Invest Alongside Soros and the Biggest Chinese Banks

Video Transcript

Hi, this is Monty Agarwal for Uncommon Wisdom Daily.

I’ve been saying for a while now that one of the biggest growth opportunities in the world over the next decade is in Africa. Africa has already outperformed the developed and emerging markets, including the BRIC nations of Brazil, Russia, India and China, over the past decade.

And China is already laying its foundation in Africa’s frontier market — a move that one Chinese bank says will result in a decade-long honeymoon period between the two.

And it’s not just China that sees great opportunity in Africa. George Soros called the continent a “very attractive area to invest in.” And The Economist magazine wrote that “After decades of slow growth, Africa has a real chance to follow in the footsteps of Asia.”

You may have heard some experts warn that investing in Africa comes with larger-than-normal risk. But that’s actually not true at all. According to the Nobel Prize-winning Sharpe ratio, Africa has had lower risk, relative to its achieved returns, than any region on Earth over the past decade.

In addition, capital flows into Africa have been steadily increasing, surpassing the amount of money flowing into India, Brazil or Russia. And these numbers are making for some excited chatter in institutional money circles.

It’s not hard to guess why so many smart investors are so high on Africa right now. The continent is home to 13% of global oil reserves, 50% of the world’s proven gold reserves, 50% of its proven iron ore reserves, 60% of its cobalt and 90% of platinum group reserves.

According to The Economist, from 2000 through 2008, 25% of Africa’s growth came from increased revenues from natural resources. And China’s involvement continues to grow. Last year, African exports to China totaled $93 billion, and trade between the two regions reached $160 billion.

China is investing in infrastructure to help Africa develop its natural resources, but China is also trying to improve the quality of life for Africa’s middle class, and develop that consumer market for Chinese-made goods.

But the question is, how does an individual U.S. investor take advantage of this profit opportunity? Besides mining stocks, the best areas for investment are Basic Materials, Financials and Consumer Cyclicals, especially in the budding markets of sub-Saharan Africa.

In particular, keep an eye on development projects such as the $80 billion Grand Inga Dam, which will have a capacity nearly double that of the current largest dam in the world. It’s projects such as these that will boost standards of living and consumer markets across the continent.

Members of my Rapid-Growth Portfolio are getting even more specific recommendations for low-volatility, high-potential African plays designed to take advantage of these powerful trends. And I believe there are loads more profits to be made in this frontier market.

I’m Monty Agarwal for Uncommon Wisdom Daily. Thanks for watching.

Monty Agarwal has 15 years of experience as a portfolio manager in the hedge fund industry and has trained/managed traders at many Wall Street banks and hedge funds.

And as the editor of the Million-Dollar Rapid Growth Portfolio service here at Weiss, he uses the hedge fund world's best strategies to help his members make low-volatility, high-profit-potential moves in their own account.