Monday Randoms

First up is an interesting quote from the Asia Trader column in Barron's;

Kazakhstan plans to list a dozen of its mining and oil companies over the next two years on various Asian bourses, raising billions of dollars, says Kairat Kelimbetov, CEO of the Kazakh sovereign wealth fund, Samruk-Kazyna. "We want to list our companies in Asia rather than London or New York because our market is China," says Kelimbetov.

Kazakhstan and I would also say Mongolia have the potential to be very interesting investment destinations. They each have vast resources and many obstacles but both should become increasingly important to the world economic order.

Who knows whether the logic for seeking listings in Asia is the best thing for Kazakhstan--given the amount of investment capital in the US that I think will be looking to deploy into "new" countries it seems shortsighted--but it is not difficult to imagine that Asia will be more important fundamentally to Kazakhstan. I take this as a world getting flatter sort of comment. To the extent the world is getting flatter in this regard I take it as a tie in to US based investors gaining access to more and more parts of the world as time goes on.

Barry Ritholtz posted some recent comments from Felix Zulauf as follows;

He suggests a portfolio that is 20% in gold (he accurately predicted in 2009 that gold would hit $1,300 this year); 30% to 40% in mostly emerging-market equities; and the rest in three-year government bonds, denominated in such currencies as the Singapore dollar and the Swiss franc.

Other than the Sing dollar this is pretty easy to replicate with ETFs. I am aware of three gold bullion ETFs; iShares Gold Trust (IAU), ETFS Gold Trust (SGOL) and SPDR Gold Trust (GLD) which we own for clients. The Sprott Gold Trust is more of closed end fund.

In terms of the equity exposure he prefers, that term is useless but there are obviously many country funds that would tie in thematically to what he has in mind along with other specialized funds from GlobalX and Emerging Global Shares to name a couple.

Anyone looking to go heavy into country funds needs to be cognizant of the sector make ups of these funds. Funds covering places like Egypt, Poland and Singapore are very heavy in financial stocks while something like the iShares Peru Fund is very heavy in materials and other funds still are reasonably balanced like the iShares New Zealand Fund (ENZL). A combo of different types of funds can certainly get it done allowing for covering a lot of geographic ground, embedding different fundamental attributes and subtler things like managing volatility...all made even easier using a common stock to two as well.

As for debt from Singapore and Switzerland I continue to believe that this will be possible soon. We have already seen filings for regional bond funds and from there the funds should get narrower.

Every year around Halloween my wife and I endure something truly scary. It happens every year and even though we are pretty sure it is coming it scares the hell out of us anyway. Of course I am talking about our annual renewal notice for our health insurance. This year was a particularly aggressive price hike of 25%. Last year we upped our deductible to $7000 so that our premium would go down by about $9. This year we could up it to $10,000 to have it drop $8 per month or pay an extra $59 per month to have the same deductible.

This price hike is on the high side compared to past years but not the highest single one year increase. I'm sure there is a "reasonable" explanation for the huge increase and while thankfully the $59 increase is not a hardship, in the seven years I've been with this company we gone from $200 per month with a microscopic deductible to $275 and a big deductible. Where will it be in seven more years? We have no debt to service so we can withstand whatever might come but this will obviously not be true for a lot of people.

I have no societal solution here but it raises an important financial and retirement planning issues as increases in premium costs seems to be totally unpredictable far more so than various taxes we all pay, utility bills we all pay and any debt that people have. The only other thing I can think of that is an ongoing expense of sorts that is very difficult to plan for would be the various one-offs that come every month like new tires, unexpected dental events, vet bills, house repairs and so on. This is yet another reason why retirement planning is very complicated. The best answer I can come up with is save more and live below your means. If world markets go up a lot in the next 15 years, or whatever time frame you care about, then your portfolio should go up a lot too but if world markets do not go up a lot then saving and spending become even more important.