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Most Read Posts (64 articles) – Discover which articles Underground Investor™ readers are most interested in. See the full database, including the most recent articles that may not be listed below,  by clicking the link above.

Sept. 27, 2007 – 101 Reasons Why Managing Your Money is the Quickest Way to Build Wealth
Sept. 25, 2007 – 10 Surefire Ways to Make an Investment Fortune
Sept. 15, 2007 – Why the U.S. Feds 0.50% Rate Cut Won’t Save the Markets
Sept. 15, 2007 – U.S. Interest Rate Cut to Have Little Long-Term Positive Effect
Aug. 20, 2007 – How Much Does the Gov’t Really Manipulate Markets
Aug. 9, 2007 – More Gov’t Foolishness (or Lies) Again: Markets are Sound…NOT!
Aug. 9, 2007 – Chinese Tariffs and the Nuclear Option
Jul. 24, 2007 – How to Invest Like the World’s Greatest Investors
Jun. 17, 2007 – Get Out of Dollar-Denominated Bonds While You Still Can!
May 1, 2007 – Uranium Stocks are Finally Getting the Attention They Deserve
Apr. 23, 2007 – The Emperor’s New Clothes Abound in the Investment Industry. Don’t Get Cheated by Your Advisor
Apr. 20, 2007 – Use Intelligent Strategies to Push Risk Back onto Investment Firms
Apr. 19, 2007 – In Risky Markets, Follow the Behavior of the Ultra-Rich, Not the Rich
Apr. 12, 2007 – The Secret to Investing

Gold Investments (37 articles) - Use traditional rules to invest in gold stocks and you’ll lose money hand over fist with this asset class. Learn more about one of the most important components of every portfolio for future years to come. See the full database, including the most recent articles that may not be listed below, by clicking the above link.

April 23, 2008 – Will U.S. Markets Crash Now or Later?
Feb. 4, 2008 – Could Chinese New Year’s Fuel the Next Rally Higher for Gold Stocks?
Jan. 29, 2008 – Even After This Strong Run, Gold Stocks are Still a Bargain Today. Here’s Why.
Jan. 5, 2008 – A Sneak Peak at Our Premium Level Information
Nov. 4, 2007 – Is Hyperinflation Coming to the U.S.? It’s Time to Stock Up on Gold.
Nov. 4. 2007 – Gold is the Best Investment Today, History Tells Us So.
Nov. 2, 3007 – Gold Expensive at $791/oz.? Not by a Longshot
Jun. 5, 2007 – Learn How NOT to Invest in Gold
Mar. 30, 2007 – Navigate the Minefields of the Investment Information Highway
Mar. 7, 2007 – This Bounce in Gold Markets Merits a Cautious Approach
Mar. 6, 2007 – Gold Stocks Correction – What it Means?
Feb. 28, 2007 – How to Profit from a Weakening Market, Gold Stocks, & More, Part II
Feb. 28, 2007 – Buying Opportunity in Gold Stocks
Feb. 28, 2007 – How to Profit from a Weakening Market, Gold Stocks, & More, Part I
Feb. 23, 2007 – Uncover the Ignored Asset Classes
Feb. 12, 2007 – How Do I Know that Institutional Money is Still Not on Board with Gold?
Jan. 25, 2007 – If You Don’t Own Gold Stocks, You Need To
Jan. 23, 2007 – Building Wealth Requires More than Just Contrarian Investing
Jan. 14, 2007 – Use the Long Tail of Investing to Accurately Predict the Price of Gold
Jan. 11, 2007 – The REAL DEAL about Gold and Energy
Dec. 13, 2007 – Commodities and Asians: Apparently We All Look Alike
Nov. 6, 2006 – Sometimes Silence is Golden
Oct. 10, 2006 – Shock and Awe Awaits Global Markets
Oct. 4, 2006 – Is Gold’s Correction Over Yet?
Oct. 2, 2006 – Fiat Currency Concerns Give Rise to a Gold & Silver Backed Currency System
Oct. 1, 2006 – The Gold Timeline – A History of Gold Prices
Sept. 16, 2006 – Has the Commodities Bubble Burst? No, No, No!
Sept. 13, 2006 – Sell the Rumor, Buy the News
Sept. 11, 2006 – Gold’s Speculative Stigma is Unwarranted
Sept. 3, 2006 – Gold’s Glitter is Genuine
Aug. 14, 2006- Knowing Your History is More Important to Creating Wealth than Fundamental Analysis

Financial Crisis, Dollar Crisis & Recession Proof Investing (30 articles) – Foolish investors’ eyes lit up as New Century Financial dropped from $30 to $20 a share during the recent subprime mortgage fiasco. Their hearts thumped with excitement as shares dropped from $20 to $10 and they doubled down. When shares dropped to $5 they thought it had to be the bottom and put their last remaining money into New Century. A month later, they lost everything. There is similar optimism surrounding the dollar today from self-declared currency experts. Discover why the dollar is much more likely to go the way of New Century than experience a comeback like Muhammad Ali’s Rumble in the Jungle. For the most recent articles, perhaps not listed below, click the above category link.

June 26, 2008 – The One Question That Will Have the Greatest Impact on Your Financial Future
May 14, 2008 – What’s Driving the Price of Oil Higher? It’s the Dollar, Stupid!
April 30, 2008 - How Low Will the Feds Go?
April 17, 2008 – Monetary Inflation. How Increased Paper Wealth Can Translate into a Lower Standard of Living
March 3, 2008 – Why Investors Will Never Make Money in this Bear Market
Feb. 20, 2008 – The Secret to Building Wealth in Volatile Markets
Feb. 6, 2008 – Is Recession in the U.S. Coming? We’re Already in One.
Jan. 28, 2008 – The Outcome of the Fed’s Interest Rate Cuts? History is the Best Oracle.
Jan. 24, 2008 – The Fed’s 0.75% Interest Rate Cut – A Recipe for Future Disaster
Dec. 7, 2007 – The Dollar Panic. Is it Real?
Sept. 19, 2007 – Signs of a Peak Investment Crisis Keep Coming
June 18, 2007 – Alan Greenspan’s Call of Checkmate on China is Premature
June 17, 2007 – PIMCO’s Bill Gross and the Economist Agree with SmartKnowledgeU 6 Months After the Fact!
May 28, 2007 – The Politics of Higher Oil Prices
May 26, 2007 – Asian Countries Pooling Reserves to Protect Themselves from the Incredible Shrinking Dollar, Part II
May 25, 2007 – Asian Countries Pooling Reserves, Part I
May 3, 2007 – The Death of the 3-Year Treasury Note
Apr. 1, 2007 – The Next Cold War Will be an Economic One
Jan. 25, 2007 – Dollar-Denominated Bonds Faltering
Jan. 9, 2007 – Use the Longtail of Investing to Accurately Predict Dollar Behavior
Jan 7, 2007 – 10 Reasons Why Dollar-Denominate Bonds Aren’t Safe
Dec. 21, 2006 – Iran Presents More Trouble for the U.S. Dollar
Dec. 7, 2006 – The U.S. has Perfected the Incredible Shrinking Dollar

Free Stock Picks (24 articles) – While our top-shelf stock picks and ideas that have since returned 100% to 200% returns are reserved for our members only, here read articles about some mid-shelf stock picks and ideas that have already returned 30% returns in less than a year. Access the full database, including the most recent articles that may not be listed below,  by clicking the topic link above.

Jun. 4, 2007 – To Prove the Effectiveness of Our SmartKnowledgeU™ Investment System, Even Our Weakest Picks that We’ve Given Away for FREE Have Soared
Apr. 29, 2007 – After BAIDU, Possibly Focus Media
Apr. 2, 2007 – Profit, Don’t Lose From Market Corrections
Apr. 2, 2007 – Global Warming Presents Easy 30% Gains for Underground Investor Readers
Mar. 13, 2007 – Beware the Perpetual Bulls, Part II
Feb. 18, 2007 – Banking Sector FY 2008 – Positive for Japan & India, Negative for China
Jan. 4, 2007 – Chinese Technology Companies to Watch in 2007
Dec. 19, 2007 – MSFT and Internet Protocol Version 6
Dec. 12, 2006 – It’s Time to Keep a Close Eye on Indian Stocks ICICI & HDFC
Dec. 7, 2006 – The Ocean Becomes a New Growth Point in the World Economy
Oct. 30, 2006 – What’s the Safest Place to Invest in the Oil Industry Now?
Oct. 30, 2006 – You’ll Find Ignored Investment Opportunities in the DRC & Libya
Oct. 23, 2006 – Indian Banks Anyone? Four Letters: HDFC
Oct. 9, 2006 – Don’t Believe the Hype – Avoid Chinese Bank Stocks

The Peak Investment Crisis & Stock Market Crash (57 articles) – Bubbling underneath the surface, there lies a peak investment crisis. When it hits, savvy investors will build a fortune. Unfortunately, most investors will be blindsided and lose great fortunes instead. Access the entire database, including the most recent articles that may not be listed below,  by clicking on the above category link.

Nov. 4, 2007 – Is Hyperinflation Coming to the U.S.? It’s Time to Stock Up on Gold.
Nov. 4. 2007 – Gold is the Best Investment Today, Part II
Oct. 15, 2007 – Our New Forum on Facebook: Crisis Investing
Oct. 9, 2007 – Beware the Turbulence that Lies Beneath the Surface, Part I
Sept. 20, 2007 -The Signs of a Peak Investment Crisis Keep Coming
Sept. 19, 2007 -Why the U.S. Fed’s 0.50% Rate Cut Won’t Save the Markets
Aug. 9, 2007 – More Gov’t Foolishness Again
Jun. 29, 2007 – Don’t Let the Strength of the U.S. Markets in the First Half of 2007 Fool You
Mar. 11, 2007 – It’s the Difference Between Chasing & Building Wealth
Mar. 6, 2007 – What this Correction Means for Gold Stocks
Feb. 28, 2007 – How to Profit From a Weakening Market & Gold Stocks
Sept. 9, 2006 – The Peak Investment Crisis
Aug. 11, 2006 – How to Protect Your Portfolio During Turbulent Markets

A New Investment Paradigm for the 21st Century (11 articles) – Fundamental and Value investing may take years of patience to pay off (i.e. Apple Computers was a huge value stock at $13 a share and took more than four years of waiting to pay off huge), Growth investing often leads to chasing hot sectors that correct rapidly. Discover why changing conditions in today’s global market has created a new investment paradigm that is hands down the best way to invest today. Click the link above to see all articles, including the most recent articles that may not be listed below,  in this category.

Jul. 24, 2007 – How to Invest Like the World’s Greatest Investors
Feb. 25, 2007 – Frontrunning Can Make You a Fortune
Jan. 30, 2007 – The New Paradigm of Successful Investment Strategies
Jan. 21, 2007 – 10 Reasons the Longtail of Investing is the Only Way to Build Wealth
Jan. 16, 2007 – Use the Longtail of Investing to Predict Major Market Events with High Accuracy
Jan. 9, 2007 – Accurately Predict U.S. Dollar Behavior
Sept. 1, 2006 – What Mark Cuban Failed to Realize About Investing

The Biggest Investment Myths (62 articles) – All investment professionals, from investment firms to financial consultants to the financial journal purposely spread tales of lies and deception. Jim Cramer, an investment professional that amassed a fortune as a hedge fund manager, recently stated that the last thing he ever wanted to do is to tell the truth. Find out why deception is part of the game in the investment industry.  Click the category link above to access the full database, including the most recent articles that may not be listed below.

Oct. 25, 2007 – New Home Sales Went Up. So What?
Oct. 15, 2007 – Beware the Turbulence that Lies Beneath the Surface, II
May 6, 2007 – Economic Reports Drive Short-Term Behavior, but Hardly Represent the Truth
Mar. 21, 2007 – The Short-Term May be Rosy, but Beware the Financial Crisis that is Building Steam
Mar. 4, 2007 – Foreign Markets aren’t as Risky as the Pundits Say
Feb. 23, 3007 – Evolve Your Investment Strategies with Evolving Technology
Feb. 6, 2007 – My Problem with Investment Newsletters (except ours, of course!)
Feb. 4, 2007 – 10 Questions to Help You Find a Superior Financial Consultant
Jan. 30, 2007 – A New Paradigm of Successful Investment Strategies
Jan. 25, 2007 – Despite Evidence to the Contrary, Millions of Investors Will Believe Whatever they Want to Believe
Jan. 7, 2007 – 10 Reasons Why Dollar Denominated Bonds Aren’t as Safe as You Think
Jan. 5, 2007 – How Understanding MMA Champions will Make You a Better Investor
Dec. 18, 2006 – The True Determinants of Wealth Have Nothing to do with Asset Allocation
Nov. 12, 2006 – The Greatest Investment Myth Exposed: Why Modern Portfolio Theory WILL NEVER Make You Rich.

Wealth Literacy (88 articles) – Wealth Literacy is the new Financial Literacy. Financial Literacy may teach you to be fiscally responsible but you can still be financially literate and remain poor. Wealth Literacy fills in all the holes of Financial Literacy and teaches you how to build wealth today. Click the category link above to see new articles that may not be listed below.

Oct. 15, 2007 – Our New Facebook Investment Group – Crisis Investing
Oct. 9, 2007 – Beware the Turbulence that Lies Beneath the Surface, I
Apr. 23, 2007 – Beware the Emperor’s New Clothes -Don’t Get Cheated by Your Adviser
Apr. 20, 2007 – Intelligent Investment Strategies Push Risk Off of You & Back onto Investment Firms
Apr. 19, 2007 – In Risky Markets, Follow the Behavior of the Ultra-Rich, Not the Rich
Apr. 17, 2007 – Why Wealth Literacy is More Important than Financial Literacy, Part II
Apr. 15, 2007 – Why Wealth Literacy is More Important than Financial Literacy, Part I
Apr. 13, 2007 – Pop Investing is All the Rage, but it’s a Loser’s Game
Apr. 12, 2007 – The Secret to Investing in 3 Easy Rules
Apr. 10, 2007 – Build Wealth by Answering These 5 Questions
Mar. 30, 2007 - How to Navigate the Minefields of the Investment Information Highway
Mar. 12, 2007 – The Short-Term May be Rosy, But Beware the Financial Crisis that is Building Steam
Mar. 11, 2007 – The Difference Between Chasing Wealth and Building Wealth
Feb 23, 2007 – Uncover the Ignored Asset Classes
Feb. 21, 2007 – Why Traditional Education Stifles Your Ability to Build Wealth
Feb. 15, 2007 – 7 Habits of Highly Effective Investors
Feb. 8, 2007 – 10 Reasons Why a Professional Athlete’s Best Friend Needs to be his Financial Adviser

Politics and Stocks (30 articles) – Think you don’t need to understand politics to be a good investor? Think again. If you don’t understand politics, you’ll never fully understand the most likely future direction of global stock markets, oil, gold, and currency markets. Click the above category link to see the full database of articles, including the most recent articles that may not be listed below.

Apr. 11, 2007 – Building Great Wealth in Stocks Requires Understanding Politics
Apr. 1, 2007 – The Next Cold War will be an Economic One
Apr. 1, 2007 – Possible U.S. Military Intervention in Iran
Mar. 13, 2007 – To Err on the Subject of Chinese Tariffs May Expedite a Shakespearean Tragedy
Dec. 17, 2007 – Do Free Markets and Free Trade Exist?

Oil Crisis (15 articles) – Think oil prices are controlled by supply and demand, futures traders, or Peak Oil Theory? Think again. Discover the true determinants of oil price behavior, primarily dollar devaluation. Click the above category link to see the full database of articles, including the most recent articles that may not be listed below.

May 14, 2009 – What’s Driving the Price of Oil Higher? It’s the Dollar, Stupid!
May 28, 2007 – The Politics of Higher Oil Prices
Nov. 26, 2006 – Does the end of Mid-Term Elections Mean Higher Gas Prices Again?
Nov. 8, 2006 – The Peak Oil Theory was Created by – You Guessed it – Big Oil!
Oct. 30, 2006 – The Safest Place to Invest in the Oil Industry Now? – Oil Refiners, Pipeline Manufacturers, Deep Sea Platform & Drilling Manufacturers, and 4D Imaging Companies
Oct. 30, 2006 – You’ll Find Ignored Investment Opportunities in the DRC and Libya
Oct. 12, 2006 – How Has Prince Bandar bin Sultan Affected Oil Prices in Years Past?

Uranium Investments (3 articles)– The bulk of this information is contained within our members only area, but you’ll find an article or two here. Click the above category link to see the full database of articles, including the most recent articles that may not be listed below.

May 1, 2007 – Uranium Stocks are Finally Getting Some Attention. Better Late than Never.
May 1, 2007 – What Does Uranium Futures Mean for the Future of Uranium Stocks?

Africa Investments (5 articles) – For the more daring investor willing to place small bets for HUGE returns, Africa awaits.

Canada Investments (4 articles) – Articles about Canada and the Canadian stock market and hands down some of the best opportunities in ANY global stock market.

China Investments (21 articles) – Articles about Chinese stocks and the Chinese stock market.

India Investments (4 articles) – Articles about Indian stocks and the Indian stock market.

Japan Investments (4 articles) – Articles about the Japanese economy and stock market.

Russia Investments (1 articles) – Articles about the Russian economy and stock market

U.S. Stocks (25 articles) – Articles about U.S. stocks and the American stock market.

Vietnam Investments (3 article) – Articles about Vietnam and the explosive yet unregulated Vietnamese market.

Investment Psychology (22 articles) – One of the most important but yet most overlooked and ignored aspects of investing is psychology. Discover how an improper mindset can be the difference between huge losses and huge gains in your portfolio. Click the above category link to see the full database of articles, including the most recent articles that may not be listed below.

Feb. 7, 2007 – Investors Should Apply the Rule of Shopping 101 to Buying Stocks
Jan. 3, 2007 – Will the 2006 Year End Rally Continue into 2007?
Dec. 21, 2006 - Perception Can Overrule Reality in Driving Behavior but Reality Will Overrule Perceptions in Driving Outcome
Nov. 30, 2006 – The Recency Effect Hurts Investment Decisions
Nov. 2, 2006- Canadian PM Stephen Harper & Hungarian PM Ferenc Gyurcsany – the More Things Change the More They Stay the Same
Nov. 2, 2006 – Irrational, Not Rational, Behavior Often Drives Markets
Oct. 24, 2006 – The Financial Media are Like Bad Weatherman
Oct. 8, 2006 – The SmartKnowledgeU Reader’s List
Oct. 4, 2006 – Hungarian PM Ferenc Gyurcsany: We LIED Morning, Noon, & Night!
Sept. 26, 2007 – Move Over Harry Potter! The Deceptive Wizardry of Fund Managers
Sept. 17, 2006 – When it Comes to Investing, You Get What You Pay For
Sept. 16, 2006 – Why Do People Believe One of the Dumbest, Most Flawed & Deceptive Measures of Economic Conditions?
Sept. 13, 2006 – Why Book Smarts Won’t Help You Build Wealth
Sept. 10, 2006 – Investment Psychology 101
Aug. 24, 2006 – To Become Wealthy, Abandon Widespread Beliefs About Investing
Aug. 18, 2006 – Following Mainstream Media Will Lead You Down a Disastrous Investment Road
Aug. 3, 2006 – Following Short-Term Fluctuations Will Create Poor Investment Decisions

Options Investing (10 articles) – We don’t discuss options much here but occasionally, if there is a compelling play, we’ll write an article or two.

Water Investing (1 article) – Read articles about investing in water as a commodity as the world’s fresh water supply becomes more scarce.

The Zen of Investing (42 posts) – Read articles from our resident martial arts expert regarding how understanding principles of martial arts can make you a much better investor. A combination of “The Art of War” and “The Art of Investing” if you will. Click the above category link to see the full database of articles, including the most recent articles that may not be listed below.

Technorati Tags: investment blog, investment strategies, dollar crisis, financial crisis, oil crisis, stock market crash, howto invest gold, recession proof, best ways to invest, Wall Street bailout

I opened this blog with that comment to illustrate that money and greed will many times take precedence over issues of national security or the democratic desires of people. This is a concept that is extremely difficult for many people to grasp, especially those that have fallen victim to the mass media’s snow job (no pun intended in regards to U.S. White House Press Secretary Tony Snow).

However, one only needs to look at the Security and Prosperity Partnership of North America, an agreement signed by U.S. President Bush, Mexico’s President Vicente Fox, and Canada’s PM Stephen Harper on March 23, 2005, in relative obscurity, to understand the truth of my above statement.

I have heard many people state that the discussion of politics has no place in the discussion forum of investments and the stock markets. While this should be true, it is not. And if you don’t understand the inseparable links between politics and the stock market, then in the end, your investment decisions will suffer. I guarantee you this.

The Security and Prosperity Partnership of North America has major, widespread implications for the future economic direction and national security of all three countries, even regarding the possible development of a single North American currency that would replace the peso, the U.S. dollar, and the Canadian dollar, yet it was not widely reported on by the mass media. Have you heard about it before? If not, then you prove my point.

But much more damning evidence of the fact that finance, and not governments, make the world go round is apparent when exploring the lead quote of this blog. In March, 2006, the U.S. government decided to keep the African nation of Libya on its official list of state sponsors of terrorism. Despite this, and despite Ibrahim’s inflammatory comment directed toward the U.S. government, the U.S. government still decided to restore full diplomatic relations with Libya just five months ago and remove Libya’s label as a state that sponsors terrorism.

In fact, given the frequent White House criticisms of Venezuelan President Hugo Chavez’s similarly colored inflammatory statements, how many of you remember hearing criticisms of Ibrahim’s statement? I read international news daily and while I come across dozens of stories about the U.S. rebuking Chavez I can’t recall a single story I encountered that criticized Ibrahim.

Why?

Libya has oil- lots of it – and they’ve been friendly to the desire of Western oil companies wishing to explore and develop in their country. Although Libya intelligence has cooperated with American intelligence in interrogating captives and providing information to capture terrorists, certainly another important impetus behind the restoration of diplomatic relation is undoubtedly the massive oil reserves that Libya possesses. Despite the fact that countries such as Nigeria are in the news far more frequently, Libya possesses the largest oil reserves of all African nations. And as soon as diplomatic relations were restored, every single major big oil company, American and European, was knocking on Libya’s door.

As you will know from my next blog entry which I will post in a day or two, after big oil finishes its current leg up, I much prefer shifting assets to auxiliary industries away from companies that directly explore and produce oil. However, investing in the right junior production companies will still be okay. One such company is the UK firm Soco International (Ticker: SIA.L on the London Stock Exchange).

Besides oil interests in Vietnam, Yemen, and Thailand, Soco International holds oil exploration interests in the Democratic Republic of Congo and in Libya in Africa. I purchased Soco International about four months ago because of the wildcards of the DRC and Libya. These are two countries that could potentially grant explosive growth to Soco in addition to its solid projects in Vietnam, Yemen and Thailand.

The DRC is transitioning into one of the more stable emerging nations after decades of corruption and volatile instability, and because of this, I like SOCO’s exposure to the DRC as well. Follow this link to read about elections in the Democratic Republic of Congo this week that a Reuter’s reporter called “the most important in Africa since a ballot in 1994 ended decades of apartheid repression in South Africa, the United Nations said on Saturday.”

I know that most people probably are unaware of the importance of the changing political and economic landscape in the DRC and the changing attitudes of the U.S. towards Libya, but as I said, my goal is to dig out opportunities that most likely will never make it to the mainstream media. I discovered both of these developments four months ago and as a result, invested in Soco.

However, realize that Soco is subject to more volatility and more geo-political risk because of its business strategy than blue chip oil companies and even other junior oil companies. However, there is also an “X” factor with this company that I have not discussed. I have reserved discussion of this “X” factor only for members of my SmartKnowledgeU™ e-learning site that we will hopefully launch within the next month. This “X” factor helps mitigate much risk when investing in companies similar to Soco, and also exists for companies of all sizes. For example, telecomm giant Verizon is another company that has this “X” factor that I also like. Many of you that know me know that I recommended buying Verizon about six months ago due to this “X” factor. And even though Verizon has had a good run recently, I believe that due to the “X” factor, that it would still be a good stock to purchase on dips in the future.

So again, my strategy in investing in Africa for now largely consists of finding companies that are invested in some of the African nations that have potential for explosive growth such as the DRC and Libya, but yet have a wide enough portfolio of business outside of Africa to mitigate these riskier opportunities.

P.S. By the way, Lula has just secured re-election in Brazil.

Technorati Tags: Soco International, oil stocks, best free stock picks, investment strategies, Libya, Thailand, Vietnam, politics and stocks

J.S. Kim is the founder and Managing Director of SmartKnowledgeU™, a comprehensive online investment course that uses novel, proprietary advanced wealth planning techniques and the long tail of investing to identify low-risk, high-reward investment opportunities that seek to yield high double-digit or greater annual returns.

The above question was posed to me by a reader about a week ago. I personally replied to him that I have been looking but haven’t yet identified any African companies that have a compelling enough risk/ reward setup for me. However,another way to gain exposure to emerging nations while limiting your downside risk is to invest in companies in developed countries that are investing in Africa. So I do hold several of these types of companies. I’ll be discussing one of them here on my blog next week.

Oh, I forgot it’s still Friday and that I promised all light-hearted entries every Friday, so click here to watch a fairly amusing YouTube video of “Free Hugs in Corea”, or click on the photo to the right to watch it (keep an eye out for the girl who walk towards the “free hug” guy in front of the Haagen Dazs ice cream store, only to be pulled away by her jealous boyfriend. It’s priceless.) Have a great weekend everyone.

To continue the topic of a prior blog, U.S. Secretary of Treasury Henry Paulson has been making waves by criticizing Africa for in his words “irresponsible borrowing” from India and China while various African nations have countered Paulson by stating that China’s and India’s investments in their countries is vital to eradicating poverty and improving standards of living. In an article in the September 16^th Economist, the following statement appeared: “In the cold war, Western strategists probably spent too much time worrying about the Soviet Union’s military clout, and not enough analysing its commercial frailties”. These oversights often happen not only in politics but in economics as well.

Paulson further suggested that the World Bank “implement effective incentives or penalties to deter irresponsible borrowing or lending,” implying that in addition to certain African nations that India and China should be punished as well for their recent multi-million and billion dollar investments in Africa. Apparently, these criticisms struck a deep nerve with many African nations. Again, they countered by claiming that past World Bank and IMF loans were so restrictive that they contributed to the difficult time they had rising out of poverty.

They claimed that the numerous lending conditions that have accompanied such loans, including privatization clauses that make it easier for outside corporations to enter their economies, and fiscal reforms that require them to slash programs that help the poor under repayment conditions. And these claims are not without merit. According to Oxfam International, 75% of World Bank loans that they studied in 20 developing countries required privatization contracts as conditions of these loans.

To the finance ministers of many of such emerging countries, such conditions are viewed with great wariness and suspicion as just another way for outside countries to exploit their economies under the guise of assistance. Apparently China and India’s loans do not come with such capitalistic lending conditions, and it is for these very reason that Africa is turning away from Europe and the U.S. for assistance and towards Asia instead.

Whereas Paulson criticizes the ongoing Chinese and Indian investment in Africa as dangerous and irresponsible, Kenya’s Finance Minister Amos Kimunya, hails the Chinese and Indian involvement in Africa, stating , “Ours is an equal partnership. The trade is two-way. It wasn’t like this” with other countries, he said, making a thinly veiled reference to the United States. And Kimunya is not alone in his sentiments. Nigeria’s Finance Minister Nenadi Usman supported Kimunya by stating, “We should look toward the East instead of looking toward the West because we believe we will benefit more from the relationship with countries like China and India. India and China will be more sympathetic to what we are going through now because they have been down that road themselves.” Actually these words are more true than Usman probably realizes. On sheer volume, China and India actually have more people living in poverty than Africa.

Despite these favorable comments by various African Finance Ministers, I am not without skepticism. If there is one constant in history, it is that of more powerful nations exploiting the resources of less powerful nations, and I am certain that India and China’s interest in Africa runs much deeper than the establishment of a “two-way” street. Perhaps’ Paulson’s ire stems from the possibility that India and China are replacing the U.S. and Europe as the colonialist plunderers of Africa in the new global economy. And if the U.S. and Europe are replaced in Africa, where next? And most likely, the business many Chinese and Indian firms are conducting in Africa is not on the straight and narrow path. In a recent BBC article, the anti-corruption group Transparency Intenational mentioned firms from China and India as being the most willing to pay bribes to do business overseas.

Although people may think I’m crazy for suggesting to start looking in Africa for investment opportunities, there is a reason that Africa is receiving an investment infusion of billions of dollars from China and India. Many countries in Africa have not seen the socio-political and economic stability that they are experiencing today in several decades. India’s and China’s loan’s and Paulson’s protests are as much an indication of the shifting of economic power from west to east as much as anything else.

Instead of trying to pull in the World Bank to police the economies of Africa, China and India, just as Western Strategists worried far too much about the Soviet Union’s faults versus correcting our own frailties during the Cold War, Paulson should do the same today. The U.S. economy is running on a currency, the U.S. dollar, that no one in the world desires any more, and whose debt is financed simply by printing more money because there are not enough tax dollars to support it. These are two serious problems that Paulson would better be served paying closer attention to rather than focusing on the investment strategies of China and India, no matter even if corruption exists. Corruption and bribery is so widespread as another form of business currency that it will never be stamped out.

For the sake of the global economy, the rest of the world would better be served as well if Paulson concentrated his efforts on fixing the domestic front in the U.S. before worrying about trying to fix the economies of the rest of the world. Earlier this year, Russian Finance Minister , Alexei Kudrin, openly questioned the ongoing viability of the U.S. dollar’s status as a reserve currency at a meeting of the World Bank and IMF. In fact, if U.S. Secretary of Treasury Hank Paulson does not focus on correcting economic problems at home first, his dismissal of these problems will only expedite the Peak Investment Crisis that is nearing the tipping point.

I’m going to pursue a slightly different tangent today and revisit your blog post entitled “Investment Lessons You Can Learn From Bin Laden.” Recently, a friend sent me an article to just the water crisis that you addressed in that blog entry. As you mentioned in your blog, this article also states that the crisis is beginning to affect not only the poor, but the middle-class as well. In certain regions in India, many of the middle-class must forage for clean water. It’s an interesting read, so I’m going to post the link here to the water crisis that is plaguing certain sections of India today.

Maholo, KAEHO.

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J.S. Kim is the Managing Director of SmartKnowledgeU, an online investment education course that utilizes groundbreaking investment strategies to uncover ignored stocks, asset classes, and global markets to identify the best low-risk, high-reward investment opportunities with the best chance of returning high double-digit and triple-digit gains.

Soon, Japan will see a changing of the guard. Last week,on September 30th, popular Japanese Prime Minister Junichiro Koizumi stepped down after 5 ½ years and will be replaced with 51-year-old Chief Cabinet Secretary Shinzo Abe. Though there are many positives about the Japanese economy now, their large, looming national debt is still very worrisome. Furthermore, with a largely untested politician in Shinzo Abe, a little caution is merited to see how Abe’s economic policies materialize and how the country reacts to Abe as its new leader.

Still the positives remain in the fact that Japan is a country emerging from a recession, and in the likely possibilities of a strengthening yen (which means concentrate on domestic companies rather than companies that primarily rely on exports). Furthermore, the Bank of Japan ended almost six years of 0% interest rates this past July, effectively ending what has been “free” money.

In essence countries all over the world borrowed massive amounts of “free” money, leveraging this 0% interest rate to buy other assets that paid higher interest rates. If the Bank of Japan continues to raise interest rates as their economy strengthens, the effect of an “unwinding” yen carry trade, particularly upon the U.S., could be enormous. How this scenario plays out is worth keeping an eye on.

In fact, other investment opportunities can easily be found by following the actions of emerging Asian economies. Right now, China is dumping enormous amounts of venture capital into Africa. Yes, Africa. Again, it pays to be ahead of the curve, not behind it. And China is doing exactly that. Africa has a few countries that are emerging with more stable governments and more advanced infrastructure than in the past twenty-five years. Time spent by digging deep down the rabbit hole to discover what China is investing in as well as assessing for yourself the best investment opportunities in Africa could very well pay some handsome returns over the next decade.

But back to Japan. Along with raising interest rates for the first time in six years this past July, the Bank of Japan has also been constricting the Yen monetary supply. In fact, PM Abe promised to cap the issuance of new Japanese treasury bonds for this year. All of these factors will boost the strength of the Yen and grant Japanese more purchasing power which should lead to a healthy recovery in the domestic Japanese markets in 2007 as long as Abe is diligent in balancing the huge national debt as promised. However, even if Japan does continue to recover in 2007, their recovery might not bode so well for other economies.

Well, today you were short and sweet J.S., so I will be as well. In fact, I don’t have much to say on the investment front today, so I’ll just recite an amazing story about loyalty, one of the highest attributes of human character and certainly one that is very “zen.”

The Story of Hachiko:

Eisaburo Ueno, a professor in the agriculture department at the University of Tokyo, was fond of his pure-bred Akita dog that he affectionately named Hachiko. Everyday, when Ueno returned from work, Hachiko would faithfully await his return at the Shibuya subway station exit in Tokyo. When Ueno died in May, 1925, Mrs. Ueno tried to give away the dog to several relatives that lived several miles from the Shibuya station. Hachiko. However, refused to stay at his new home, and instead, returned every day to the station to wait for him, and did so for the next eleven years. Eventually, a bronze statue of Hachiko was erected at Shibuya station as a symbol of Hachiko’s undying loyalty to his owner. Next time you are in Tokyo, make sure to pay a visit to the now famous statue of Hachiko!