Friday, November 9, 2012


HARVARD ENDOWMENT FUND IS INVESTING IN AGRICULTURE------By Shan Saeed

STRATEGIC INSIGHT ABOUT THE ENDOWMENT WORKING
It would be surprising for many investors/readers/people in general. Harvard Management Company, the endowment fund of Harvard University is investing in farmland in New Zealand and other Real Estate projects globally. The total fund stands at $30 billion in which 10% portfolio has hit the Real Estate allocation in farmland. For some people Harvard University endowment works in secret environment and nobody knows the amount of investment it is making globally.  Indeed, the entire crew at Harvard Management Company is routinely described as “secretive” and “tight-lipped.” It uses its status as a non-profit to keep its dealings as hush-hush as possible.  Not even the students know how it operates or where it invests. But I got this information from my networking who is an alumni of Harvard Business School with strong inside connections. The school's student magazine, The Crimson, recently noted: “The managers operate behind a veil of secrecy under the pretext of losing competitive financial advantage.”
They certainly have an advantage. The fund has tens of billions more under management than the next closest fund over at Yale. It raises more money than any other non-profit in the United States. And it does so with zero fundraising expenses, so people are literally throwing money at it. Why not? It's returned an average 12.9% for the past two decades — far better than the average return of the Dow, S&P, or NASDAQ. However, Harvard Endowment lost the highest money among the major endowments during the financial market crisis running from 2007 to 2009.  In the modern era of information, nothing stays secret for long. And if you look closely enough, over the past few years, some of this fund's secrets have started to be revealed...
Endowment has become Land Barons: New financial investors
HARVARD ENDOWMENT IS GOING TO NEW ZEALAND------INSIDE STORY
Harvard Management Company bought over 400,000 acres of the Kaingaroa forestry estate in New Zealand in 2003. Though the price wasn't disclosed, it's rumored to have sold for over $800 million. The question is why New Zealand. Since one of the alumnus who is a Kiwi and handles the funds has taken this position in the farmland in New Zealand. It helped that Andy Wiltshire was from New Zealand and had worked for the New Zealand Forest Service, which originally developed the Kaingaroa Plantation. He also went to school with the CEO of Kaingaroa Timberlands. After that investment, Harvard set its sights on Maniototo's Big Sky Dairy Farm, New Zealand's first “superfarm” with 6,000 cows on 4,000 acres. Financialization of commodities is happening now as big financial investors are taking position in this new asset class for wealth preservation and protection  
RATE OF RETURN FOR ENDOWMENT
The bets have paid off nicely: Last year the portion of Harvard's portfolio that owns real estate posted an 18.8% return. Meanwhile, major market indices only posted a 5% return. Already this year, the fund has made a $4.0 million profit on the dairy farm alone. And the party is just getting started. Under Wiltshire's watch, forests, farms, and other real estate have grown to 10% of Harvard's portfolio, over $3 billion. Of course, making lucrative profits on billion-dollar investments isn't hard when you run in the same circles as Harvard alumni.
Many of the funds it manages come from wealthy graduates — a list that includes countless heads of state, congressmen, governors, Nobel and Pulitzer winners, and chief executives. Names like Obama, Romney, and Bernanke are all on the list.
IN THE HARVARD CLUB, OUT OF THE MARKET PLAYERS.
The Harvard Management Company ['management' and 'company' certainly aren't nonprofit words] is definitely “in the club.” It shares an office with the Federal Reserve Bank in Boston — the same building from which Jane Mendillo, head of the fund, gave a rare interview this year that offered some insight into their strategy...According to her, what is she looking for in property deals that produce something that the world is going to want more of, and the increase in the supply is difficult. Makes sense to many potential investors.
NETWORKING IS THE KEY IN THE END:
Harvard endowment fund people rub elbows gives it a distinct advantage. A lot of other investors don't have the expertise, don't have the team to go out and look at individual [real estate opportunities]...”Armed with that expertise, Harvard is the first endowment fund to directly buy real estate outside of the United States.
After it became one of the largest foreign landholders in New Zealand, it bought the majority of a company that's one of the largest landholders in Romania, with over 86,000 acres. Most recently, it bought three huge farms in Brazil. And here's the most important thing in all of this: These are investments you and I typically can't be a part of. These investments are for Ivy League people only. There's an Ivy League/Insider velvet rope. They aren't delivering monster returns by investing in publicly-traded land ETFs or real estate funds. They know that stuff's for us underlings. No, they buy the assets directly and manage them themselves...And this is their key to success: They play the insider game.
JIM ROGERS FAMOUS WORDS: FUND MANAGERS WOULD BE ACTING LIKE FARM MANAGERS
I had the pleasure of meeting Jim Rogers in Singapore and London who shared an investment advice for the next 5-10 years. Become a FARMER. I have penned down in one of my articles published in Investors Guide Magazine: http://investorguide360.com/aig/press-release/agriculture-is-the-best-investment-for-the-next-5-10-years-by-shan-saeed/

BLOOMBERG REPORTED
According to Bloomberg in September-2012, “It was Harvard’s early and enthusiastic embrace of alternative assets such as private equity and hedge funds that turned it into one of the top performers among endowments.” For too long, surefire investments like these have been off the table for everyday folks, reserved instead for Ivy League graduates and their cocktail party buddies. In recent years, there have been thrown some scraps as similar funds, like The Carlyle Group (NASDAQ: CG), Blackstone (NYSE: BX), and Kohlberg Kravis Roberts (NYSE: KKR), have taken a portion of their assets public.
But you don't get to profit directly from their deals. You still have to buy a stock and be at the whim of the market. While the heads of those firms and the people they make deals with have undoubtedly made billions this year, each of those stocks is only up between 5% and 15%.
The key to investing and profiting like these funds is not to own a piece of the fund — but to do the same kind of deals they do on your own. It's something I've spent a great deal of time researching lately. And I have found a way for people like us to do it without having been introduced to a senator or private equity billionaire...You see, there's an overlooked way you can make real estate investments just like these top-notch people do — without buying a single share of a public company. They are private deals with extraordinarily high returns and they are available to people now It may not get you in their club, but it will allow you to similarly profit without touching the actual stock market.
Disclaimer: This is just a research piece and not an investment advice. All financial transactions carry a RISK

Tuesday, November 6, 2012



CHINA IS THE GOLD POWER HOUSE----------By Shan Saeed

WEST VS EAST MIND SET. INDEPTH ANALYSIS
People are selling Gold and Silver in the west. In the east, investors and people are only buying Gold and Silver for wealth protection. Recent views and market indication, all reveal, investors have built their trust in Gold and Silver for wealth preservation and financial repression. China is the world’s largest gold producer. Align your strategy with Chinese yuan and PAGE i.e. Pan Asian Gold Exchange set up in June 2012 to make sustainable revenues going forward. Gold is a classy strategic asset for the rich people to stay rich. Gold is not for every investor.

GOLD PRODUCTION CHART OF 2011

Countries                    Gold production in Metric Tons
China                                       355
Australia                                  270
USA                                        237
Russia                                      200
South Africa                           190
Peru                                         150
Canada                                                110
Indonesia                                100
Ghana                                      100
Uzbekistan                               90
Mexico                                     85
Papua New Guinea                   70
Brazil                                         50
Chile                                          45
Mongolia                                   27

Sources : US Geological Data -2012,   
World Gold Council, 
 IMF  & Economist magazine

ROMANCE IN LUXEMBOURG
China has made her intentions very clear after she did not get a good response from London financial center to trade its transactions to choose Luxembourg as the next best destination for economic growth and emergence of the new Chinese era of financial innovation with European pioneers.  According to Financial Times and Wall Street Journal newspapers, British regulators are not impressed by Chinese way of accounting and style of leadership in banking industry. So many big chinese financial institutions are relocating to a new found love in Luxembourg. Luxembourg would provide an ideal platform to execute Chinese presence and make China’s next financial hub globally. China will trade Gold, Oil, Silver, Copper, Agri –commodities and everything under the sun in the heart of Europe i.e. Luxembourg.

GOLD BULLION MARKET

And yet – according to some experts and reliable sources – gold bullion brokers have not seen any gold coming from China. In other words, China is producing more gold than any other country, but isn’t exporting any of it.  In addition, china is importing huge quantity of Gold from Africa, Australia and Indonesia. As such, China is quietly becoming a gold superpower. China has an excellent habit of being quiet for several years at a time, and then announcing big increases in gold holdings. So quoting old numbers will only mean that one is caught flat-footed as to China’s current holdings. Happy investing in the Gold market.

Disclaimer: This is just a research piece and not an investment advice. All financial transactions carry a RISK. 

Thursday, November 1, 2012


BREAKTHROUGH IN OIL TECHNOLOGY IN USA
By Shan Saeed

NEW TECHNOLOGY: STRATEGIC INSIGHT ABOUT THE OIL INDUSTRY
Major breakthrough has happened in the oil industry. The main players are excited with this cutting edge technology which heralds a new boom in the energy market. With all the talk about the fracking boom under way in the Bakken, Marcellus, and Eagle Ford, investors have not forgotten there are other earth-shattering drilling projects and technologies going on around the world.
NEW TECHNOLOGY: WELL PAD DRILLING
I have been sharing with my investors and people who are following me about this new technology coming 7 months back that's emerging in America's oil and gas-rich shale formations...It's called "well pad drilling," or "multi-well pad drilling. Multi-well pad drilling allows companies to drill four to ten wells on a single pad site.
Historically only one well was drilled on a pad site, but with the revolution in horizontal drilling, companies can spread out their drill bits from a single pad site — almost like tentacles of an octopus. It's estimated that multi-well pad drilling can double the recovery rate of oil in North America.
As American companies perfect horizontal drilling and hydraulic fracturing with multi-well pad drilling, another technology is quickly emerging on the scene. And it's being utilized by "old oil" companies... In fact, this method — called "extended-reach drilling" — recently helped Exxon destroy a record for drilling depth. From the Russian island Sakhalin (just north of Japan), Exxon drilled onshore wells to a depth of 12,376 meters. That's over 7.5 miles down into the earth.
MEDIA HYPED THIS TECHNOLOGY AS WELL
According to some media reports: Exxon, the world's largest oil company, has completed drilling the world's deepest well in the Chayvo oil field on the Sakhalin Shelf in the Russian Far East. The shaft of well Z-44 is 12,376 meters deep — the equivalent of 15 times the height of the world's tallest skyscraper, the Burj Khalifa in Dubai. This is a remarkable achievement, which furthers the successful implementation of the successful project.
Six of the world's ten deepest wells, including Z-44, have been drilled in Russia for the Sakhalin-1 project using ExxonMobil drilling technology — the so-called "fast drill," Russia companies are also moving forward on this very quickly.
Chayvo is one of the three Sakhalin-1 fields and is located off the northeast coast of Sakhalin Island in eastern Russia. The Sakhalin-1 project is being developed by an international consortium led by ENL, which holds a 30% stake, the Japanese SODECO (30%), India's ONGC Videsh Ltd (20%), and subsidiaries of Russian oil major Rosneft, RN Astra (8.5%) and Sakhalinmorneftegaz Shelf (11.5%). The total project is estimated to cost $12-$17 billion. The fields of Chayvo, Odoptu, and Arkutun-Dagi are estimated to yield 2.3 billion barrels of oil and 17.1 trillion cubic feet of natural gas. The total resource value of these three fields is estimated to be above $350 billion. But this is just the beginning...
Extended-reach drilling allows companies to go after reserves that were previously too costly and out of the reach of traditional drilling methods [sound familiar?]. In other words, oil reserves that have been known about for decades — but weren't produced because of economic and technology constraints — are now open for business.
Disclaimer: This is just a research piece and not an investment advice. All financial transactions carry a RISK