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The Most Expensive City in the World is in…Angola?

“Cost of living” can be a relative term, as I’ve discovered in my time in Peru (see “Investment Insights from a Peruvian Beach“).  Yes, in Lima I could hypothetically live on a small fraction of what I pay here in Dallas, but there is a difference between living and living well.  Living in one of  Lima’s chic neighorhoods, with all the assorted lifestyle trappings, would actually be more expensive than my current living expenses in Dallas.

Still, I was shocked by CNN’s recent listing of most expensive cities for an American to live.  The usual suspects made the list: Hong Kong, Singapore, Zurich, etc.

But the two most expensive cities on the list were Luanda, Angola and N’Djamena, Chad.

Angola? …and Chad??

In Luanda a club sandwich and Coke will run you nearly $20, and a two-bedroom apartment will set you back $6600 per month.  And this in a country with a GDP per capita of just $6,300.  And even this is skewed by oil wealth; most Angolans survive on far less.

So…what’s the story here?

It’s really quite simple.  While locals live modestly, you can’t reasonably live like a local.  In order to live in Angola safely, you need security and have to import items you might normally take for granted.

Check out the slideshow if you found this as interesting as I did: 10 Most Expensive Cities.

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Sharia Compliant Investing In…Brazil?

ThinkAdvisor ran a piece this morning on Banco do Brasil’s latest offering: a Sharia-compliant stock fund.  That’s right, Brazil–a mostly Catholic country in South America–is launching a stock fund that complies with Koranic prohibitions on the payment of interest and on pork products, among other restrictions.  I contributed my thoughts on the subject to the article:

Regarding the tough slog that sharia-compliant investing has often had in the U.S., Charles Sizemore, a portfolio manager for online investing marketplace Covestor, said, “This tends to be a politically charged issue, particularly in the 13 years that have passed since the 9/11 attacks by Al Queda, But it really doesn’t need to be. It’s a marketing gimmick to differentiate an investment product from the competition in the eyes of strictly observant Muslim investors. And this is nothing new in the West.”

Sizemore said, “London competes with Dubai as the center of ‘Islamic finance’ despite being a Western Christian country on the northwestern fringe of Europe. Britain has gone so far as to announce its intent to launch sharia-compliant ‘sukuk’ bonds. And if you want to go really far back in time, during the days of the Caliphate Jewish and Christian merchants in the Middle East and Asia often engaged in Islamic contracts, even between each other, because of their universal enforceability in Muslim lands.” [See "The Long Divergence" for a history of Islamic business structures and for an explanation of why the coporate structure evolved in the West rather than the Islamic world.  Partnerships are specifically sanctioned in Islamic law, but the rules are very specific and favor small, short-lived entities rather than permanent going concerns.]

It may seem a little weird for Western countries to adhere to Muslim financial regulation, but countries often have legitimate reasons for agreeing to foreign terms.  Turning more broadly to emerging markets:

“[M]ore recently, emerging markets agree to ‘Western’ terms when raising capital because doing so reduces their borrowing costs, though this sometimes has unintended consequences. Consider the recent case of Argentina and its creditors duking it out in the U.S. court system rather than the Argentine court system. It may be distasteful to many Westerners, but if it lowers the cost of capital, it’s hard to argue against it too vigorously.”


Charles Lewis Sizemore, CFA, is the editor of Macro Trend Investor and chief investment officer of the investment firm Sizemore Capital Management. Click here to receive his FREE weekly e-letter covering top market insights, trends, and the best stocks and ETFs to profit from today’s best global value plays. 

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¡Viva San Fermin!


Perhaps I’m just getting nostalgic with age, but there is something magical about Pamplona’s annual festival.  Cities and towns scattered across the Spanish-speaking world have their own running of the bulls, but there is only one San Fermin.

My neighbors probably hate me, but I take down my American stars and stripes a few days after July 4 and, from July 7 – 14, fly either the Basque  ikurriña or the Spanish Osborne bull flag you often see at Spanish soccer games.



It’s a reminder to me that it’s healthy at times to be a little bit reckless.  I will never run with the bulls again; I’m about ten years too old for that now, and couldn’t stand the thought of my wife having to explain to my two sons that their imbecilic father was gored or trampled to death in a sad attempt to recapture his youth.  (Incidentally, the fiesta just reported its first goring this morning.)

But I’ll never forget how it felt, in July of 2004, and how my legs wobbled afterwards from the surge of adrenaline.

Best wishes to all the fermines this week, and let me pass on one piece of advice:

The path that the bulls take makes a sort of “Z” shape. You absolutely DO NOT want to run near the two bends in the Z.  Bulls, like battleships, cannot turn on a dime, and the animals tend to slip and fall down at those turns.  That is when they get dangerous.  When the bulls are running as a herd, there are not particularly dangerous unless you happen to fall down in front of them.  But when a bull gets separated from the herd, he gets disoriented…and angry.  So, when the bulls slip at the bends in the Z, that is when they lash out and gore anything in site.

The best place to run is in the final straightaway, as by that point the bulls have reformed their herd and the street is a little wider, given you more places to jump and hide if need be.

¡Viva San Fermin!

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4th of July: Brought To You By China

Global research firm Panjiva published a great infographic to ponder at your 4th of July cookout.  IndependenceDayChina

China, by a landslide, is the biggest exporter of American flags and fireworks, at 85% and 99%, respectively. Interestingly, South Africa is the next biggest exporter of both, at 7% and 1%, respectively. India is the only other significant exporter of America flags, at 4%, and there are no other significant exporters of fireworks.

Now, a couple points need clarifying.  These are exports and not total production.  And there is only one significant buyer for American flags: the United States of America.  So, while there are plenty of American flags made right here in the good ol’ US of A, they are all made for domestic use, not export.

Another way to interpret this chart would be that Americans are so patriotic and enjoy flying the stars and stripes so much this time of year, we cannot make enough domestically to satisfy demand and thus have to import from China, South Africa and India.

To all my American readers, have a safe and happy Independence Day with your families.



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