Happy New Year! Below are the total returns for the 50 country equity indices in the Beyond Borders Investment Strategies (BBIS) investment universe. As a reminder, total returns include index price appreciation plus dividend payments. Please note that during 2024, the Exchange Traded Funds (ETFs) focused on four countries’ stock markets, which were previously trading on the US stock markets, were discontinued by their providers. These countries include Egypt, Nigeria, Pakistan, and Portugal. It became more difficult for most US investors to get exposure to the stock markets of these four nations. The total returns of these countries’ MSCI equity indices, which still exist, are highlighted with asterisks. 

To read the full report, please Click Here

If helping countries recover from crises and stopping the suffering of their people – while earning investment returns – is as vital to you as it is for BBIS, its clients, and friends, please let me know. We may partner on this meaningful journey! Please let me know if you have any questions about BBIS or the firm’s investment strategies, want to be on our publication distribution list, or would like to invest with BBIS.

Thank you!
 
Best regards,

Vitaly
 
Vitaly Veksler, CFA 
Founder / CEO / Global Macro Portfolio Manager 
Beyond Borders Investment Strategies, LLC 
Phone: 617-817-2163 
Email: vveksler@bbistrategies.com
LinkedIn: http://www.linkedin.com/in/veksler
Website: www.bbistrategies.com
 
Beyond Borders Investment Strategies & Our Clients: The Few. The Proud. The Crisis Fighters. We Earn Returns While Helping People in Crisis-Stricken Countries Recover from Devastating Crises by Investing via Portfolios of Single-Country Equity ETFs in Companies That Create Jobs. We Do Not Use the US Government’s Funds. Hence, We Do Not Add to the Nation’s Giant Debt. Please Tell Us If You Want to Join the Fight!
​

“Behind any business or venture, there is always a goal that makes a founder, or founders, drop the comfort and familiarity of their existing jobs and jump into the sea of entrepreneurial uncertainty where the next paycheck may come - or may not. The goals behind the businesses help the founders persevere in building their firms even on bad days when everything goes wrong. The goals are the fuel for founders and their firms to overcome obstacles. The stronger the founders’ belief in their goals and the wider this belief is shared by their employees and clients, the more obstacles a firm can overcome.
 
The goal for Beyond Borders Investment Strategies (BBIS) was born exactly 30 years ago, on July 8, 1994. The goal was to help countries recover from crises using private sector investments rather than foreign aid to crisis-stricken countries’ governments. The foreign-aid-based approach has been dominant since the end of World War II, but it has also been wildly inefficient.”
 
These are the opening paragraphs of the report titled “30 Years to the Goal of Fighting Devastating Crises via Investments – Not Endless Aid.”
 
In this report, among other topics, a reader will find answers to the following questions.
 

• What singular experience propelled the goal of helping countries recover from crises into my head precisely 30 years ago?

 

• What did a gangster teach me at knifepoint on a Moscow subway train about the impact of the economic crisis on unemployment in his city and his decision to rob people 500 miles away?

 

• How did sales of dry milk powder packs in second-hand stores convince me that any foreign aid that was easy to steal would be stolen?

 

• On average, what percentage of foreign aid is stolen by government officials of aid-receiving countries every quarter the aid is disbursed to these countries?

 

• What reasons make the dominant foreign-aid-based approach to helping crisis-stricken countries recover from crises wildly inefficient?

 

• Which sector is the largest job creator in every country in the 49-nation BBIS investment universe – public or private?

 

• How does BBIS contribute to lowering unemployment and, by extension, ending crises via investments in single-country equity ETFs?

To read the full report, please Click Here
 
If helping countries recover from crises and stopping the suffering of their people – while earning investment returns – is as vital to you as it is for BBIS, its clients, and friends, please let me know. We may partner on this meaningful journey! Please let me know if you have any questions about BBIS or the firm’s investment strategies, want to be on our publication distribution list, or would like to invest with BBIS.

Thank you!
 
Best regards,

Vitaly
 
Vitaly Veksler, CFA 
Founder / CEO / Global Macro Portfolio Manager 
Beyond Borders Investment Strategies, LLC 
Phone: 617-817-2163 
Email: vveksler@bbistrategies.com
LinkedIn: http://www.linkedin.com/in/veksler
Website: www.bbistrategies.com

I attended my 15-year reunion at the MIT Sloan School of Management this weekend. There, I had many wonderful conversations with friends from all over the world on a variety of topics.
 
Several discussions focused on Beyond Borders Investment Strategies, LLC (BBIS) and its twin goals of helping crisis-stricken countries recover from crises and earning attractive investment returns for our clients. I explained why we do this by investing in single-country equity Exchange Traded Funds (ETFs) representing these countries – where stock markets trade at low valuations – and exerting upward pressure on the stock prices of all public companies. Almost always, stock prices drop precipitously before and during major economic, business, financial, political, human health, environmental, or other crises.
 
By pushing stock prices up – or even slowing their declines initially – we reduce the pressure on companies’ CEOs to close corporate facilities and, most importantly, lay off employees. Layoffs in a company often cause layoffs in the company’s suppliers and buyers. Layoffs in just a few companies – and their buyers and suppliers – may lead to a vicious rise in unemployment that may destroy people’s well-being, health, dignity, and, often, lives in the entire country.
 
I explained BBIS’ goals and how they are implemented not in a vacuum but in comparison with the foreign-aid-based approach to helping countries recover from poverty and crises. This approach is dominant but wildly inefficient. Under this dominant approach, the governments of Western donor countries or multilateral development organizations such as the International Monetary Fund (IMF) or the World Bank give grants – ‘free’ money – or extend low-interest loans to the governments of poor and crisis-stricken countries.
 
In the report “Foreign Aid Theft Calls for an Investment Alternative to Help Crisis-Hit Nations,” I demonstrated numbers showing that the foreign-aid-based approach has not worked well for many decades. After more than five trillion dollars were spent as foreign aid to poor and crisis-stricken countries during 60 years from 1960 to 2019, less than a quarter of the nations managed to leave poverty behind and get off their dependence on foreign aid. [1] Not too impressive! More than three-fourths remained hooked to foreign aid as drug addicts to their drugs.
 
I listed all seven reasons why the foreign-aid-based approach has not reached the desired results in reducing poverty, fighting crises, and helping countries get (back) on the path of sustainable economic development. However, I focused on the same reason I discussed most with my classmates at MIT Sloan: foreign aid is often stolen. I explained why theft happened time and again and quantified the phenomenon with the numbers provided in an explosive World Bank report, which the bank was accused of trying to suppress. [2] I also shared striking numbers to quantify the theft of humanitarian aid in Russia during the first winter after the collapse of the Soviet Union and the stealing of materials on a significant World-Bank-financed road construction project in Indonesia.
 
I explained in the report why, at BBIS, we rely on investing in corporations in large part because it is much more difficult to steal from them than from governments. This principle holds both for physical assets and cash onsite as well as investments in their stocks on stock exchanges.
 
To read the full report, please Click Here
 
If helping countries recover from crises and stopping the suffering of their people – while earning investment returns – is as vital to you as it is for BBIS, its clients, and friends, please let me know. We may partner on this meaningful journey! Please let me know if you have any questions about BBIS or the firm’s investment strategies, want to be on our publication distribution list, or would like to invest with BBIS.
 
Thank you!
 
Best regards
Vitaly

Vitaly Veksler, CFA
CEO & Portfolio Manager
Beyond Borders Investment Strategies, LLC
vveksler@bbistrategies.com
 
 
P.S. The current report is partially based on a much more comprehensive 50-page-long white paper titled “Ending Devastating Crises While Earning Investment Returns,” which I authored in May 2023. If you are interested in the topic, please feel free to read that paper. For example, if you want to learn more about all seven reasons that make the foreign-aid-based approach inefficient, you may find them described and analyzed in that paper.
 
To read the white paper, please Click Here






[1] World Bank, “Net Official Aid Received (Constant 2020 US Dollars).” Downloaded on February 21, 2023.
[2] Kelsey Piper, Vox, “Some Development Aid Gets Misdirected. Did the World Bank Try to Suppress a Paper Saying So?” February 21, 2020.

To read the full report, please Click Here
 

​Please let us know if you want to:

1. Invest with BBIS.
2. Ask questions about BBIS or the firm’s investment strategies.
3. Learn more about BBIS’ country investment analysis consulting services.
4. Would like to be on our publication distribution list.

 
Thank you!
 
Best regards,

Vitaly
 
Vitaly Veksler, CFA
CEO & Portfolio Manager
Beyond Borders Investment Strategies, LLC
vveksler@bbistrategies.com
​
​

Sources: Refinitiv, Beyond Borders Investment Strategies (BBIS). Used MSCI country index performance for 48 countries - all but the US. The US performance is represented by MSCI USA and S&P 500 indices. All performance series measure total returns of US Dollar-denominated indices.
 
Disclaimer: Opinions expressed in this report are of BBIS and are for information purposes only. This report does not represent investment advice. BBIS holds investment positions in single-country equity ETFs of some or all countries mentioned in the report. Past performance is no guarantee of future results.

I love writing reports about stock markets’ performance in November, regardless of the performance. I love to do it because I write these reports in December. As a person who loves competitions and compares the stock market performance competition to a grueling multi-stage cycling race, I know December is the last of the twelve stages. The 2023 cycling race will end at the end of December, and we will crown our annual winner in just several weeks.
 
This year, we have a clear leader. The MSCI Argentina Index leads the competition with total returns of 58.7% on a year-to-date basis as of November 30, 2023. As a reminder, total returns include price appreciation and dividend payments. The leader is pursued by a pair of competitors who are more than 10% behind. MSCI Greece had total returns of 48.5%, and MSCI Egypt had total returns of 48.2%. More than 10% further down are MSCI Poland (38.0%), MSCI Italy (34.6%) and MSCI Spain (30.3%). MSCI Mexico (with total returns of 29.3%), MSCI Denmark (27.3%), MSCI Taiwan (24.4%), and MSCI Brazil (24.3%) rounded up the “Top 10” group at the end of November 2023. Overall, 38 out of 50 indices in the investment universe of Beyond Borders Investment Strategies (BBIS) had positive YTD returns.
 
So, how did the competitors arrive at this point? By absolutely sprinting during the November stage of the competition. In a very rare turn of events, every single index registered positive returns during the month.
 
In this report, I talk about five topics with the following headers:
 

1. The Reasons for the November 2023 Stock Market Rally in All Corners of the World
2. An Incredible Performance of the Argentinian Stock Market in November 2023
3. The Latin American Socialist Express Train May Be Changing Its Direction
4. The November Monthly Prize for Resilience Goes to MSCI Israel
5. Stock Market Questions I Want to Answer in December 2023

 
To read the full report, please Click Here
 
Please let us know if you want to:

1. Invest with BBIS and help crisis-stricken countries and their residents recover from crises that destroy their standards of living, dignity, families, health, and lives
2. Learn more about BBIS’ country investment analysis consulting services
3. Ask questions about BBIS, the firm’s investment strategies, or if you want to be on our publication distribution list.

 
Thank you!
 
Best regards,

Vitaly
 
Vitaly Veksler, CFA
CEO & Portfolio Manager
Beyond Borders Investment Strategies, LLC
vveksler@bbistrategies.com

​

Sources: Refinitiv, Beyond Borders Investment Strategies (BBIS). Used MSCI country index performance for 48 countries - all but the US. The US performance is represented by MSCI USA and S&P 500 indices. All performance series measure total returns of US Dollar-denominated indices.
 
Disclaimer: Opinions expressed in this report are of BBIS and are for information purposes only. This report does not represent investment advice. BBIS holds investment positions in single-country equity ETFs of some or all countries mentioned in the report. Past performance is no guarantee of future results.

Several people who knew what the firm I founded, Beyond Borders Investment Strategies, LLC, was doing contacted me during the first three weeks after Hamas’ horrific terrorist attack on Israel that resulted in a gruesome massacre of men, women, children, and the elderly and mass kidnappings of the Israelis and guests of Israel, who were taken by the murderous demons into their underground lairs in Gaza. Some asked me what investments they could make to help the Israeli economy recover. Others were more specific and asked me what single-country equity Exchange Traded Funds (ETFs) they could buy to support Israel’s economic recovery during and after the war that was started by the Hamas attack.
 
In Part 1 of this report, I explain the danger that the Israeli economy is facing from the falling stock prices that were caused by the war with Hamas. I share several scenarios showing how falling stock prices can negatively impact companies and the economy and cause high unemployment that can persist unless treated before its spread. In Part 2, I explain why people reached out to me to learn about single-country equity ETFs in the first place and how investing in these investment vehicles can help save jobs in any crisis-stricken country and assist it – and its residents – in recovering from a crisis, as long as there is a single-country equity ETF that tracks the country’s stock market.
 
In Part 3, I provide names and tickers of four equity ETFs tracking Israeli stock markets that trade on the US markets and that investors can buy in their brokerage accounts. I share some analyses of the ETFs I have used while selecting single-country ETFs for all 49 countries in the BBIS investment universe over the last decade. I also share potentially attractive returns that the ETFs’ valuation expansion to the long-term average levels may cause in the future. In Part 4 of the report, I talk about the most critical catalyst that, in my opinion, would lead to attractive returns of the Israeli ETFs, which I calculated at the end of Part 3. I also talk about some risks that can delay or lower these returns. They include any negative surprises that prolong the war, the war with Hamas turning into a regional battle with an Iran-led terrorist coalition, the potential success of Hamas’ strategy of hiding behind civilians and waiting for international public outcry to make Israel leave Gaza before eradicating Hamas, depreciation of the Israeli Shekel, and a global recession lowering economic growth and revenues that Israeli companies derive from their exports.
 
One goal of this report is to provide potential investors with information to help them decide whether they would like to purchase shares of the Israeli equity ETFs to help the country during this difficult time and, if so, which ETFs to buy. I also hoped to make the report useful for those interested in investing in the Israeli ETFs in search of higher returns, as I believe the current equity valuations are low. I hope that those who want to help the Israeli economy recover, those who want to make money by investing in Israeli companies at attractive valuations, and those who want to reach both goals will find this report helpful.
 
This report is of an educational rather than commercial nature. Investors who want to buy Israeli ETFs can do this independently of BBIS.
 
To read the full report, please Click Here
 
Best regards,
Vitaly

Vitaly Veksler, CFA
CEO & Portfolio Manager
Beyond Borders Investment Strategies, LLC
vveksler@bbistrategies.com
 
 
Disclosures: This report should not be construed as investment advice. Please do your own research to determine whether the Israeli ETFs – EIS, ISRA, ITEQ, and IZRL – or any other investment instruments mentioned in this report are appropriate for your investment portfolios and, if so, their respective portfolio weights. Beyond Borders Investment Strategies, LLC holds investment positions in EIS and ISRA. BBIS does not have any profit-sharing agreements with any of the ETF providers.

BOSTON, MA – 05/09/23 – The white paper “Ending Devastating Crises While Earning Investment Returns” is one of the most important documents I wrote at Beyond Borders Investment Strategies. The paper explains how the firm pursues the twin goals named in its title – ending devastating crises (impact investing) and earning investment returns (traditional investing). In the paper, I wrote about how my experience of living through a catastrophic crisis that hit all former Soviet republics and seeing how foreign aid was mainly misused and stolen motivated these goals’ development.
 
A Devastating Crisis Next Door: In the paper, I also answered a question I have often been asked. People assumed that devastating crises happen only in emerging and frontier countries. This assumption is not correct. In the paper, I analyzed some consequences of the European Sovereign Debt Crisis (2008-2012) for developed countries like Portugal, Ireland, Italy, Spain, and Greece. Due to the incredibly high unemployment, especially among youth, these countries lost some of the most intelligent and best-educated young people through emigration. This loss will reverberate and negatively impact the nations and their citizens – both people who were forced to leave abroad and their loved ones who stayed home – for decades.
 
As Armies of Evil, Crises Kill People or Make Their Lives Miserable: In the paper, I compared some debilitating consequences of crises (i.e., poverty, hunger, societal division) with the Horsemen of the Apocalypse. I often think about the Horsemen as the terrifying faceless and invisible Dark Riders masterfully described by J.R.R. Tolkien in his “Lord of the Rings” trilogy about the war between good and evil and not less masterfully created by the makers of the movies based on the books. In my opinion, ‘Unemployment’ is a Horseman who shows up during every crisis, often leading other Horsemen. In battles against crises worldwide, we target the ‘Unemployment’ Horseman first and foremost. BBIS’ approach of investing in stocks of public companies all across crisis-stricken countries helps prevent unemployment from spreading across the crisis-stricken countries as an epidemic that amplifies the magnitude of the crises dramatically.
 
The Foreign-Aid-Based Approach of Helping Countries Does Not Work in Most Cases: The firm was founded to help countries recover from crises because the most dominant approach to doing this is wildly inefficient. It works in less than a quarter of cases. During the 60 years from 1960 to 2019, foreign governments and multilateral organizations distributed a tremendous amount of money as foreign aid. According to the World Bank, foreign aid distributed during the 60 years constituted an extraordinary amount of $5.15 trillion in inflation-adjusted 2020 US Dollars. [1] Unfortunately, the assistance did not lift most countries from poverty, nor did it enable them to face new crises without relying on foreign aid. Most countries receiving assistance at the beginning and in the middle of the period continued to receive aid at the end. Out of 179 countries and territories that received official development assistance (ODA) during the 60 years, only 42 countries (23.5%) graduated from the group and ended their dependence on the aid by the period’s end. [2] A strikingly high number of countries, 137 (76.5%), continued to receive assistance in 2019. [3] It is hardly an efficient process of helping countries recover from crises sustainably when more than three-quarters continue to depend on foreign aid as addicts depend on drugs or alcohol.
 
Under the foreign-aid-based approach, most funds are delivered to these countries’ governments or non-profit organizations’ offices. While both types of entities use the money to pay off immediate debts and, sometimes, feed the populations in the short or medium term, neither is suited for efficient job creation. But job creation – not government payments or handouts – helps countries achieve sustainable economic development. While working for companies and corporations, people develop or hone skills that make them valuable to their current and future employers and allow people to feed themselves and their loved ones for the rest of their lives. Unfortunately, people do not develop any skills when they get payments or handouts from governments or charities, as it is so common under the foreign-aid-based approach. As a great proverb says, “Give a person a fish, and you feed the person for a day; teach a person to fish and you feed the person for a lifetime.”
 
In the paper, I described eight reasons that make the foreign-aid-based approach to helping countries recover inefficient. They range from giving money to people not experienced in creating jobs to the politicization of the aid distribution both within the foreign aid grantors and recipients to the outright theft of the funds.
 
The Firm’s Supporters: In the paper, I described BBIS’ supporters, who include clients, potential clients, interns, Advisory Board members, and many friends and colleagues spreading the word about the firm, and whose valuable advice and sometimes just kind words benefitted the firm tremendously. Generally, the firm’s supporters are globally-oriented conscientious people who are humanitarians and pioneers. As humanitarians, they want to help crisis-stricken countries and their citizens recover from significant crises. As pioneers, they do not want to rely solely on the prevalent but not efficient – and often damaging in the long term – foreign-aid-based approach to helping crisis-stricken countries recover. The firm’s supporters believe in investing money in the stocks of private sector companies and incentivizing them to add new offices and factories and hire people, or at least not close their facilities and fire people during crises. Our supporters do not believe in the government distribution of foreign aid as the primary method for getting countries out of crises.
 
Instead, our supporters implicitly believe in Adam Smith’s ‘invisible hand’ metaphor that this Scottish enlightenment thinker described in his famous book “The Wealth of Nations” in 1776. [4] According to Investopedia’s “What is the Invisible Hand in Economics?” article, “The invisible hand is a metaphor for how, in a free market economy, self-interested individuals operate through a system of mutual interdependence. This interdependence incentivizes producers to make what is socially necessary, even though they may care only about their own well-being.” [5] Our supporters rely on the millions of ‘invisible hands’ of people working in the private sector’s corporations – rather than on the hands of governments, charities, or multilateral agencies such as the International Monetary Fund (IMF) and World Bank – to earn salaries for themselves and generate profits for their employers, deliver investment returns for investors who invested in these corporations, and – in the process – help countries recover from crises.
 
The firm’s supporters understand and share the firm’s mission and have a fierce desire to help people in crisis-stricken countries recover while earning returns from investing in companies. BBIS’ supporters are not satisfied with just sitting and hoping that the foreign-aid-based approach would miraculously start working more often than it did in the past. They have an intense focus on the mission, sharp intellect, incredible ingenuity, healthy disregard for dogmatic thinking and obstacles, the ability to coolly assess risks and not panic while facing them, and tremendous perseverance required to make a new way of solving previously unsolvable problems work. In fact, BBIS’ supporters are not unlike the US Marines, who are often called to duty in many dangerous places around the world and solve problems deemed unsolvable before their involvement. Our firm’s and its supporters’ motto is related to the Marines’ motto, “The Few. The Proud. The Crisis Fighters. Earning Returns While Helping People in Crisis-Stricken Countries Recover from Devastating Crises That Destroy Their Standards of Living, Dignity, Families, Health, and Lives by Investing in Companies That Create Jobs.” [6]
 
Below is a quote from the white paper on how our supporters measure success. “We have been lucky to attract supporters who share our mission of helping crisis-stricken countries, their companies, and people to recover from crises. Our supporters share the meaning of what we do. They care not only about earning returns on their money but also about protecting and creating jobs in crisis-stricken countries. These jobs feed parents who would not have to sell their organs to provide for their families or give up their kids for adoption. These jobs provide income to women who would not have to get on a panel to earn a living. These jobs give youths a much better alternative to joining gangs and killing or terrorizing each other and other people. The jobs enable men and women to provide for their parents in countries with weak social protection nets. Through taxes on these jobs, countries can take care of their senior citizens by paying them pensions that would provide them with dignified lives rather than reducing them to living in fear of death from hunger. By investing with BBIS, you would be transformed from just an investor to a big-hearted superhero who comes to the rescue of people in crisis-stricken countries worldwide.”
 
If you are interested to learn more about BBIS’s pursuit of the goals of helping countries recover from crisis and earning returns while doing this, you can read one of the three versions of the report:

• To read the full 50-page report, please Click Here
• To read an 8-page firm profile, please Click Here
• To read a 1-page firm snapshot, please Click Here

 
Please let us know if you want to:

• Invest with Beyond Borders Investment Strategies (BBIS) and help crisis-stricken countries and their residents recover from crises that destroy their standards of living, dignity, families, health, and lives;
• Learn more about BBIS’ country investment analysis consulting services; and
• Ask questions about BBIS or the firm’s investment strategies or would like to be on our publication distribution list.

 
Thank you!
 
Best regards
Vitaly

Vitaly Veksler, CFA
CEO & Portfolio Manager
Beyond Borders Investment Strategies, LLC
vveksler@bbistrategies.com





[1] The World Bank, “Net Official Aid Received (Constant 2020 US Dollars).” Downloaded on February 21, 2023.
[2] Ibid.
[3] Ibid.
[4] Adam Smith, “An Inquiry in the Nature and Causes of the Wealth of Nations,” 2018. First published in 1776.
[5] Christina Majaski, Michael Sonnenshein, and Ariel Courage, Investopedia, “What Is the Invisible Hand in Economics?” January 1, 2023.
[6] The short version of the motto reads, “The Few. The Proud. The Crisis Fighters. Earning Returns While Helping People in Crisis-Stricken Countries Recover from Devastating Crises by Investing in Companies That Create Jobs.”

​The Reason I Was Thrilled to Write This Report: I love the intellectual stimulation of writing investment reports. When I write the reports, I organize my thoughts; find facts that confirm, update, or destroy beliefs I have or had; and learn facts that interest me and may be used in the report I am working on or future reports. I also like writing reports when / if my predictions turn out to be correct. As Niels Bohr, a Nobel-Prize-winning physicist, said, “Prediction is very difficult, especially if it’s about the future.” Whenever I am right, I smile on the inside and often on the outside. But sometimes, in addition to the intellectual stimulation and the realization that my predictions were correct, I get happy because I have cheered for the protagonists of my reports to achieve something very difficult or almost impossible. This report is in this category.
 
I am thrilled that the stock markets of the European countries rebounded in line with my 2022 expectations, or actually, regardless of my expectations. I am happy they performed strongly in the first two months of 2023. You have got to respect countries – their political leaders and businesses – that worked so hard to improve their difficult situation. In the wake of Russia’s invasion of Ukraine and the economic sanctions imposed on Russia, the European countries found themselves in great need of replacing energy imports from Russia with imports from other countries. In 2021 before Russia invaded Ukraine, for example, Germany received 55% of its natural gas from Russia. [1] Many European leaders – namely German Chancellor Olaf Scholz – worked around the clock on organizing the construction of a new Liquefied Natural Gas (LNG) import facility in Germany and sourcing the gas imports for it. They have achieved a feat that was considered impossible. The accomplishment’s magnitude and speed can be judged by the title of The Wall Street Journal’s article “The Five-Year Engineering Feat Germany Pulled Off in Months.” [2] Now Germany is building four more floating LNG import facilities and is planning to develop one or several more permanent onshore LNG facilities. [3]
 
Germany has not been the only country that started building or planning the construction of LNG facilities due to the Russian attack on Ukraine. There are two terminals under construction in Finland. [4] According to the European Commission 2022 data, LNG facilities expansions or construction of entirely new facilities is planned in Belgium (1 facility), Estonia (1), France (2), Greece (2), Ireland (2), Italy (1), Latvia (1), Netherlands (1), Spain (5), Sweden (1), Poland (1), Portugal (1), and the United Kingdom (2). [5]
 
I want to emphasize that the excellent leadership of European countries should not be taken for granted. Often, governments cause crises or exacerbate them with their faulty policies or neglect, leaving it for businesses to fend off for themselves. But some crises can be resolved only at the government level. The European countries’ transition from reliance on Russian natural gas imports to imports from other sources is one of these crises. That is why I cheered for the European countries seeing the tireless work of their political leaders.
 
While working at Beyond Borders Investment Strategies (BBIS), I have seen a fair share of crises handled poorly. We often invest in stock markets of crisis-stricken countries, which often trade at low valuations compared to their historical averages. We aim to help countries recover from crises and earn attractive returns for our clients as stock market valuations increase to the historical average levels or even above them as crises pass. By investing in countries via single-country ETFs, we quickly infuse capital into stocks of all large and medium-sized public companies. We contribute to arresting dramatic stock price falls – that crises often result in – stock market prices bottoming and even rebounding. The stock price bottoming and rebounding make layoffs and high unemployment – which can dramatically worsen crises – less likely.
 
Without the government’s leadership, companies do what they can, often contributing to high unemployment that exacerbates crises. As the corporations’ stock prices plummet due to severe macro crises that often have nothing to do with the corporations, their managers are often willing to cut costs and increase stock prices by closing facilities and implementing major employee layoffs. The top corporate managers want the stock prices to go up, often at any cost, for several reasons. Stock prices are barometers of the overall health of corporations. High stock prices allow companies to raise more capital, making them likelier to acquire other companies than to be acquired. Finally, CEOs’ and top managers’ compensation packages are often positively correlated with their company’s stock prices via stock options and other incentive structures. The higher the stock price, the higher the top managers’ compensation. As everybody, CEOs respond to incentives put in front of them.
 
When country governments are not working on resolving crises – or even make them worse by passing anti-business laws or regulations or using many policies that have been discredited historically but keep coming back in the country after the country – CEOs of corporations may use their ‘nuclear buttons’ of cutting company investments to increase their companies’ stock prices. They cut costs by closing offices and plants and laying off employees en masse to stop the stock price declines. According to Forbes magazine, “Conventional wisdom for management is that layoffs are a necessary evil during economic downturns. Often, stock prices will rise in response to layoff announcements. However, in the long term, layoffs tend to lead to decreases in stock prices.” [6]
 
In this context, it was great to see that the European countries’ top politicians addressed the ‘macro’ crisis related to Europe transitioning from its reliance on Russian energy sources before the corporations started laying off their employees en masse. During the transition, the Euro Area unemployment declined rather than increased from 7.0% in December 2021 to 6.7% in January 2023. [7] Unemployment increases are much more often during crises. The January 2023 rate was the second lowest unemployment rate (after October 2022) since 1990. [8]
 
The Report’s Contents: This report is divided into the following six parts:

• Current Year-to-Date Performance Standings
• European Markets Surged in January 2023 After the 2022 Energy Gloom and Doom Did Not Turn into Reality
• Stock Markets’ Pullback in February 2023 as Investors’ Concerns Return
• Global and Regional Factors That Are Likely to Impact Stock Prices in 2023
• Country Selection Matter More than Country Categorization
• Welcome, Kuwait

 
To read the full report, please Click Here
 
Please let me know if you want to:

• Invest with Beyond Borders Investment Strategies (BBIS) and help crisis-stricken countries and their residents recover from crises that destroy their well-being, dignity, health, families, and lives;
• Learn more about BBIS’ country investment analysis consulting services; and
• Ask questions about BBIS or the firm’s investment strategies or would like to be on our publication distribution list.

 
Thank you for your attention, time, and consideration.
 
Best regards,
Vitaly

Vitaly Veksler, CFA
CEO & Portfolio Manager
Beyond Borders Investment Strategies, LLC
vveksler@bbistrategies.com


[1] Georgi Kantchev, The Wall Street Journal, “The Five-Year Engineering Feat Germany Pulled Off in Months,” December 9, 2022.

[2] Ibid.

[3] Rachel Waldholz, Benjamin Wehrmann, and Julian Wettengel, “Clean Energy Wire, “Ukraine War Pushes Germany to Build LNG Terminals, February 15, 2023.

[4] Ibid. The exact source is the European LNG Infrastructure Map Based on the European Commission 2022 Data incorporated in the article.

[5] Ibid.

[6] Q.ai - a Forbes Company, Forbes, “Intel Layoffs: Will Intel Stock Keep Going Up By Cutting Costs?” November 23, 2022.

[7] OECD, “Seasonally Adjusted Unemployment, All Persons.”

[8] Ibid.
​

Sources: Refinitiv, Beyond Borders Investment Strategies (BBIS). Used MSCI country index performance for 49 countries - all but the US. The US performance is represented by MSCI USA and S&P 500 indices. All performance series measure total returns of US Dollar-denominated indices.
 
Disclaimer: Opinions expressed in this report are of BBIS and are for information purposes only. This report does not represent investment advice. BBIS holds investment positions in single-country equity ETFs of some or all countries mentioned in the report. Past performance is no guarantee of future results.
​

If you are like me and love investing, analyzing countries, and competing, you may enjoy exploring the 2022 Performance Tables for 50 country stock market indices at the end of this report. I spend hours studying the past and trying to predict the future performance of the indices. These tables are some of the helpful tools I use in the analysis.
 
To make the tables more interesting initially for my kids but later for all investors at Beyond Borders Investment Strategies, I have been comparing the competition among country indices to an international cycling race with 12 stages (months) and 52 intermediate finishes (weeks). Games and competitions make even boring activities exciting, let alone global investing, such an enjoyable activity you can devote hours to it without any additional help. But for some people outside of the field, competitions make investing more enjoyable.
 
At this point, the cyclists are beyond the last intermediate finish and rush to the finish of the last (December) stage and the annual finish of the whole 2022 competition. As of today, there are only two trading days left. There is a clear winner of the competition. There is a definite loser. But there are still some questions about the performance of some competitors between them.
 
To read the full report, please Click Here
 
Please let me know if you have any questions about Beyond Borders Investment Strategies (BBIS) or the firm’s investment strategies, would like to be on our publication distribution list, or want to invest some funds with BBIS. Please also let me know if you are interested to learn more about BBIS’ country investment analysis consulting services. Thank you.
 
Have a Happy New Year!
 
Best regards,
Vitaly Veksler, CFA
CEO & Portfolio Manager
Beyond Borders Investment Strategies, LLC
vveksler@bbistrategies.com

Sources: Refinitiv, Beyond Borders Investment Strategies (BBIS). Used MSCI country index performance for 48 countries - all but the US. The US performance is represented by MSCI USA and S&P 500 indices. All performance series measure total returns of US Dollar-denominated indices.
 
Disclaimer: Opinions expressed in this report are of BBIS and are for information purposes only. This report does not represent investment advice. BBIS holds investment positions in single-country equity ETFs of some or all countries mentioned in the report. Past performance is no guarantee of future results.

I usually analyze and write about the business environment in foreign countries as my firm considers investing in new single-country equity ETFs or deciding whether to maintain our existing positions there. In this report, I will do the same by analyzing a disastrous millionaires’ tax of 75% on income over €1 million imposed in France in 2013 and 2014. The tax showed the regulatory instability of the French tax code and the city’s unsuitability for assuming the mantle of the European financial center from London after Brexit cut London from the European Union in June 2016. Financial institutions – where a few employees make more than €1 million (one million euros) per year – do not want to work in areas where such political and tax risks exist.
 
But the stimulus for writing the report was much closer to home. The report focuses on the constitutional amendment in my home state of Massachusetts that is called the ‘Fair Share Amendment’ – primarily by its supporters – or the Millionaires’ Tax by its supporters and opponents. The amendment will be presented as Question 1 on the voter ballots during the midterm elections on November 8, 2022.
 
The proposal is to amend the Massachusetts constitution to add a tax of 4% on the portion of annual taxable income over $1,000,000 (one million dollars). In other words, the Question 1 proposal would increase the state income tax by 4% from 5% to 9% - a hefty increase of 80% - on the portions of income above $1 million. According to the amendment authors, the new tax would fund public education, public colleges, universities, and infrastructure maintenance, including roads, bridges, and public transportation. However, if the amendment is adopted, Massachusetts would plummet in terms of its income tax friendliness from 18th place in the nation to 45th or 6th from the bottom (see the second column in Chart 1 below).
 
The definition of “fair” in the “Fair Share Amendment” is also very peculiar and subjective. Is the amendment fair compared to only five states with higher maximum income taxes – California, Hawaii, New Jersey, Oregon, and Minnesota? It does not sound anywhere close to ‘fair’ to raise the tax rate to 9.00%, or 69% above the 50-state average of 5.33%. The current tax of 5.00% seems to be much fairer than the proposed tax of 9.00% compared to the average state income taxes in the other 49 states.

In the report, I will show that the tax is likely to negatively impact the business environment in Massachusetts, making companies and financially-successful people leave for states with low income taxes. If/when companies leave Massachusetts, ordinary people would suffer. They would have fewer jobs, and the state would provide fewer services because it would collect less in overall tax revenues. Increasing the income tax rate means the state risks collecting less overall tax revenues, including corporate taxes. By the way, income taxes may also drop after financially-successful individuals leave the state. The state also risks losing billions in philanthropic donations from financially-successful individuals that have been making Massachusetts a great place to live.
 
The Massachusetts professional teams are likely to weaken. Fewer professional sports people would choose to play in a high-tax environment. Also, in my opinion, it is unfair to impose so-called ‘fair’ taxes on professional athletes whose professional careers last just several years, during which they make most of the money from their working careers. Some would need the money to take care of their sports injuries for years, if not for the rest of their lives. Finally, it is unclear where the additional tax revenues would go and what specific schools, roads, and initiatives they will finance.

In my opinion, it is not right to worsen the state business environment and the lives and careers of so many people in Massachusetts just to give the teacher and other trade union bosses that financed the amendment rollout money for their narrow interests, such as increasing their own salaries or pursuing their own agendas.
 
It is especially unclear why the tax increase is needed when the state has a 2022 income tax surplus of almost $3 billion that it has to return to taxpayers.
 
To read the full report in PDF format, please Click Here
 
Please let me know if you have any questions about BBIS or the firm’s investment strategies, would like to be on our publication distribution list, or want to invest some funds with BBIS. Please also let me know if you are interested to learn more about BBIS' country investment analysis consulting services.
 
Thank you.
 
Best regards,

Vitaly Veksler, CFA
CEO & Portfolio Manager
Beyond Borders Investment Strategies, LLC
vveksler@bbistrategies.com