Re "wait for the next good shock"...
yeah, once an IMF plan kicks in, there is usually a second big
shock when the economy is contracting, interest rates are
still through the roof, it looks like GDP growth will be
-5% or -10% for the year, the currency dives again and everyone's
screaming "oh my god, I had no idea it was going to get this bad!"
Often accompanied by riots in the streets...
if there isn't big-time political risk (like, *significant* probability of prolonged anarchy, Marxist-Leninst revolution
(huh? what's that?),
or takeover by some retro-religio-fascist faction with no clue about
economics), that's a good time to buy.
I still feel that it is a good idea to get a handle on how values in
a foreign country compare to historical values, before buying in.
I don't have enough time to research this carefully enough, which
is why I haven't bought anymore FPF or JOF recently. (Also I have
a full position in
on FPF at an average price of about 11 -g-.)
Somebody I know doesn't like me to sell at a loss, so I haven't
been as agile as I should have here-g-.
Another good thing to do is to buy the more solid areas when they
get whacked by association. Just remember that they may have to
compete with the places whose currency has been clobbered, and they
may do lots of business with them, too. (Forgetting that is one thing
that lulled me into FPF too soon... the other is giving too much
weight to MB's thoughts vs. my own misgivings, e.g. when the finance
minister starts griping about speculative attacks on the currency,
get the h*ll out and wait for the devaluation, no matter what
anyone says!).
Cheers,
HB |
