Skousen Investor CAFE: The Road to Morocco Leads to Investing Ideas for the Emerging Markets

By tcane

I just returned from a trip to Morocco for the first time where I met fellow economists and I tried to procure investing ideas to share with you about emerging markets. The visit marked the 72nd country that I have set foot upon in my well-traveled career.

As you may recall from my e-letter last week, I decided to take my wife Jo Ann there to celebrate our 39th anniversary while in Morocco to attend the Mont Pelerin Society meetings. Well, the time with Jo Ann and with other economists at the meetings was personally and professionally rewarding.

I visited Casablanca, Morocco, a city now inhabited by 6 million people. Unfortunately, the city does not live up to the exotic film of the same name. The city is dirty, full of slums, and very Third World. But Rick’s Cafe, built by an American six years ago, is where I took my wife for our anniversary and it was fabulous. Fez, the country’s ancient capital, is clean, features rolling hills and is more beautiful than Casablanca.

Of all the Arab and North African countries, Morocco has real potential to grow economically and have more direct links to Europe and the Western world. I’m optimistic about the country’s future. I had a chance to teach about the dangers of Keynesian economics to 200 students at the major university in Fez, and the new generation there is upbeat and entrepreneurial.

It astounds me that so many world leaders today seem to be ill-informed about Keynesian economics. Keynesians focus on consumption, government spending and the role of institutions, rather than limiting the role of government to let the private sector enjoy the benefits of a free market that rewards reasonable risk taking by allowing entrepreneurs to reap profits without excess taxation. With the United States, Greece, Spain, Italy and many other countries running huge deficits annually, at least 10 countries in Europe are mired in recession and the economies elsewhere generally either are weak or slowing down.

With many developed nations around the world weighed down by debt and out-of-control spending on social programs, the emerging markets may offer an attractive place for investors who can handle additional risk to put a small portion of their money in pursuit of heightened returns. The volatility of emerging markets needs to be acceptable to any investor before he or she invests in companies tied to such growth-oriented markets.

I try to visit emerging markets, such as Morocco, for myself to see what is happening and understand first-hand the conditions in each locale. A key reason for my travel is to gain insights to aid me in recommending stocks and funds to subscribers of my monthly investment newsletter, Forecasts & Strategies, as well as my three weekly trading services, Hot Commodities Alert, Hedge Fund Trader and Skousen High-Income Alert.

Special TV appearance: I’ll be appearing this Friday evening, April 27, on the PBS’s “Nightly Business Report,” where I will be interviewed by host Tom Hudson about the market outlook and my favorite stocks. My last three picks (made on November 4, 2011) are up an average 20%, including dividends. (The market average was 12% during this time). I’ll have some new recommendations on Friday. Check local listings; the “Nightly Business Report” usually begins at 6:30 pm Eastern time.

“You Blew It!” — NBA Player Ron Artest Comes out against World Peace

Ron Artest, a basketball player for the Los Angeles Lakers known for his violent past, thought he could play a joke on the media by changing his name to “Metta World Peace. “However, in last Sunday’s game, he threw a vicious elbow at an Oklahoma City player and got a seven-day suspension.

So, I have two “You Blew It!” callouts to make. The first goes to Ron Artest for changing his name. I also think the media “blew it” for catering to him and adopting his new name. The media, always is overly sensitive and respectful to any athlete changing his name (witness Cassius Clay to Mohammad Ali, and Lew Alcindor to Kareem Abdul-Jabbar). What a joke to read the following ESPN story continuing to use his phony name after his violent attack. I pray the Lakers lose in the first round so we don’t have to keep hearing the announcers use his fake name. They should use the term “sic” after it is used each time, as I have done below.

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 World Peace [sic] Punished for Violent Hit

EL SEGUNDO, Calif. — The NBA responded to Metta World Peace [sic]’s latest act of aggression with a seven-game suspension that will lighten the Los Angeles Lakers troublemaker’s wallet and playoff schedule.

World Peace [sic] was suspended Tuesday for throwing a vicious elbow at Oklahoma City’s James Harden, keeping the Lakers’ starting small forward sidelined for most of the first postseason round.

World Peace [sic] was ejected from Sunday’s game against the Thunder for striking Harden in the head with the back of his elbow, giving Oklahoma City’s top reserve a concussion. The former Ron Artest claimed the blow was an accidental, overzealous celebration of a dunk, yet even Kobe Bryant and his Lakers teammates weren’t defending his inexplicable actions.

To read the full story, you can click here. I cannot condone such violence, especially in a game, and this particular athlete has a history of unsportsmanlike behavior. You may remember when he ran into the stands during a basketball game against the Detroit Pistons in 2004 to confront a fan. The episode quickly turned into a melee. This athlete is not a suitable role model for anyone.

Yours for peace, prosperity, and liberty, AEIOU,

Mark Skousen, Ph.D.
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You'll also receive Dr. Mark Skousen's weekly e-letter, Investor CAFE, at no cost, along with other associated financial content and special offers.

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