Cuba: An unheard opportunity?

Probably not many people may notice anything happening in Cuba. Under the strict long term economic sanctions imposed by the US as well as due to its own problems in its economic structure and policies, Cuba is no doubt a very poor and underdeveloped country in the world. However, you may have heard that Cuba has started its economic reform. A recently announced reform, I think, is revolutionary and may potentially make some smart early investors a lot of money.

On Nov 10, the Cuba government announced that effective immediately, Cuban citizens could buy and sell real estate on the open market. Do you know what this means? It is for the first time in 50 years! Simply think about what has happened in China with respect to the impact of housing on its whole economy. If you participated in this trend in China early enough, you would probably have had made many times of your money before it went into bubble. Eventually I also think Cuba will go into the bubble state as China, but this will be years later.

I don’t know there is any pure play specific to the Cuba companies. But there is an alternative, the Herzfeld Caribbean Basin Fund (Nasdaq: CUBA), a closed-ended fund loaded with tourism-oriented firms. This fund has its portfolio of travel, cruise, banking and telecom companies will benefit from any jump in Cuban tourism. Probably seeing the upcoming opportunities, it is also adding a small number of companies which are highly speculative in a pure Cuba business plan.