One of the reasons I spend a lot of time in New Zealand when having grown up in South Africa, apart from the breathtaking beauty and unbelievable lifestyle, is that South Africa completely blows New Zealand away when it comes to crime (pun intended).
Crime clogs the economic pipelines of the country like the fat in Jonah Hill’s arteries and yet commerce still takes place. Humans are incredibly adaptive. That said, the leverage that comes with a reduction in crime is truly astounding.
Crime at its worst is called war and when wars cease the concurrent economic growth is typically very attractive. We’ve visited countries coming out of long standing wars where the rate of growth has subsequently surged. Last year we hosted a Seraph event in Sri Lanka, a country that came out of a brutal 25-year-long civil war. We put together a comprehensive report on the country which you can read here. Sri Lanka is not the only example, though.
In August, Mohnish Pabrai took part in Brown University's Value Investing Speaker Series, answering a series of questions from students. Q3 2021 hedge fund letters, conferences and more One of the topics he covered was the issue of finding cheap equities, a process the value investor has plenty of experience with. Cheap Stocks In the Read More
Mongolia, a country I spoke about recently, experienced rapid growth on the back of some major commodity finds and the returns had have been reflected in the publicly listed stocks on the MSE.
Colombia is another country on our radar. It has an awesome reputation! Unfortunately, it’s a reputation for murder, kidnapping, and general mayhem. Pablo Escobar, whose arteries incidentally likely resembled that of Jonah’s, managed to turn Medellin into a battlefield that no sane person would have willingly spent time on. We like opportunities where the zeitgeist doesn’t reflect the underlying fundamentals. This is typically where value is to be found.
I’ve been asked how safe is Colombia.
Well, let’s look at some of the facts:
I grew up in South Africa, a country many people don’t think twice about visiting either for business purposes or vacations. And I’m 19 times more likely to be assaulted in South Africa than in Colombia. In fact, if you live in Washington DC you’re currently enjoying a higher murder rate than that the average Colombian!
Now I’m not particularly interested in living in either South Africa or Washington DC. What I’m more interested in, though, is not some place to live but in the trend in motion, and where to place investment capital for superior returns.
It is for this reason that we are basing a trusted team member of our organisation there. Flying in to any country for a week or two will typically just land you in trouble. You’ll likely know enough to be a danger to yourself having had insufficient time to sort the wheat from the chaff and get a decent lay of the land. We’re excited to see what we can find though real estate is likely to feature fairly highly on our list.
Below are 4 facts that you may not have known regarding Colombia:
- Colombia is estimated to be the second largest economy in South America, right behind Brazil;
- Colombia has a vibrant banking system, which surpasses many of its regional peers;
- Colombia has struck free trade agreements with United States, South Korea, Canada, Switzerland, Norway, Iceland, Lichtenstein, the EU, Mexico, Chile, Guatemala, Honduras and El Salvador;
- The country has a thriving banking sector which is fast becoming the predominant banking jurisdiction in South America.
..and we’re certainly looking forward to finding out a whole lot more.
“I’m a decent man who exports flowers.” – Pablo Escobar
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