June 24, 2011
A few days ago, I met with a brilliant young geneticist who has been able to devise a unique, cost efficient way to test for the presence of particular genes.
He wants to offer a service to test for CCR5-delta 32, a particular mutation of a gene found in Northern Europeans (and those of Northern European descent) that has shown resistance to Smallpox, HIV, and West Nile virus.
Among people in high risk groups for such infections, demand for getting test is strong, and his method has been able to reduce the cost of testing by up to 90% with no increase in error rate.
Rather let the idea fester in academia for the next several years, he’s decided to go into business… and I’m considering making an investment in the venture.
Another entrepreneur I met with has a website that sells electronic cigarettes in the UK. If you haven’t heard of this, it’s a device that looks, feels, and tastes like a cigarette, but produces water vapor instead of smoke.
It also gives the user complete control over the amount of nicotine s/he wants to ingest, making it a great tool for people who want to gradually wean themselves off the chemical.
This particular entrepreneur noted that a large number of Brits who currently smoke are trying to quit. The British economy is weak, and faced with declining income, Brits are cutting spending wherever they can, especially expensive habits like smoking.
Even in this weak economy, he is doing brisk business and sales are growing.
I’m telling you these short stories because I want to address an important point: even in dismal economic conditions, opportunities abound as long as you can still find a way to create value. These are just two examples.
On to this week’s questions. First, KC asks, “Simon, at a recent conference I asked a famous expat personality about buying and storing gold in the southern cone of South America (Chile, Argentina, or Uruguay). He and his associates could not provide specifics and suggested that I ask you. Any thoughts?”
Of the countries you mention, Chile is the best option for buying gold. In downtown Santiago, some of the money exchange houses (casas de cambio) display placards with “moneda de oro” (gold coins). Because they sell informally, they are not required to collect any VAT, and premiums can be as little as 1% over spot price.
There is no set figure, so it’s best to shop around from place to place and negotiate your own deal.
Private storage options in Chile are limited, though, and it’s difficult to open a safety deposit box at a bank without residency.
Of the other countries, Fort Box in Punta del Este, Uruguay is a good storage option but if you travel to Uruguay you have to declare any gold that you bring in. As for buying in Uruguay, I saw several Indumex locations that had inventory to sell when I was in the country recently, though prices are much higher than Chile.
I wouldn’t trust Argentina for either buying or storing; the government is just too crazy, and asset seizure is a distinct possibility there.
Next, Rob asks, “As far as Chile and all the positives you have brought to light, how would you address the recent volcanic eruption?”
I’ve addressed natural disasters in Chile a few times, and it’s not something that I want to be cavalier about… but the truth is that the safest place to be when a Chilean volcano erupts is in Chile. Argentina is screwed, but Chile moves along without a wince.
This is because the prevailing Pacific winds generally blow from west to east, towards Argentina. In fact, most of the post-eruption ashfall photos that were circulated in the press a few weeks ago were actually from Argentina.
There are a handful of tiny villages in Chile that are settled at the foot of some volcanoes, and a few of these were evacuated in case of lava flow.
Last, L.T. writes “I am a subscriber to Tim Staermose’s 4th Pillar service. My US-based broker will not allow me to buy one of his recent recommendations because it’s an online gaming company. Do you have any suggestions?”
Yes. Take your money and your business elsewhere. What an absolute farce.
Will your broker let you buy Philip Morris? A weapons manufacturer? Casino stock? Booze purveyor? Things must be loopier than I thought in the financial system if brokers have to approve your orders.
If I were in your shoes, I’d look offshore to a broker that works for YOU, not the other way around.
I’ve made a number of recommendations in Sovereign Man: Confidential, and Tim has done the same in his 4th Pillar service… which, if I may brag, delivered yet another winner to its subscribers this morning, closing out a low-risk, 13.6% gain in just 30-days with the successful takeover of Territory Resources (ASX:TTY).