. . . In the winter, the waves in San Diego can reach 8 to 10 feet in height and it is extremely difficult to row the boat through the waves, unless everyone digs. Each oar must be synchronized with the Coxswain hit count.
Everyone must make the same effort or the boat will turn against the wave and be thrown to the beach without ceremonies.
In order for the ship to reach its destination, everyone must row. You cannot change the world alone, you will need help, and to really get from your starting point to your destination, you need friends; colleagues the goodwill of strangers; and a strong Coxswain to guide them. If you really want to change the world, make sure you find someone to help you row. . .
– Admiral William H. Mcraven
Sometimes it is impossible to see clearly what is happening, especially in this world of news and social networks 24 hours. No one can escape.
I am a currency dealer. My work revolves around shaping and constantly reforming my views as the news changes. To survive, in my world, I must be aware of the news and general opinion to help my clients make decisions. Simply put, no matter what is happening, my job is to make sense of what is happening to answer the question: What the hell is going on?
For this reason, I don't like surprises (or at least, the wrong kind of surprises!)
In my world, surprises cost money and make customers angry, which is really the same. When the predictions of data that affect the market (for example, inflation, GDP growth, interest rates, etc.) are incorrect, which sometimes they are, the exchange rates move contrary to what the market expected. market. For this reason, I like to take a few minutes each day to consider the opposite view. Markets often follow patterns (technical analysis), and historically, when A has happened, X would follow (fundamental analysis). Now, just because A is happening today, does not mean that X will continue because this time there may be B and C to consider; and when they are taken in full A, B and C could lead to a result of Z. Then, I often wonder: "What could I be missing?". . . “What would happen to a particular currency if such and such a forecast came out better or worse than expected? . . . What would happen if a certain assumption were wrong?
So, the objective of this series of articles is to take a look at the global economy and some snapshots of specific economies, to delve into a little history; and use their observations as an objective and rational basis for making raw decisions. The purpose of all this is to come up with an unusual idea: to form a contrary vision, if you like.
The world economy is in danger due to trade wars, tensions between the US. UU. And Iran and the risks of Brexit that threaten both the UK and EU economies. All major stock markets are in a tail turn. Performance curves in the United Kingdom and the United States have reversed, suggesting that a global recession could be imminent. The British and German economies, powers that have been powerful engines for European economic growth over the past decades, are shrinking. The latest quarterly GDP figures for the two countries, published less than a week ago, show a negative growth of -0.2%. If that is repeated in the next quarter, both economies would be in a technical recession. Many of us, like it or not, could be about to lose the shirts on our backs.
It is true that economies always recover and things will finally be fine again. However, in my opinion, because the risk is everywhere, if I am going to take a risk, I prefer to take it to where the yield, if it comes, will be enormous. Or, at least, if I am rebalancing or diversifying my portfolio in an environment with stormy clouds on the horizon; then it is worth considering the possible returns of all available risk options.
From my point of view, some incredible opportunities are found in emerging and border markets. Zimbabwe is a border market. It is very risky. Unfortunately, at this time, the United Kingdom is also extremely risky due to the current fears of a hard Brexit. It is impossible to predict whether that will materialize or not due to the peculiar nature of this bubbling pot that is Brexit. Its ingredients include a drizzle of incompetence; a generous portion of farce and a pinch of xenophobia. It will be served, if it is ever served, in a bed of cold lies; Several months later Interestingly, the two chefs involved in serving this concoction (or previous versions) have been forced to resign. Now we are in our third chef in 3 years. He only started working last month, but bets are already being made on how long it will last at work. There is talk that he could be the shortest chef in history.
Now, many people are turned off by economic data. So, I created these two graphs, which I think show easily comparable data. They compare the annual growth rate between the GDP of Zimbabwe and the GDP of the United Kingdom. The red dotted line is a trend line that attempts to predict where the two economies will be at the end of the next three-year period.
Source: National Statistics Office.
Comparing the economies of the United Kingdom and Zimbabwe, after the recession, Zimbabwe's economic growth has recovered at a higher rate. An extrapolation of the trend line (red dotted line) seems to suggest that this could also be true in the future.
Sources: IndexMundi and Trading Economics
PLEASE NOTE: the data for 2019 is incomplete and it is not clear what the effect of Brexit will be. In addition, due to global and national events in the two countries, it is a great possibility that both Zimbabwe and the United Kingdom may be on the verge of economic recession. My focus is on what happens after the recession and, therefore, on which of the two countries, capitalize on tin in the case of a recession. The economic growth following the recession of the two countries and the GDP growth trends are the reason for my contrary opinion that make Zimbabwe a worthwhile consideration for investment. In a nutshell: if you are going to lose your shirt anyway, and possibly also your underpants, where would you prefer to do it? in Zimbabwe or in the United Kingdom? Choose your poison!
Now, all investments carry different levels of risk. And foreigners who are considering investing in Zimbabwe have to set the price of a “foreigner responsibility” premium for the cost of their investment (ie, “What are we willing to lose?”). Then they must include that in their return on investment ("What should you do? We return to make this risk worthwhile?"). After those two questions are digested in Excel spreadsheets; the results obtained through PowerPoint presentations and boards have been impressed by the graphics of the Tableau visualizations that accompany the entire show; Frequently, the decision will always be the same: No, Nein, Non or Nyet. The differences between these responses are not only in the language, but also in the varying degrees of courtesy with which the refusal is expressed. A rejection, no matter how polite, remains a rejection.
Fortunately, every economic recession has its success stories.
And, like Zimbabweans in the diaspora, we have an "familiarity advantage." We are better able to measure, manage and navigate several elements of that risk than non-Zimbabweans. For example, on our trips to visit families in Zimbabwe, we could obtain products abroad, for only $ 100, which we resell in Zimbabwe. If the return is zero; The loss is exactly that: $ 0. If the return is good, we try again with $ 200 in goods, which we could send with a friend or family member or other cheap means, and so on. And if it works, a business can be born from that. The cost of doing so, both in terms of commercial risk and financial outlay, is minimal. A multinational corporation cannot enter or leave a market at such a minimal cost.
We can help obtain products that are exclusively Zimbabwean (for example, handicrafts); or that can be produced at a low price in Zimbabwe and sold at competitive prices in our destination countries. With little or no cost, we can use our networks of friends, family, neighbors and former classmates to help us obtain these products. A multinational corporation does not easily exploit such networks.
When things go wrong in Zimbabwe, for example with the current shortage of energy, we find out about them almost immediately. Things that go wrong mean there is a problem. That problem is often a business opportunity. There will be a reward for the risk taker who provides an effective solution to that problem; Cheap and delivered to a high level. The reward is commonly known as profit. And the more agile problem solver is rewarded even more with the advantage of the first player. That often means enjoying higher profits for longer; before everyone else, and his ferret, get in the car and profits erode, assuming, of course, that the problem still exists by then! A multinational company cannot respond to opportunities in Zimbabwe as fast as this.
The above limitations on the nature of the investments that multinational companies can take advantage of, mean that there are opportunities that ordinary people and small and medium-sized businesses can take advantage of.
So why don't we do it or do it as much as we should? The image is complex. However, among the long list of reasons (many of them controversial!) Of which I hear, one of the most common threads is that there is a limit to what one can achieve through family and friends. I guess it means that our individual networks are too small.
In all my life I have never met anyone who has complained about having too many friends! Therefore, it is no accident that many successful people say: "Your network is your net worth." Others say: "You are the average of the 5 people you spend most of your time with." It is through collaboration with others that we can leverage our efforts to achieve much more than we can on our own. It is through this collaboration that we can go out to reach our true potential. I believe that the logic of this statement is true regardless of social status, race, gender, political affiliation or any other difference that keeps us, as people of Zimbabwe, separated.
I intend to move forward with my opposite view. And to give it a chance of success, I need to develop the networks that will allow this to happen. It is for this reason that I will attend the Zimbabwe Foreign Trade Mission in the United Kingdom to meet businessmen from Zimbabwe and Great Britain and explore opportunities for collaboration. It will take place in the first week of September in London and Birmingham. It is an opportunity to meet key figures in Zimbabwe's growth sectors, such as renewable energy, agriculture, tourism and mining. There are specific opportunities for collaboration with UK companies for FMCG horticulture importers (retailer, wholesaler and manufacturer), suppliers of fabrics, fashion, leather, arts and crafts; house designs, furniture suppliers and biometric access control systems.
The Zimbabwe Foreign Trade Mission to the United Kingdom takes place from September 2 to 5. It has been organized by the Department of International Trade of the British Government, the Zimbabwe Diaspora Network and ZimTrade. Please click here for more details.
Crosby Pamberi is the CEO of Heritage Pay
You can reach him at email@example.com
Heritage Pay is an international payment and money transfer company based in the United Kingdom. We specialize in money transfers for commercial investments; investment in the stock market; and, commercial and residential properties. www.heritagepay.co.uk
DISCLAIMER: The opinions expressed here are those of the author. They are based on publicly available information at the time of writing; and, therefore, they are constantly evolving. None of the information contained herein is, nor should it be construed as financial advice. Past performance is not a guide for the future. You should always seek your own independent financial advice (and, most importantly, your spouse's permission!) Before making any financial decision.
Heritage Pay Limited is registered in England and Wales – Company No. 11129859
© Heritage Pay Limited, 2019, All rights reserved.
Heritage Pay Limited payment services are provided by The Currency Cloud Limited. Registered in England No. 06323311. Registered office: Stewardship Building 1st Floor, 12 Steward Street London E1 6FQ. Currency Cloud Limited is authorized by the Financial Conduct Authority under the Electronic Money Regulations 2011 for the issuance of electronic money (FRN: 900199).
TO CONTINUE THE NEXT WEEK. . .