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SOVEREIGN MAN

This country can make you rich

I’ll admit, even I was surprised.

When I think about Asia growth and investment opportunities, places like Singapore, Thailand, Vietnam, and even the Philippines come to mind.  But lately, in my regular discussions with key Asia contacts– brokers, sovereign wealth fund analysts, etc., one place keeps coming up again and again.

Mongolia.

Mongolia is one of the largest, most resource rich countries in the world with a population smaller than Panama– that’s a lower population density than Wyoming.  And with such a low population to support with its abundant resources, the country has the good fortune of being sandwiched in between resource-hungry China and Russia.

Many of my friends and colleagues who are based in Asia make routine trips to Mongolia and describe it as the Wild West– young, fast-paced, and full of opportunities with neither the benefits nor restrictions of established structure.

My old friend Christine Verone, who has an uncanny 6th sense about Asian markets, recently sent me this in an email:

———–

I’m not buying in China right now because I’m not seeing the right indications from the government yet. I will let you know when things change and we can start making money in Shanghai again. In the meantime I am buying in Mongolia as fast as possible.

The stock exchange there is among the smallest in the world; it had a 68% run-up but has since rebalanced to 50% below that level, and there are some fantastic buys. Aside from the broad “metals and mining” sector which is all most people know about Mongolia, there are many plays to found in uranium, cashmere, agriculture… and even new changes in toll roads and water.

It can be seen as another way to play China seeing as nearly 80% of their exports are to the mainland, and an absolute tidal wave of Chinese money is being invested in Mongolia– new infrastructure, luxury hotels, telecom deals, real estate developments, etc.

Everyone from American Express to Ericsson to ZTE is establishing themselves in Mongolia– even Blackberry is launching service in the country… all because a flood of investment dollars and joint venture projects to tap natural resource wealth is creating legitimate, overwhelming demand for services.

I am also looking at clues in demographics– population trends are good predictors for change, and Mongolia is a country that is dominated by young people: 70% of the population is under the age of 35.  This means that they move extraordinarily quickly and are hungry to get deals done.

The stock exchange was started in the 1990s by a 26-year old entrepreneur– this culture is full of people who want to make things happen.

In contrast to my time working in Switzerland in private wealth management, the Mongols move at light speed.  If I were you, I would get this out to your community to see if there’s any interest… and I would suggest two things:

1) The Mongolian Stock Exchange is sitting on multi-year lows; the entire market capitalization is less than $250 million, and daily turnover is often less than $1 million… so institutional capital tends to move prices in a big way.

It’s fairly transparent for foreign investors to get in to this market– which is exactly what I am doing right now. My guess is that there will be a Mongolia ETF very soon once the market has tripled and you start hearing about it on CNBC.

Too late in my book.

2) I know you have a lot of expats who read your letter and are looking for a place to go… I would highly suggest Mongolia– if you have the means and are looking for adventure, Mongolia is a land of opportunity.

Mongolian entrepreneurs are itching to do JV deals with subject matter experts to bring new services to the country… and there’s no such thing as ‘paying your dues’ in Mongolia. You show up, and if you’re smart, you move to the top of the food chain immediately.”

———-

Simon again. What Christine says rings absolutely true… to me, the biggest benefit of living the expatriate lifestyle isn’t the cultural adventure or cheap cost of living– it’s being able to immediately plug in to the movers and shakers who can get deals done and make things happen.

In New York City, San Francisco, LA, etc., it can take years to clutch and claw your way up the ladder and get noticed. Around the world, though, in places like Colombia, Mongolia, Palau, and Panama, it’s possible to become a player very quickly.

Before moving anywhere, though, it’s always a good idea to see the country first hand and scout the opportunities for yourself on the ground. If you’re interested in Mongolia, consider checking out the annual Mongol Rally which takes place in September each year… there is no more unique way to see a country in my opinion.

Let me know if you want to hear more about investing in or moving to Mongolia, and I will do my best to answer your questions.

About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

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Comments on this entry are closed.

  • JL

    OK…. now how does one invest in the Mongolian market??

    • Jeff

      A solid brokerage firm is Asia Pacific Securities. I’ve heard there will also be some hedge fund/ etf type investment products coming to market in the near future.

      • Quitit

        Be very careful with doing business in Mongolia. It’s a culture based on Deception. I lived there 8 years and could tell you story after story. The worst thing you can do is to get into a partnership. If you want to do things above board and honestly you will be pulling your hair out. If you know how to work ropes of corruption then this is your place.

  • hh

    Hi Simon,
    always love to read your blog. I’ve been to mongolia sometime ago. and thought as well that the combination of low population and hugh natural resources is a opportunity as well.

    can you or Christine comment on possible brokerage firmes in Mongolia.
    I’ve seen there are some companies listed at the MongolStockExchange – any companies/area to be aware of or one you think might provide a good bet to participate on such a countries future e.g. bargains.

    There has been some intransparency recently – e.g. the IPO and take over of Anod Bank by the government under some dubious circumstances.

    keep your interesting work going. i’ve been on the road for the last 2 years as well…
    greetings from europe

  • Marion Broussard

    More info on Mongolia would be very interesting. I’m also interested in your take on Ecuador as a place to visit/buy property as we are planning a trip there later this year. Thanks

    Marion Broussard

  • ryan

    this sounds extremely interesting please keep Mongolia in the loop of your dispatches…opportunities to get in on the ground floor of a country mass exporting to two possibly three of the BRIC countries!!

  • Malcolm Miller

    I am interested in hearing more about investing in Mongolia.
    Really enjoy and gain a lot from your newsletter.

    Regards
    Malcolm Miller

  • David

    I also like Mongolia because it piggy-backs on China while possibly remaining somewhat shielded from the impending social upheaval there.

  • DON AKINS

    It’s fairly transparent for foreign investors to get in to this market– which is exactly what I am doing right now
    Really? How does a Canadian go about investing in stocks on the Mongol Exchange? Or researching them for that matter?

  • Nick

    Dear Sir,

    I would very much like to learn more about investing in Mongolia. While it may not possible to make specific recommendations, would it be possible to recommend a source (e.g. website, newsletter, etc.)? I think Google finance allows users to list some or perhaps all of the issues traded on the Mongolia exchange. Maybe the Mongolian exchange has a website?

    Any information or ideas you could pass along would be most welcome. Thank you again for your continued e-mails. You provide excellent information and insight.

    Best regards,
    Nick

  • Mark

    Hi Simon:

    Pretty new to your newsletter, and I have really enjoyed it. Christine is someone you need to get specifics from…she needs her own newsletter ASAP. An ETF will be “too late” in Mongolia…OK…so let’s get her to give us the goods! I’m sure your readers will pay a Premium for it, as I will, if you’re able to pull it off. But run, don’t walk!

    Keep it up Simon

    Mark

  • Kyle

    Can you provide guidance on how to access Mongolia’s stock market. Which city would serve as a good base in setting up on operation to pursue the many opportunities present in the country.

    Gracias

    KL

  • George D. M.

    Interesting article about Mongolia. But, you mention Colombia in the same article.
    You ask if one would “want to hear more about investing in or moving to … Mongolia”.
    As my wife is Colombian, I welcome the same question regarding that country, and yes, I’m interested in hearing more about investing in or moving to Colombia.
    Thanks
    GDM

  • Tim

    Hi Simon,
    I am a big fan of your writings and travels, I would like to know more about Mongolia and investing in that country.

    Thank You,
    Tim

  • Carlos

    Sounds like the right kind of opportunity! I’d love to know more, but could this work for the small investor?

  • Panman

    I’d like to hear a lot more about Mongolia. Investing there, moving there, what they need, etc.

    For example: Is English widely spoken?

    Panman

  • Billy Rice

    Thanks for the info. Looking forward to updates and possibilities of ETFs as an entry point. Appreciate it. Billy

  • francesco

    Well, moving to Mongolia seems a desperate choice. No sea. Probably very continental weather with very cold winters and very hot summers. Also people speaking a totally non-understandable language. But I may be wrong, it may be a nice place with beautiful rivers and acceptable climate. Additional information regarding that may be interesting to have an idea.

    Certainly I am not interested to move in a country just for money.

    From your list Colombia and Palau seem much more acceptable.

  • La Grange

    There is at least one investment to made in the very large copper project of Ivanhoe Mines (IVN on the NYSE). It is still a few years of production though.

    I would be very, very interested in other investment opportunities.

  • http://newenglandschoolofphlebotomy,ltd.org Dr George Franco

    Hi,
    Please tell me a brokerage firm in Mongolia that I can contact so that I may invest . Thank you.

  • Clement

    simon,

    thank you for the newsletter. keep up the very informative newsletter. on mongolia, i agree there is opportunity there. What authority or instiution regulates the setting up of companies there.
    I am inviting others on this page to exchange investments ideas with me too. i am look for prospective business to invest anywhere in the world. SSo i thank you for the newletter.

    Keep up the good work simon.

    many thanks.

    Clement

  • Jim Cleveland

    Great reading. Thanks for all the good ideas. On Casey info I have chosen to buy property and invest in Uruguay. Any additional info you can provide will be much appreciated Jim

    • John Galt

      Uruguay just elected a leftist gov.  They are now taxing world wide income also.  No thanks.

  • Jim Cleveland

    Great reading. Thanks for all the good ideas. On Casey info I have chosen to buy property and invest in Uruguay. Jim

  • Big and Tall

    HI Simon
    I just read your news letter that you have sent me to my private email address and I would like to know more about investing in Mongolia ??

    Thanks ..

  • http://www.bigandtall-stores.com Big and Tall

    Hi Simon
    Just read a newsletter I signed up for regarding Mongolia and I would like to know how can I invest there ????

    Thanks

  • Jack

    I visited Mongolia last year and enjoyed myself very much; I have been considering a return trip. Can’t say enough about the friendliness and helpfulness of the people. I’d like to know more about investing there – brokers, the exchange, transparency, and company’s and their reporting requirements.

  • Ulzi

    Hi All
    I absolutely agreee with Simon. Mongolia is full of opportunities for the creation of wealth, enterprise and future prosperity.Never in our history, Mongolians had such vast opportunity I should know I am Mongolian. There are handful of brokerage firms Northernsec.com, Altan san securities and BD Sec and some small firms. Mongolian government just announced reform of stock exchange to improve transparency and its operations. If anyone wants to know more about specific info or about Mongolia please contact I’ll try to help as much I can. Actually lots of Mongolian young people speak 3-4 languages English,Russian and Japanese also Chinese and well educated. We are open and friendly yet dynamic hungry for success.
    Kind Regards

  • Ray

    Dear Simon,

    Could you please give more details on Mongolia for people who actually want to relocate there?
    Any reliable local contacts you can recommend?

    Best regards and keep up the excellent work, Simon.

  • http://www.facebook.com/people/Bogi-Chan/559466535 Bogi Chan

    hi there!
    I would like to know more about the ways to invest in mongolia, Like what are the best ways to invest? which directions are better?

  • Dixon777

    There is already an ETF, called METF. How about it?

    • LiveFree

      I looked up METF, there is no listing on yahoo as a ticker nor as a web search.

  • Terry Brumfield

    How can I invest in this country and their exchange…I can not find an ETF at this point. THANKS, Terry

  • Volinath

    I Put $5K into Nicks (Asia Pacific Securities) Suggestion (APP) and lost 26% in 3 weeks.  Nick did not even call me to tell me that their recommendation crashed. Anyone thinking about investing in this market because they too want to be as “rich as a Mongolian” should be very cautious or they will soon be as broke as the federal reserve system.  Also, people need to be very careful when they change their lives to relocate and just get up and go.  Most people return to their homes (with less than they started with when they left) after the house has been built and the reality of boredom and strangeness hit’s them. Simon is a great salesman but a salesman he is – remember he is not your buddy.

  • Sonin

    http://www.mse.mn/index.php here is link for Mongolian Stock exchange. will be glad if find what you look for : )

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