To All our American Readers Happy Fourth Of July .

2009 Will be fine. 

The first half of 2009 is over. Most are happy to see it end as it has been brutal and stressful for most business people and investors around the world.

Yesterday one of my clients introduced me to a few of his Australian friends. He complemented me by stating “Lawrence has a good track record on the markets”. He was referring to my recommendations I make in my weekly newsletters. He then asked for current recommendations. 

“Lawrence has a good track record on the markets”

On my recent yacht excursion from France to Spain a good friend asked me “why do you bother talking about the financial markets when you are primarily in the real estate market?” 

I replied “because I feel at this point in my life I can offer people sound advice in these trying times on where to put their money as I've been very successful with my own investments”.

2009 Predictions Very Accurate:

I began the year with a slogan “2009 would be fine” certainly in contrast with the dire predictions of a world wide depression that were circulating at the time.

If you remember back to the end of last year everybody was in crisis mood and very unsure about the future. 

In my January newsletter I said that "we would recover in the first half”.

In March I said that I was “80% sure that the bottom had been reached”. Everyone thought I was nuts (usually a good indicator that I am right).

 The following month I stated I was 90% sure and last month most experts agreed with me that we are in another upturn in the economy.

Stock Markets have Good First Half.

Predictions for Second Half 2009:

So should you consider purchasing stocks at this point? Frankly I really hate buying after recent increases from 24% to 48%. I would rather wait for a serious correction of 40% to 60 % of the prior move and then purchase with confidence rather than try to get in on something that may be too late.

Here is my current investment portfolio breakdown as of today.

These have all done well in the first half of the year and I just added more positions in wheat corn and soybeans after recent corrections.

My philosophy here is simple.

The world’s population is growing and people have to eat and will wear clothes, drive more cars and wear more gold jeweler.

"The world’s population is growing and people have to eat and will wear clothes, drive more cars and wear more gold jewelry".

Since most of these commodities are still at a large discounts of what they were last year they are on sale. 

I don't really care what happens in the short term I purchased these on what is called a mini-long contract with my bank R.B.S.

There is no expiration dates so sooner or later I will be right and will not lose money on these commodities. 

A more dangerous (and potentially more profitable) way to invest in them would be in commodities contracts which have expiration dates. All too often in the past I've learned from experience they are very dangerous.

U.S.D . Continues to Fall:

The one prediction that continues to be very accurate is that of the downfall of the U.S.D. At the beginning the year I said “the US dollar will sell off dramatically this year”

In the first four months the U.S.D. dollar index lost 18%.

To profit from this prediction I moved most of my cash into Canadian, European and Singaporean currencies which increased as much as 18% against the U.S.D. 

After the recent bear market rally I expect another major downturn in the U.S.D. dollar.

Remminbi Future King:

I remember back 25 years ago and when I predicted at a major investment seminar that China will be the next economic power of the world and that digital cameras would replace film completely. Everyone thought I was nuts. Just last week Kodak announced the end of 35mm film. And arguably China now rules the economic world.

Indonesia Next Economic Tiger:

I believe that the IDR will be very strong for the near future and may reach 9,000 to 9,500.

More importantly for Indonesia’s future is the fact that Indonesia has one of the lowest costs of labor in the world at this point. 

Historically Economic Power shifted East To West:

I have an economic theory that I have developed over the years.

 When you look at history it is interesting to note that economic power has always shifted from east to west.

It all  started with China and its powerful dynasties which at the time controlled most of the  known world and then moved on to the Middle East and Turkey to Rome  then to Germany and France then England .  

America became powerful when immigrants were willing to work for low wages in a country that had large amount of natural resources. Then power shifted back to the east in Japan. 

My sincere belief is the reason for these power changes throughout history is quite simple.

A country becomes powerful because of inexpensive labor and plentiful natural resources which are managed by individuals who have the Eye of the Tiger and are willing to work harder and smarter than other countries to achieve their goals.

Then they become successful and the next generation becomes spoiled. The next generation becomes lazy and loose their competiveness. This is what is happening in America, most western countries and in my own country, Canada as well.

This will also happen in China in the very near future. If you don't believe me go Macau and watch the “new rich” Chinese gamble away there fortunes.

Indonesia on the other hand has the fourth largest population in the world that is willing to work hard at very low wages of $70-$80 per month. They also have abundant natural resources such as coal, oil, palm oil, lumber and even gold and precious metals. 

The only thing preventing Indonesia in the past has been poor management and a corrupt government.  Although corruption is still happening  it is decreasing exponentially as the daily news shows that anyone can be jailed including the presidents own brother-in-law.

In the last 12 years I've seen corruption move from above the table to below the table to now where many govt. employees and politicians are afraid to take bribes for fear of jail sentences.

Bali Real Estate Real Winner:

You will notice that over half of my net worth is invested in Bali real estate in the form of Villas, Office buildings and Beachfront land.

While prices in the rest of the world collapsed the last two years Bali real estate went sideways

After a slow start for the first half things are picking up dramatically. In fact just today I sold my first beachfront land in some time. 

Now that foreigners from around the world realize the recession is over and  they won't lose her job and that inflation is most likely to happen next year they want to get them selves into something that will rise with inflation and benefit from Bali's tremendous popularity at this time. 

In life you can choose between following losers or winners:

I'll be honest with I made a lot of mistakes in my first 25 years of being a businessman and an investor.

I am a student of the school of hard knocks and learnt from my mistakes.

In the last ten years I have been almost 100% correct on my predictions and have made millions since I had the intestinal fortitude to take chances when others were wary.

With that in mind remember that nobody has a crystal ball and nobody knows what the future holds including yours truly.

You must make your own investments based on good advice from those in the know and follow your own gut feelings about the future supply and demand. 

The one thing we do know is that the population of the world is growing and also the population of the world is also aging.

Estimates last week are that by the year 2030 the amount of senior citizens in the world will double because of the baby boomers coming into the senior citizen age group.

My generation of baby boomers have dictated markets throughout our lifetime .These new seniors  will be demanding new items they have not demanded the past such as second homes and vacation homes in warm clean places away from the crime and dirt of most of the cities around the world.

I wish you all a very successful second half of 2009.

I believe if you follow my lead you will make a lot of money in the next six months.

Yours Truly,

Lawrence Bellefontaine.

 President /Director