An Investment Mindset…Do You Have It?

 

The best thing my parents ever did for me was to introduce me to traveling at a young age.

When I was 13 years old, I spent three weeks in the UK and Europe with my 8th grade French class traveling from London through France, on to Monaco, and ending up in Italy. I only knew five words in French,

“Je ne parle pas Francais” (I don’t speak French).

It turns out everyone in the world can figure out what I am pointing at on a menu and I learned that I could travel anywhere.

I was hooked on traveling. I have lived in five countries outside the US (Hong Kong, Singapore, Australia, India and Switzerland) and have visited 48.

Some adventures were with my family, like the Christmas we spent in Egypt the year after 79 Swiss tourists were gunned down by a crazy, gun-toting extremist. You can see me below in front of my favorite pyramids in all of Egypt, the "Bent Pyramid" built 4,600 years ago!

My dad had a knack for finding the coolest, least traveled places to vacation. We seemed to often go to places a year or two after revolutions of some type. The upside was that we were treated like kings.

But most of my traveling was solo, discovering that Planet Earth has many different types of people, cultures, religions and beliefs. I learned there is no ‘right way’, but hundreds or thousands of ‘right ways’.

You quickly learn that your own town, state and country are just that… small parts of a very big puzzle.

So why am I talking with you about traveling in an investment letter? You see, I did a lot of my world traveling between the ages of 12 to 27.

This is key: While my brain was being formed, while my beliefs about the world were being formed, I was traveling the world. What a gift my parents gave.
One of the most important mindsets I use for growing money is the one I call the “investment perspective.”

I don’t believe the USA is the center of the planet. I don’t believe that the world should think like Americans think. In fact, sometimes USA Inc. does some pretty stupid things. I’m sure you could think of a dozen or so yourself if I gave you a second or two.

So when I shepherded my Investment Peer Group out of real estate (in 2006), or into gold/silver (in 2004 til today), I’m taking the point of view of the world’s investments and not just America’s investments.

I can’t over-emphasize how important this is for investors today. Perhaps during the golden age of USA Inc. (1971 to 2008), a US-based investor didn’t need to have this point of view.

But ever since Ben Bernanke, Hank Paulson and Timmy Geithner, et al. decided to devalue the US Dollar, the world has changed.

The world of investing has changed.

All investors today need to think more like a citizen of the world and less like a citizen of America or Europe, or even China or Brazil.

The question I ask myself the most is: “Where is my money treated best in the world?”

And today, that answer is three places:

1) Gold and Silver

Yes, even with the correction that has taken place recently, and continues to unfold, the smart money has continued buying. The world is getting out of US Dollars and, in many parts of the world, they are also getting out of their local currency. Take notice, dear investor, as this is the new normal. The masses that are awake are noticing what their governments are doing, and they are protecting themselves the same way their ancestors did. And so should you.

Buy a little bit of gold and silver each month for the next five years.

2) Health Care and Biotech

My OT Model Portfolio is quietly growing each month with health, biotech, and medical companies. As the world’s population ages, people in the richest countries are going to want and need a high level of medical care.

Just in my little Silicon Valley town of Redwood City, there are three new hospitals being built within two miles of my house. And there are dozens of biotech companies scattered all over the Valley and the Bay Area creating “better health” for us.

I believe a sleeping giant has awoken, and for the next decade we are going to see advances in medicine and biotech that were only dreamed of twenty years ago.

The future is here for medicine technology, and the smart money is getting richer and smarter.

3) Technology

It is what helps other companies lower their overhead and increase their revenue without hiring people. Look at Apple. For every one person they employ in the US, they have ten working in China.

I’ve talked about this before in my monthly Investor's Elite meetings: Corporate America does not need Americans any more to grow their companies. The Corporate World’s only focus is on profit and shareholder value.

In fact it is so bad, that when Vikram Pandit, the CEO of Citibank, was asked who his customer is, he said his shareholder. That should be a warning to anyone who thinks they are the customer of Citibank just because they happen to be a “customer” of Citibank.

When an investor is able to step outside of the matrix they live in and look objectively from a global point of view, they are able to notice – almost immediately – where money is flowing.

Then they are able to protect and grow their money in any climate. Because they have the entire planet to choose from… they have perspective.

Take, Ireland.

Most people would run from anything Irish. After all, their country is quickly imploding into a multi-decade long death spiral of debt and deficits.

Not me.

In my travels around the world, I’ve seen many countries where the economy is not doing well but certain niches or companies are. In fact, the worse the economy gets, the better some of these niches seem to get.

So this got me thinking…are there niches in Ireland that have biotech or medicine or technology or gold/silver, for that matter, that perhaps the investment world is not looking at because they do not have “investment perspective?”

And my answer was YES!

Take a look at this Irish company, Shire Pharma Group (Shire), ticker symbol SHPGY.

Shire is a bio-pharmaceutical company employing about 1800 people with sales of $3.6 billion and a market cap of $18 billion. They operate in 25 countries and sell their products in 50. Their profit margins are 18%, with total profits of $630 million last year. Not bad.

Should we overlook them just because they are Irish? Most conventional investment advisers in the US would. And that is because they do not have “investment perspective.”

And I think that is a mistake.

In fact, I never hear conventional advisers speak about companies like Shire.

Take a look at Shire’s price compared to the S&P500 over the past 17 months. In the image below, the blue line shows Shire up over 60% since January 2010 (when I added it to one of my Investment Peer Groups’ model portfolios that I call The OT Model Portfolio).

The red line shows that American Stock Index, called the S&P500, up 18% during the same time period.

So here you have an Irish company besting the S&P500 by 300% and no American financial pundit is talking about it. Great!

Shire Pharma Group vs S&P500

So if you are noticing your investments only contain what I call off-the-shelf investments, perhaps it’s time you notice what your own "investment perspective" is.

We do this every month in my personal Investment Peer Group called Investor's Elite. For the past ten years our model portfolios have been growing 14% to 20% compounded annually.

Compare this to the 1% compounded annual growth of the S&P500 and you immediately understand the value of being part of an Investment Peer Group that thinks ahead of the crowd.

If you are curious about what it is like to be in an Investment Peer Group that started buying gold and silver in 2004, or started buying biotech companies at the beginning of 2010, or is simply capable of having an open conversation about what is best for your money, then you may find yourself being curious. Click here to learn more.

Together, we are growing and protecting your wealth.

RC Peck

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