The “barbarians” at the time of the fall of Rome (or at least those who attracted the productive class of Romans at the time) were an assortment of tribes living largely to the north of the empire and even within the empire. They were not taken very seriously by Rome, as they were seen much as we today see the Third World – as something less than important – less developed and less sophisticated.
However, the barbarians had a strength and that was that their rule had not evolved into top-heavy oligarchies, a fact that made them desirable for those businessmen seeking to escape the oppressive governmental interference in Rome.
The barbarians of today are the second- and third- worlds. The first world is essentially North America and Europe. The second world is generally characterised as Russia and China – the “communist bloc” of the sixties. The third world, generally speaking, is everything that is left over. (These are not exact dictionary definitions; they are good practical, working definitions.)
So that's who they are. As to whether we should invest there, the answer, in my opinion, is a decided “Yes!” They represent the future. Most certainly, the BRIC countries (Brazil, Russia, India and China) are very much on the rise. However, so are many other countries that are not so much in the limelight, yet are of great interest in terms of investment.
At this point, it would be nice to wave the magic wand over a few choice third-world countries and say, “Invest here.” However, selecting countries for investment means that we need to roll up our sleeves and do the requisite homework. For this homework, at a minimum, I would subscribe to the following:
* HSL (Harry Schultz Letter)
* Aden Report
* Jim Sinclair’s Mineset
And regularly check on the internet for articles by and interviews with the following:
* Lew Rockwell
* Jim Rogers
* Bob Chapman
* Marc Faber
Again, this is just bare bones, but together, they will provide a cross-section of very reliable information. Each will provide a somewhat different take on present developments and possible outcomes with regard to investment. If you have not already pursued the above, please do so as soon as possible. Time’s a-wastin’. The Great Unraveling (as I term it) of the First World has begun and the sooner you move your wealth (whether it be great or small) to safe havens, the more secure you and your family will be as the collapse of the First World unfolds.
Frequently, when I am asked questions similar to Dave’s, I am also asked, “Are there any basic guidelines you follow for investment?” Yes, there are many and they are often involved and confusing, even to me. But here’s a few basics that should help any investor:
Stick to what you're good at
I am a slow thinker; therefore I do not follow the dailies in the stock market. I am better at general trends, so buy / sell / buy / sell simply doesn’t work for me. This means that I am right now out of the market, as it is too volatile for my thought processes. However, for someone with a very fast brain, who can juggle large amounts of detail, the market may be a good thing right now. Either way, gear your investment pursuits to your talents.
Seek out investments that make sense to you
If you have a background in a given type of investment, you already have an edge. If you are a geologist, you may be a natural as an investor in mining. You may also educate yourself in new investment interests, but if the mind boggles in one area, move on to something else that you have a natural talent for.
The more conservative you are, the more you should generalise your picks
If you can afford to be a wildcatter, go ahead, have fun. But if you are shooting for some predictability and security, limit your risk by covering a broader field. For example, in the coming decades agriculture is ripe for growth. So, do you buy a wheat farm in Saskatchewan? That might work out just fine, but Saskatchewan may have a summer drought, followed by the worst winter in decades. Do you buy shares in XYZ frozen vegetables? XYZ may be suffering from mismanagement and crippling debt. To broaden your field, you may instead invest in Caterpillar, which will cover you no matter where in the world agriculture is successful. For the same reason, you may invest in fertilizers. Wildcat investments sometimes win very big, but more often they lose very big. The returns from generalization are generally lower, but more likely.
Keep current of political, social and economic developments
This you may already be doing, but many investors keep this pursuit independent of their investments. However, if you are considering a choice between, say, a gold mine in Zimbabwe and one in Canada, you will want to consider the stability of the political rule in each country (would they suddenly heap on heavy taxes or legal limitations; would they suddenly confiscate assets?), whether they are growing towards insurrection, whether their economic structure is unstable? A present high-return from the Zimbabwe mine may not in the end be as fruitful as the lesser return from the Canadian mine.
Look for countries that have a great future in general
Stay away from countries that are in decline. Focus on those that are either on the rise or, better, those that have great promise and are on the cusp of unfolding. As an example, not much is going on right now in Paraguay, but if you are, say, 40 years old or younger, you will be in the middle of your investment career when this blossom of a country fully unfolds and you will have the opportunity to enjoy years of positive returns.
It’s fine to be trading short-term (if you’re good at it), but, to think short-term means to win today and lose tomorrow. Regardless of how fast you choose to trade, your eye should always be looking five and ten years out and further. The investment world is full of wiz-kids who hop on a trend for several years and look brilliant as a result, then flame out after the cycle for that investment has ended. Always educate yourself on the likely lifespan of any investment.
As your portfolio and the amount of money you have invested in a given country’s future grows, you will want to plan a working vacation there. Make it fun to do, but give yourself a programme of work during your stay. Nothing will give you greater insight into investment into “the barbarians” than time spent on the ground.