Defy Political
Chaos for Profit By Chad Shoop, Investment Analyst Dear Sovereign Investor, A country that is arguably on the brink of civil war, on the brink of a recession and battling one of its deepest crises in years has witnessed billions spent on investment in the region's consumers.
In early May, the Central Group opened one of the most elegant and luxurious malls in the heart of this Asian country.
That same week, the Mall Group announced it is set to make history with six new projects and turn this same country into the regional shopping hub for the 600 million consumers populating the ASEAN region.
Ironically enough, the local consumer confidence in the country hit its lowest level of the past 13 years in April.
Wall Street continues to advise individual investors to steer clear of this country despite the billions that are pouring in from large investors. Heck, even your gut reaction is to sell … but that couldn't be more wrong. Advertisement
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Regardless of your personal feelings about drones, you need to watch Marc's report. Because, as cyber-defense expert P.W. Singer puts it, "it doesn't really matter if you're against this technology… it's coming." Click here to watch. I am talking about Thailand, home to roughly 66 million people — and as of this week, a soft coup that has removed the politicians from power and installed the military atop the government temporarily. And while the riots, protests and the current state of martial law should not be taken lightly, this turmoil signals a great time to buy.
With billions being spent on the consumer-driven projects mentioned above, it tells me one thing: This is a country I want to be invested in. Follow the Smart Money It's a simple philosophy: Follow the smart money. Jeff Opdyke routinely counsels it and it is one I have seen work for him over and over. The premise is that these large, multinational luxury goods retailers know more than you and me. They are experts at market research investing quite a bit of money in it. They are not merely opening a brokerage account or buying a few shares of stock. These guys are throwing billions into Thailand at a time of political turmoil, and that's something to pay attention to.
Instead of fleeing the country, the Central Group and Mall Group have each opened luxurious malls and committed more than $1.5 billion to opening new malls in Thailand.
Companies such as Ralph Lauren, Saint Laurent, Tom Ford and Pomellato Jewelry are among the luxury brand names that are just now entering the country.
U.S. and European economic growth is crawling along at a snail's pace, forcing luxury goods companies to go where the money is now being made. Thailand and the ASEAN region represent that opportunity. More Gains Coming The reality is that Thailand routinely has had political coups. In fact, the Thai army has a long history of interfering with politics — there have been 18 previously successful or attempted coups since 1932 when Thailand became a constitutional monarchy. What's more, the country has had five prime ministers since 2006. But, as Jeff pointed out, daily life in the country goes on. People and businesses continue to consume food and energy, conduct transactions and live their lives. Albeit, at a reduced amount, but that is only temporary.
Indeed, in the wake of this latest coup, the Thai stock market barely moved — an indication that global investors aren't spooked by the political struggles in Thailand.
This certainly isn't the first time we've watched a country struggling with political turmoil rebound economically. Earlier this year, the Egyptian stock market rebounded to its pre-Arab spring highs despite the ongoing political instability. We know this, yet our gut reacts to the volatility and sparks a fearful reaction to flee stocks in places like Thailand and Egypt.
That's why it's important to notice which direction the smart money is flowing.
In his article, Turning Global Unrest Into Profits, Jeff recommended grabbing a broad-based exchange-traded fund (ETF): iShares MSCI Thailand Capped ETF (THD). Since then, this ETF has rebounded about 15%, but the good news is that it still has a long ways to go. It still trades 30% below its 52-week highs — and Jeff and I believe it will go much higher than that.
As you can see in the chart below, THD still has plenty of room to climb. The green line is an Egypt ETF, and blue is a Thailand ETF. The black vertical bar represents when Jeff first sent you his article to jump into Thailand. Egypt rebounded more than 90% since it bottomed and we believe Thailand is on the same road to recovery. Thailand's ETF, so far, has only rebounded 15%, and we are another 30% away from the ETF's highs from before the political fiascos began. When the dust finally settles, I wouldn't be shocked to see Thailand's ETF soar more than 90% from the lows. 
See larger image If you didn't get in on our original recommendation there is still time.
In fact, Jeff has added three Thai stocks from the transportation, medical and banking industries to his Profit Seeker portfolio, and is now considering a fourth.
Thailand, despite its coups and political unrest, represents a very profitable opportunity. Just follow the billions flowing into the country and invest in Thailand. Trust me, they're not done yet. Regards,
Chad Shoop
Investment Analyst P.S. Growth in the United States has slowed to a painful crawl and the threat of weakness in the U.S. dollar isn't helping to protect your assets. Another option to diversify your wealth is through EverBank's All Weather CD — a portfolio of currencies and gold that will allow you to diversify your holdings out of the U.S. dollar. As an investor, you will gain exposure to a variety of markets, guarding your wealth against America's struggling economy while taking advantage of strength abroad. For the sake of full disclosure, The Sovereign Society receives a marketing fee based on our relationship with EverBank. But, honestly, I'd tell you about this opportunity regardless, because it's one of the safest and most profitable ways to diversify your money outside the dollar I've ever seen. | |
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