center. That is the lesson of Nixon in China and Ariel Sharon in Gaza. (I misspelled his name in yesterday's blog but you know whom I meant.) Now it is Narendra Modi's turn. But before we hit the subcontinent let us glance at China.

Fitch and other raters think the China Natl Petroleum Corp $400 bn deal is good for OGZPY long term but it could hurt the Russian gas exporter's rating short term as it has to borrow money to develop the new fields. Russian companies may have difficulty raising money on international markets after the Ukraine dispute scuttled plans to borrow. Gazprom may also have to cut the dividend which last year exceeded its post-capex cash flow. The impact may also hurt lower-rated Russian sovereign debt after Putin agreed to remove the mineral extraction tax which would otherwise apply to the fields producing for China. Gazprom plans to list in Singapore thanks to its new Asian visibility and may raise capital with this.

China also produced a better (if still negative) purchasing managers index today.  We have ways to play this.

As promised yesterday, today we give you advice on buying into Pakistan, whose PM will probably be the first to attend an Indian inauguration, a major gesture from the BJP victor in Indian elections. Given Pakistani risks I'm reluctant to hop into any single US trader GDR from the Lahore stock exchange, and want a fund. There are, as I wrote for paid subscribers yesterday, 8 seasoned Global Depositary Receipt stocks US retail investors may legally buy. I think you should spread your risks.

My classmate Thalassa Ali, now a novelist, has given up being a broker and remarks that there are signs of prosperity in the country where she lived for decades: “terrible traffic due to everyone having a car or a motorcycle, and movie theaters jammed with customers.” And she is somewhat optimistic about Modi who “doesn't have to form a coalition government,” adding: “I am keeping my fingers crossed.” However she gave no stock advice.

Today there are no US-registered funds investing solely in Pakistan. Former closed-end Pakistan Fund gave investors their money back. There are funds out of Sweden and Switzerland, run by enthusiasts who have little reputation to lose, Tundra Fondes and Swiss Asia Frontier Capital Fund. They are too wild and unregulated for my taste.

And as I noted yesterday, many of our subscribers may have own a frontier emerging markets open-end fund, the successor of a closed-end fund we recommended before it converted. We don't cover open-end mutual funds, particularly not this one, Morgan Stanley Institutional Frontier Emerging Markets Fund, MFMIX, with a minimum initial investment level of $5 mn. In case you are not aware of my limits, I could not buy this fund today. But I do own about 1000 shares (with dividends reinvested) worth about $17,500. Pakistan is the fund's 4th largest placement, after Kuwait, Dubai, and Qatar, but it is now nearly 10% invested in Pakistan, mainly because Lahore is up so sharply.

And that is before Nahendra Modi invited Pakistani Premier Nawaz Sharif to his inauguration, the first time since 1947 that this gesture was attempted.

The former Indian Prime Minister, Manmohan Singh and the deposed Pakistani self-appointed dictator-president, Gen. Pervez Musharraf, were both born across the Indo-Pakistan border of 1947, Musharraf in Delhi and Singh in Gah, in the Punjab near Islamabad. While the details are fuzzy, Musharraf and PM Sharif came to blows over a failed surprise attack on India in northern Kashmir, leading to Sharif's ouster and Musharraf's coup in 2001.

Between the two countries, the Radcliffe Line is fought over now mainly by high-strutting high-kicking border guards competing in a ridiculous nightly can-can dance, except in an icy glacier where neither country has much zest for battle and in Kashmir. But the bitterness remains. Pakistan's ISI (Inter Services Intelligence) is powerful and often behind attacks on both India and western troops in Afghanistan. The ISI probably protected Osama bin Laden in his hideaway in their key HQ city of Abbottabad near Islamabad, the capital. The army, while currently confined to barracks, has a history of coups and interference too. While the army is formally against the Afghan Taliban, the ISI probably helps it and also likely had a role in the terrorist attack on Mumbai 5 ½ years ago which murdered not just Hindus, but also any Jews the bombers could find at Nariman House including several rabbis and the resident Lubovicher rabbi's pregnant wife, plus Western hotel, restaurant, and cafe guests and their Indian staffers, taxi drivers, cops, and innocent by-standers. In the end 257 people were killed and over 700 wounded.

Apart from militarism and corruption, which are endemic, Pakistan also suffers from an oligarchic financial and business system. The Sharif, Bhutto, Gilani, and Imran Khan families rule over near-feudal rural fiefdoms and occasionally run Pakistan. Indian oligarchs are in business rather than agriculture and tend to stay out of politics.

Pakistani growth is well below that of India at under 4% forecast for this year. It suffers from murderous tribalism both in its northwest frontier region near Afghanistan and in feuds between Karachi and Lahore, and among speakers of Urdu (a variant of Hindi written with Islamic characters), Sindhi, and Punjabi. Ironically enough in its linguistic wars, minority speakers of the Pakistani language called Kashmiri are forced to learn Urdu.

Pakistan lacks India's flourishing service sector. While Pakistani wheat is in great demand because of problems in Ukraine, its cotton crop is being devastated by competing synthetics for clothing including one from one of our companies.


If you are willing to invest in such a country, here is a quirky way from respected Deutsche Bank management. More follows about this option for paid subscribers only along with notes about our companies from Hong Kong, Canada, Mexico, Venezuela, Austria, The Netherlands, Israel, and Japan.

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Nixon In China Revisited

Wed, 2014/05/21 - 1:02pm | Your editor

No, I will not comment on Prince Charles's comparing Putin to Hitler. There are arguments pro and con but since I am not a subject of the Royal Family, I don't have to pick a side. A US shares I owned was subjected to Chinese internet espionage, Alcoa.

Gazprom got lucky. First the EU wrote a letter to Putin asking him not to cut gas supplies running through Ukraine after Kiev turned down OGZPY demand to be paid $3.5 bn for gas in advance. That was good for Russian morale.

Then Beijing and Moscow—by leaving out the key matter of price per cu m, which CEO Alexei Miller called “a commercial secret”—finally managed to hammer out a 30-yr $400 bn supply contract over new Siberian gas for China. Experts think Russia is settling for a lower price than it charges western Europe and moreover, to get the deal, it agreed to let China National Petroleum Corp join Gazprom in developing fields nearer to China than the ones supplying Europe.

The new accord almost certainly does not link the gas price charged China to the price of oil. That link which hits European importers of Siberian gas, is subject of a potential European anti-trust case against Gazprom, which predates the Ukraine events.


Today I gloat that yesterday's note about how to play India (for paid subscribers) forecast that Narendra Modi might pull a Nixon-in-China or an Ariel Sharon on the PLO. Today Indian invited Pakistan's leader Nawaz Sharif to Modi's May 26 inauguration, a first such invitation since Partition. It is easier for those known to be firmly against another country to make peaceful gestures.

I wrote, for paid subscribers only: 

"A quirky alternative is to buy Pakistan. As the leader of the Hindu sectarian BJP party, Modi could pull a Nixon in China or an Ariel Sharon out of his sola topee... There is no longer a Pakistan Fund which I used to own in honor of my fellow Radcliffe graduate, the late Benazir (Pinky) Bhutto. Pakistan has been boosted because of its good performance to 8.9% of the MSCI Frontier index, double where it was a year ago. We own this through an open-end fund (converted from closed and therefore dropped from the model portfolio), Morgan Stanley Institutional Frontier Markets Fund, MPMIX, which weights Pakistan at 9.3% (no. 4 after 3 Gulf countries.) Whose who didn't buy it with me now have to put up $5 mn to buy in."

Investing in stocks for the long-term is the best tactic for boosting your wealth, according to academic studies. The 2nd best investment turns out to be—not bonds, not stamps, not paintings, not antiques, not real estate, not gold—but “Premier Cru” Bordeaux red wines. A team of researches from Britain's Cambridge, France's HEC, and Vanderbilt U of Nashville found that fine wine appreciated 4.1% in the period 1900 to 2012, beaten only by UK equities. They studied data about over 36,000 sales transactions for 5 wines: Haut-Brion, Lafite-Rothschild, Latour, Margaux, and Mouton-Rothschild. The transactions were sales by London wine-merchants Berry Bros & Rudd and auction prices at Christie's.

I could not invest this way: if I get a great bottle of wine I am tempted to taste and drink it. So I will not be able to sell it at auction.


More for paid subscribers from Israel, Australia, Mexico, Brazil, Finland, Chile, Ireland, Colombia, Canada, Myanmar, and Ireland. And Cuba. 

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