Weekly update

I’m taking a quick break in Miami to see friends and family before heading down south again to dive head first into a large, complicated, and very exciting business dealing… so next week I will be writing to you from Panama once again.

While I am in Panama I plan on putting the finishing touches on the Black Paper that I have mentioned before– this will be a “who’s who” list of banks, brokers, lawyers, agents, developers, etc. that I trust and have done business with in the past, as well as names of crooks who are dishonest in their dealings.

I’m working on this as fast as I can and will let you know when I have it ready to go. I plan on a limited release and may do a pre-reservation, so let me know if you’re interested.

I’ve had a great conversations with Christine Verone this morning (my China insider that you heard from on Wednesday).  The response for her boots on the ground insights was quite strong, so I’ve asked her to write another essay next week describing her take on Asia markets.

Given Christine’s phenomenal investing track record, I think you’ll find it quite insightful.

She also wanted me to emphasize that she is not a blind, overzealous China bull. You see these guys on TV frequently touting China’s uninterrupted economic ascent based on unverifiable ‘official’ government numbers. Most of them have never set foot on the continent.

Despite its promise, China certainly has major problems to deal with– pollution, water shortage, income gap, ethnic tension, intellectual property rights, Kim Jong-Il, too many dollars, and oh yeah, that totalitarian government.

It takes a real understanding of the region to be able to navigate these challenges and recognize the key triggers for investment success; that’s the benefit of having boots on the ground. More to follow.

Lastly for this week, I want to clarify a passage from Monday’s letter about Poland in which I questioned, “how could the Poles be complacent enough to not make preparations for the coming crisis?”

It was 1939. Hitler had already invaded Austria and Czechoslovakia and made no secret of targeting Poland next. With Nazi and Polish forces massed at the border preparing for combat, residents of Krakow were enjoying carefree summer days on the banks of the Vistula River.

Polish military commander Edward Rydz-Śmigły attended an open-air mass in the city, proclaiming of Hitler at the end of the sermon “If anyone thinks we love our Fatherland any less than he loves his Fatherland, then he’s in for a surprise.”

It was as if the German invasion was a foregone conclusion… and yet the citizens remained confident in their government and turned their attention to more pressing matters… like staying cool in the August heat.

And so I wonder… how could such complacency possibly be achieved? At what temperature does the boiling frog finally jump out of the pot?

My guess is that the locals who found themselves staring down the wrong end of a German Karabiner 98 Kurz bolt action rifle a few months later probably wished that they had taken precautions well in advance by devising their own lifeboat strategy.

I’ve said before– I’m actually quite an optimistic person… grounded in realism, but optimistic. I do not spread unnecessary doom and gloom and believe that the headline “all the planes landed safely today” would be just fine.

That being said, given the level of risk we see around us on a daily basis, it seems like sheer lunacy to not begin taking basic precautions– protecting the family; staying healthy; finding alternate ways of generating income; safeguarding assets; maintaining purchasing power of savings; increasing personal privacy.

These are the critical topics of this letter that I try to stick to on a daily basis.  I’ve mentioned in the past that, in my opinion, the single best quick start book for anyone looking for initial answers is Mark Nestmann’s Lifeboat Strategy.

Once you have a firm grounding, I invite any and all questions to this forum and shall do my best to give you actionable solutions.

Tagged as: China, Poland