Iran has given a firm commitment to cooperate with a U.N. nuclear watchdog investigation into suspected atomic bomb research, the head of the agency said after what he described as a “useful” visit to Tehran on Sunday.

The sanctions on Iran have largely crippled its oil exportation and caused hardship on its population. This could be a good example of so-called blood-in-the-streets investing. Iran has great resources and an educated population.

Foreign Direct Investment

Foreign direct investment in Iran could be lucrative if the nuclear standoff is finally resolved.

Foreign direct investment is done by folks with lots of money, the intention to stay the course and the intent to make a profit. If you are looking for offshore investment ideas, take a look at where foreign direct investment goes year after year after year.

For a snapshot of where foreign direct investment is going today talk a look at the foreign direct investment article.

Invest in Iran

Providing that the nuclear development standoff is resolved, what does Iran have to offer an investor? According to the CIA World Factbook, Iran has the fourth largest proven oil reserves in the world, at 154.6 billion barrels.

Iran

Crude oil – production:

3.594 million bbl/day (2012 est.)
country comparison to the world: 6

Crude oil – exports:

2.445 million bbl/day (2011 est.)
country comparison to the world: 3

Crude oil – imports:

15,600 bbl/day (2010 est.)
country comparison to the world: 71

Crude oil – proved reserves:

154.6 billion bbl (1 January 2013 est.)
country comparison to the world: 4

Iran has been dealing with shortages of even the basics as the sanctions levied by Western powers have taken hold. They are basically unable to sell their oil abroad and are running short of hard currency reserves. This will be quickly remedied if they come to an agreement to open up their nuclear program to inspection. The cash from a viable oil export program will pay for development in industries and businesses across the board.

Iranian President Hassan Rouhani

Things have changed with Iran ever since the country elected a new president. Hassan Rouhani has taken a more moderate approach in dealing with the West. It has been since his election that talks with the six major powers have advanced. According to the head of the U.N. inspection team Iran has agreed verbally to implementation of the so-called framework for cooperation between Iran and the International Atomic Energy Commission. Basically this has to do with proving that Iran is not using its nuclear enrichment program to develop nuclear weapons. Those who wish to invest in Iran as it sees sanctions lifted will want to watch the progress of further talks which are scheduled to resume in November of 2014. And they will want to follow the drama in Iran between religious hardliners and those who want to take a more businesslike approach to dealing with the rest of the world.

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From this website, you can access the Productive Investment Opportunities Database (BaPIP, for its acronym in Spanish), a vital tool designed to connect potential investors worldwide with the wealth of investment opportunities existing in Argentina.

On this site you can pick a sector such as agribusiness, a subsector such as stock breeding and a province such as Pampas to start to invest in Argentina.

Positive Reasons to Invest in Argentina

If you want to invest in Argentina what are the advantages and disadvantages? The economy of Argentina is in trouble and foreign capital will be welcome. And the Argentine Peso has weakened so that things are cheaper there if you bring Dollars, Yen or Euros. Google Finance shows a chart of the ARS versus the USD, the Argentine peso versus the US dollar.

Ten years ago an ARS was worth 35 cents and four years ago it was worth 25 cents. It passed the 20 cent mark at the end of 2012 and the 15 cent market at the end of 2013. As of this writing 1 ARS is equal to 12 cents. A positive reason to invest in Argentina is the weakening Argentine peso. Argentina has rich natural resources. According to The World Factbook, published by the United States Central Intelligence Agency:

Argentina benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector, and a diversified industrial base. Although one of the world’s wealthiest countries 100 years ago, Argentina suffered during most of the 20th century from recurring economic crises, persistent fiscal and current account deficits, high inflation, mounting external debt, and capital flight. A severe depression, growing public and external indebtedness, and an unprecedented bank run culminated in 2001 in the most serious economic, social, and political crisis in the country’s turbulent history.

A combination of a rich natural resource base and cheap investments could make it promising to invest in Argentina.

Risks of Investing in Argentina

A look at the history of Argentine currencies over the last forty years or so shows why one does not want to retain earnings from Argentina in an Argentine currency. Since 1969 Argentina has gone through several currencies and essentially added nine zeros after the decimal point. This is to say there has been trillion-fold devaluation of the Argentine currency in forty-five years. And Argentina has had the tendency to nationalize foreign industries such as when they nationalized YPF, which was owned by Repsol of Spain. This was shortly after YPF discovered the fourth-largest reserves of shale oil and second-largest of shale gas in the world in the Vaca Muerta field in Neuquén province. Chevron has cut a sweetheart deal to start developing this find as the cost of developing the entire basin will be in the $60 billion range and Argentina will have trouble borrowing from foreign sources due to its history of debt default.

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What Happened to Brazil?

China is what happened to Brazil and the recession is what happened to Brazil. Much of Brazilian economic growth came from exports or raw materials, largely to China. When the recession hit and reduced finished goods orders from North America and Europe China reduced orders for raw materials from across the world. As the Chinese look inward and concern themselves with growth and social stability, Brazil has fewer raw material orders to fill and its economy is in a slump. Even in this scenario Eike Batista is an outlier. The man is a consummate deal maker and promoter. He built upon early success and convinced big investors that his success was exponential. He has his hand in port facilities, mining interests, oil (the current bankruptcy filing), shipyards, and an entertainment company. All of these interests have been cut back and have lost share price. Although Batista has lost $30 Billion as stocks have fallen, his shareholders have lost as much or more. American investors are angry and want blood. So Batista has sought bankruptcy protection. He will likely get sixty days to come up with a reorganization and payment plan. His creditors will have a month to accept or reject. Someone in this Brazilian bankruptcy is going to lose a lot of money. Investing promised phenomenal growth has turned into a matter of investing in risky stocks. Considering that economies do come back it may be best to wait until Mr. Batista’s companies bottom out and then look to invest as in the Blood in the Streets scenario of Mr. Rothschild so long ago.

Investing Tips Regarding the Brazilian Bankruptcy

Timing can be everything in situations such as the Brazilian bankruptcy of OGX Petroleo e Gas Participacoes. The stock trades as an ADR for around six cents a share and was $2.35 a share a year ago. Before the 2008 market crash the stock sold for over $200 a share. That fact may make those who invest in penny stocks perk up and consider a low cost long term investment.

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The Connection between an Information Society and Economic Success

China is a great example of how electronic communications have helped economic success. Supply chains begin in China and stretch across the world. Retailers in North America computerize their re-ordering. Every purchase at Target or Wal-Mart goes to a satellite and down to headquarters. When the computer software decides that it is time to order more or an item the information goes to the factory in China in seconds. Much of China’s economic success has come from entering the electronic information age. However, Chinese growth and social stability are also linked to electronic communications and fast access to information.

The Connection between and Information Society and Social Unrest

We have just seen street demonstrations lead to the overthrow of the second government in just two years in Egypt. Much of the information that led to civil unrest came from internet telecommunications. The same internet backbone that helps industry keep up in the modern world puts governments a risk. While many in Egypt were unhappy with an increasingly Islamic government many were simply unhappy that the most recent government was not generating more jobs. Now think of Chinese growth and social unrest. The Chinese have come to expect as steadily expanding economy and relatively high employment. An underlying concern for a one party government is to keep people sufficiently happy that they will not start looking for an alternative. In the case of China it would not be a matter of the Republicans throwing out the Democrats but rather a more substantial change in who governs and how.

Investing in the Face of Decreased Chinese Growth and Social stability or Instability

What is reasonable investment advice regarding slower growth in China? It is unlikely that Chinese rulers will let things slide so badly that they risk a government overthrow. They need to deal with an overbuilt high end real estate sector and a raft of unsupported loans. The government is driving interest rates up and intentionally slowing the economy. They are also hoping to stimulate local small businesses as well as home based consumption. This is probably not the time for large investments in China but it may well be time to look at what businesses in China or doing business with China provide infrastructure support to the small business sector.

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Stimulus in China

China has used economic stimulus by the government to support its lagging manufacturing sector over the last few years since the onset of the 2008 recession. Interest rates have been kept low and the government has poured money into infrastructure projects. Chinese economists predict a rise in economic growth into the eight percent range. An optimistic read of the situation is that China specifically and Asia as a whole are in the recovery phase of a traditional recession. If fundamental analysis of the Chinese manufacturing increase is consistent with a routine economic cycle it could well be time to buy Chinese manufacturing stocks. As with the USA and Europe, investors are well advised to watch what happens as government stimulus tapers off and the Chinese manufacturing sector must grow on its own.

Bull or Bear on Chinese Stocks

Despite a generally favorable response to the announced Chinese manufacturing increase, the composite index of stocks fell on the Shanghai market. This may be a matter of buying on anticipation and selling on the news. Over the long term a major issue for China is the ability of the world to buy more and more Chinese products. Europe had been China’s number one customer. Now, as the Euro Zone lingers in debt and recession Chinese industry needs to look elsewhere for customers. Raw materials are always a concern for a growing industrialized economy. As China extends it political as well as its economic clout, it hopes to secure customer bases as well as access to raw materials. However, as the USA found out over the years, being perceived as the country with all of the power and money puts a nation in a different light. The political as well as economic cost of buying favors and getting access to raw materials as well as markets can become costly and become a burden on those at home. If you are investing in foreign stocks, Chinese stocks certainly deserve a look. But, remember Japan at the end of the 1980’s. The nation seemed to be set to take over the world. Then a set of handshake, good old boy, loans was disclosed and the Japanese economy went flat line for over a decade. China is still not a transparent society. The apparent Chinese manufacturing increase sounds good but just how good is the data? Investors in China are advised to constantly do their homework and check their results.

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Investing in Mexico via Mexican Stocks

One can buy stocks on the Bolsa Mexicana de Valores, BMV, the Mexican stock market. It is the only Mexican stock exchange and is located in the capital, Mexico City. The stocks listed have a total capitalization in excess of $400 Billion calculated in US dollars although stocks are denominated in and traded in Mexican pesos. The BMV is second to Bovespa, the Brazilian exchange, in Latin America in size. Here are a few representative listings of our first of three good ways to invest in Mexico:

• América Móvil: Telecom
• Cemex: Cement
• FEMSA: Conglomerate
• Alfa: Conglomerate
• Grupo Aeroportuario del Pacifico: Airports
• Grupo Bimbo: Food
• Grupo Modelo: Beverage
• Grupo Financiero Santander: Retail and Private Banking
• TV Azteca: Television, Media
• Televisa: Television, Media
• Telmex: Telecom
• Walmex: Retail

Mexican Stocks as ADR’s

For many American investors it is probably easier to look for Mexican stocks listed as American Depository Receipts (ADR’s) on US stock exchanges. There are currently 89 Mexican companies available as ADR’s. These stocks represent a wide range of industries and investment opportunities. Although there are many US companies that do business in Mexico, the portion of their total business may be small. So as not to dilute the Mexican part of the investment opportunity, the second of our three good ways to invest in Mexico is to stick with Mexican companies but those listed as ADR’s. These stocks commonly need to provide the same level of information that American stocks do for the NASDAQ or NYSE. This provides the investor with a sound basis for fundamental analysis when choosing foreign stocks.

Investing and Doing Business Directly in Mexico

An American investor can do business in Mexico. He or she can own property. However, the job is easier if the investor speaks Spanish and has a good sense of the local business culture. Many investors choose the property route simply because they can buy, give the work to a property management company, and collect rental payments while devoting their time to walking on the beach. This may well be the best of our three good ways to invest in Mexico if you are set to retire. Read Foreign Real Estate Investments for more insights.

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