Beartooth Higher

For several weeks now I have been blogging about my belief that we started a bear market. At this point it is too soon for the call to be correct or incorrect although last week's action is a bit of supporting evidence to the argument, which again could turn out to be wrong.

As a tie in to a long running theme the US has become increasing less attractive as an investment destination and because of this, I have written extensively about foreign investing and implemented a lot of foreign exposure in client accounts. The idea of foreign investing is popular in many circles but at times like now there are often complaints about foreign not offering protection when correlations go to 1.00 in the face of some sort of downward move.

It is worth remembering that during the event, most things will go down. For someone only able to focus on a few weeks or a couple of months then foreign may not offer any solace or shelter. But when zooming out a little it should be clear to anyone able to focus on a suitable (for them) time horizon where the value becomes obvious.

Taking Chile as an example. I've been writing about this one for many years now. For about as far back as Yahoo Finance goes the IPSA is up about 200% since late 2003 compared to about 2% (not including dividends) for the S&P 500. During the panics, Chile as gone down plenty, the country has endured a bad earthquake and other occasional bumps in the road but has continued to work its way upward in a sometimes sawtooth manner. A 200% lift is obviously very good at the index level for that number of years.

If the US is indeed Japan (it is different than Japan) or is Greece (it is different than Greece) or anywhere else that is not good, there will be countries that (repeat theme coming) have normal or better than normal stock market results over the long term. You can decide for yourself whether Chile will continue to be one of them but seeking out these countries will give you a very good chance at "normal" equity returns.

We are leaving Wyoming today and may never come back, at least not to Yellowstone. We had such phenomenal luck with the animals we saw that it is unlikely we could ever do so well again in the future. Part of our good fortune came from a buffalo carcass in the river in Hayden Valley. The bears kept coming back to it. Saturday night we saw a male grizzly chase away a female with two cubs. The next morning we went right back out and saw the same grizzly working on the carcass while at the same time fending off two wolves. The wolves did get some meat though.

Earlier in the week we gave a ride to Rick McIntyre who is a very famous wolf expert and a ranger in the park. He hopped in and said "you will see the wolf." The pictures we took zoom up so close you can see the rodent in its mouth. More pictures of all of this to come when we get back. For people interested in animals this is neat and for those not interested, thanks for indulging me.