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The Daily Reckoning | Saturday, December 1, 2012 This country, larger than France, is about to hit the world economy, Readers weigh-in on GMOs and their potentially gruesome outcomes, Plus, all this week’s reckonings archived for your organic consumption... --------------------------------------------------------------- Chris Mayer’s Special Situations Presents... Forget Black Friday... This is the Ultimate Buy One, Get One Free Deal It may sound crazy, but every once in a while the stock market offers investors the opportunity to buy one stock and get another one FREE. Just like at a department store. The secret is finding a little-known type of stock that, once discovered, can return 5-10 times the original investment. It doesn’t happen often, but right now, you’ve got a chance to take advantage of one for yourself... Click here now to see what it is... Ed. Note: Joel Bowman, our managing editor, is trekking through some Costa Rican jungles this weekend...jungles in which Internet is, apparently, not handy. We trust he’ll return safely next week but, in the meantime, we cross to our resident value maven, Chris Mayer, who has the good word on some market opportunities in another jungled country... one across the Pacific. Please enjoy... [Note: The following column originally appeared in these pages on Wednesday, November 28, 2012] The Daily Reckoning Presents “The Best Unopened Market in the World” Chris Mayer Archibald Colquhoun returned from a trip to Myanmar (Burma) enthusiastic about the opportunities in the country. He wrote a book about it all: Burma and the Burmans: Or, “The Best Unopened Market in the World.” Colquhoun writes exuberantly about the oil resources of the country, as well as its jade, gold, copper and coal. There are dense forested hills of teak, unspoiled fisheries and fertile valleys. Nor did he forget the potential for reopening old trade routes connecting China and India. The thing is, he wrote about all this in 1885. But Colquhoun was right. By the 1920s, Burma was a regional hub and relatively rich. But after those prewar peaks, Myanmar suffered through a long period of decline and isolation, nurtured by an oppressive government. Today, Myanmar is again in the news as it reforms and opens up to the world outside. It is a market of 60 million people poised to join the global economy. It is a large country, bigger than France, with rich stores of natural resources and much untapped potential. Consider some points from a recent UBS report by Ian Gisbourne titled “On the Ground in Myanmar.” Specifically, consider some comparisons with Thailand, a country it was much the equal of 80 years ago and where the populations are close today: More tourists arrive in Thailand in a single week than arrive in Myanmar in a year There are more hotel rooms in Bangkok alone than in all of Myanmar Current power consumption per capita is only 5% of Thailand’s There are only 300,000 vehicles in Myanmar, compared with 5.4 million in Thailand Former capital and biggest city Yangon has only 740 apartment buildings, compared with 15,000 in Bangkok Mobile phone penetration in Myanmar is 1%. In Thailand, 115%. (Some people have more than one.) Life expectancy in Myanmar is 10 years less than in Thailand Fertilizer use is 43 times greater in Thailand than in Myanmar. As you can see from just this partial list, there are opportunities in tourism, hotels, power generation, cars, mobile phones, health care and agriculture. Myanmar is like a market frozen in time. But things are changing. As I write, the government is still hammering away at a new investment law that will open things up and make the rules of the game clearer. The biggest source of foreign investment right now is oil and gas. Natural gas is Myanmar’s biggest export. (It supplies Thailand with 21% of its natural gas.) Yet the value of Myanmar’s total exports runs to only $9 billion. Compare that with Thailand’s total of $225 billion. There is plenty to do on the oil and gas front. Myanmar is actually one of the oldest oil producers in the world. The country exported its first barrels back in 1853. In agriculture, Myanmar is the world’s second-largest exporter of rice. The alluvial deltas of the Irrawaddy River are ideal for growing rice. Scottish journalist Sir James George Scott marveled at the inexhaustible soil and the ease of cultivating it back in 1882. “The laziest farm is swampland,” he writes, “where the ordinary rainfall is sufficient to produce the sodden ground requisite for a rice crop.” He goes on: So rich is the soil of [Burma] that it has only to be scratched to burst into plenty... The southwest monsoon, commencing in early June, soon reduces the ground to a soft sea of mud. Even today, most people in Myanmar work on farms growing over 60 different crops, including wheat, beans, rubber, sugar and oilseeds. Beyond this, Myanmar has over 1,800 miles of coastline. Beautiful beaches lay almost untouched by human feet. A few developments have just broken ground. (And I had to smile at the quaint regulations, such as one that requires no building be taller than the coconut trees.) There are over 800 unexplored islands in the Andaman Sea. The country is a significant source of fresh fish and shellfish. It is also one of the largest sources of hardwood in the world. Real estate is a big opportunity. Hotels, I’ve mentioned. But there has been virtually no development of any kind in Yangon (the old Rangoon). Gisbourne notes that one large shopping center in Bangkok has more retail space than all of Yangon — a city of 4 million people! Similarly, one office building on Sathorn Road in Bangkok has more space than the whole of Yangon. As the economy develops, the demand for things like hotels and office space and shopping centers will increase manyfold over what exists now. So will the demand for railways and highways, pipelines and refineries, cell towers and power plants. Of course, predictions like these can go very wrong or take much longer to play out than expected. I read Norman Lewis’ classic Golden Earth: Travels in Burma. Lewis is universally celebrated as a great travel writer, but he is prone to the occasional howler. (Beyond the ridiculous romanticizing of poverty-stricken peasant life, at one point he writes that Burma is “free from the damaging myths of color, race and caste that bedevil the internal relationships of so many nations.” I can’t imagine a more naive statement.) Anyway, Lewis’ book came out in the 1950s. He wrote glowingly about Burma’s prospects. Yet a military coup lay less than 10 years in the future, which would send Burma on a near 50-year journey in darkness. So you never know. Nonetheless, the best time to get interested in places like this is when they just start to open up. That time is now. My hunch is that Archibald Colquhoun’s 1885 thesis is back in play. Burma, now Myanmar, is the best unopened market in the world. Regards, Chris Mayer for The Daily Reckoning Wanted: Novice profiteers to skim off short term double digit winners... Do you have the next 21 days to take double-digit trading gains? If so, this new challenge is for you. *** This challenge is completely legal, always repeatable, and fun... *** No experience necessary...and you can easily do it from your home computer or cell phone... So if the prospect of regular, short-term trades interests you, accept the 21-Day Trading Challenge here... ALSO THIS WEEK in The Daily Reckoning... The World is Not Flat By Addison Wiggin The boxes were packed. The pictures of Mises, Hayek and Rothbard had come off the wall they’d adorned since 1997 in Suite 203 in the Cannon House Office Building. A maintenance crew stood outside, garbage cans at the ready, perhaps a little too eager to swoop in and finish the job of making way for the next occupant. Rep. Ron Paul was moving out. We had the privilege of meeting with him on Wednesday, Nov. 14... Is Genetically Modified Food Killing Us? By Alex Daley Last month, a group of Australian scientists published a warning to the citizens of the country, and of the world, who collectively gobble up some $34 billion annually of its agricultural exports. The warning concerned the safety of a new type of wheat. As Australia’s number-one export, a $6-billion annual industry, and the most- consumed grain locally, wheat is of the utmost importance to the country. Why ADT is a “Buy” By Chris Mayer On Oct. 25, an investor group called Corvex Management filed a 13-D with the SEC. As required by law, Corvex had to disclose that it had acquired more than 5% of a company. Corvex is an activist investor. It does not buy stocks to sit on them. It buys them with the idea that there is some identifiable catalyst that will send the shares higher. Corvex pushes for that catalyst by engaging with management. Credit and Credibility By Greg Canavan Is it laughable, or lamentable? The market, that is. In the past few years, it has become a joke...a tool of manipulation, an unreliable source of information. Despite the outperformance of the US equity markets this year, ordinary investors (presumably people with savings they would like to invest in productive and attractive businesses) are not interested. Grab Your Share Of Big Oil’s Paycheck... Pictured below is a map many Americans have never seen. That’s a shame, because today it holds one of the best profit opportunities the market has to offer. Big oil knows this map well — heck, it’s one of the reasons they always seem to turn a profit! Today, thanks to a little-known loophole, you could start grabbing your share. Click the map to find out how... The Weekly Endnote... As Fellow Reckoners will recall, we’ve run a few articles recently cautioning readers as to the potential harm caused by GMOs and their attendant special interests, including this one by Severine Kirchner, PhD. and this one, by Eric Fry. Here’s a picture from the Ms. Kirchner’s piece, in case you missed it: Of course, this is just one potentially gruesome side of the story. There’s also a potentially non-gruesome side...you know, for those who don’t mind gambling with potentially gruesome outcomes. That side was captured in Mr. Alex Daley’s article (archived above). As you might expect, his piece drew a barrage of emails from Fellow Reckoners. Here are a few... First up, reckoner Jason L. writes in to say... It is unfortunate that you have such a one-sided lack of perspective in the case of GMOs and their safety for all communities. Generally I enjoy reading what you have put together, but it seems to me that this time around it was a shameful plug in favor of Corporations like Monsanto. I think maybe studies done by independent entities should be quoted alongside. GMOs are illegal in many countries for a large variety of reasons. I think the change you will see in the not-so-distance future 8s people standing up for what they eat. DR: Perhaps you missed the above articles, by Kirchner and Fry, good sir? Next up, Alice M. suggests that... Alex get together with Mike Adams at www.naturalnews.com. If he doesn’t know Mike, he has the information that supports the dangers of GMO. When he refers to corn syrup, Monsanto who is deliberately running good farmers out of business, is at the forefront of this tidal wave. I won’t get into the ultimate goal of many of these companies. I am so grateful that you all are finally covering this, other than alleged “conspiracy theorists.” What is going on is not good. Have Alex contact Mike soon. Thank you. Love your awesome “reckoning.” Next up, Reckoner Ned M. muses... Regarding your somewhat positive spin on GMOs: I understand you’re coming from a business perspective and also looking into the evidence that GMOs will not negatively affect human health. I hope food science will prove to be successful. Having said all that, I do not want to be a guinea pig for Monsanto or any multi-national conglomerate, however, I do not want to stop their experiments. There are plenty of morons out there who would blindly trust the food scientists (as many trust politicians), so be it...I just want the ability to freely choose between food that man has been eating for a million years (time tested) and GMOs. I live in California and the morons in this state voted down the right to know if their food is GMO or not. I’ll wait till the 50 year experiment is conclusive before I trust a food conglomerate (remember Thalidomide). By the way, if your taste buds haven’t been distorted by the type of chemical farming they have been doing for decades, the taste difference between naturally grown food and chemically grown food is like night and day. Sure, the chemically grown food is big and without blemishes and pretty, but it has no taste and studies have shown their mineral content do not compare to the mineral content of food grown 75 years ago. Sadly it is like much of America, quantity but not quality. I hope I’m proven wrong here because I love science. This is just one man’s opinion. --- As always, we encourage the free exchange of ideas. If you’d like to voice your own, feel free to email us at the address below and… …enjoy your weekend. Cheers, Joel Bowman Managing Editor The Daily Reckoning ---------------------------------------------------------------- Here at The Daily Reckoning, we value your questions and comments. If you would like to send us a few thoughts of your own, please address them to your managing editor at joel@dailyreckoning.com Additional articles and commentary from The Daily Reckoning on: Twitter Facebook DR iPhone APP The Daily Reckoning is committed to protecting and respecting your privacy. 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