You can be both exotic and making money

I must say I’m a lucky one as in my early years I got some chance to spend significant time in many different countries across continents. It is life enriching experiences I deeply benefited from and has helped me to open up my mind and shape up my views from a wide perspective. One of the areas is the Middle East, the Arabic world. 🌍It was really an exotic area, totally different from what I was used to in terms of culture, religion, convention and anything else. For example, back then about 30 years ago it was the first time I ever heard and witnessed a sacred Islamic season, Ramadan.  During the entire month of Ramadan, Muslims are obligated to fast. every day from dawn to sunset. Fasting requires the abstinence from food, drink or even smoking..... So during the day time, my Islamic friends were basically dozing without eating and drinking anything as they didn’t sleep much during the night in order to get enough food and drinks before dawn. I knew a friend from Iran, who was an easy-going, sturdy but simple-minded man. He smoked a lot and apparently very much addicted to it. But amazingly during the Ramadan, he just stopped smoking during the day. Since we got along very well, I sometimes made escapade to tease him. One day, I shook him awake and said: Hi buddy, wake up and it’s time to take a cigarette! He opened his puffy dozing eyes but then answered firmly: No! I said, “But who would know you take a cigarette as there is no one around and I’d not tell anyone!” He replied “Allah is watching me!” That’s the religious power as I clearly saw he was struggling a lot from the nicotine addiction but he was sticking to his principle!

So why I’m talking about this here? Well, I have got a unique investment idea that is quite exotic but will likely make you some money from it, if you can go out of your limb and be open-minded a bit! I’m talking about buying stocks from the Arabic world, more specifically the Saudi Arabia market! I’m pretty sure everyone has heard SA and many have gone there although I personally haven’t yet been there. It is a very closed traditional Islamic country, the biggest oil exporting country and also the leader of the oil exporting organization, OPEC. So why it is exotic as it seems everyone knows about it. Well I don’t think many of you really know that not a long ago no one except SA citizens could buy and own SA stocks. Actually it was only less 3 years ago (Jun 2015) that SA decided to open its market for foreigners to buy and trade. So buying SA stocks is not something as easy and granted as for others. But merely opening its stock market is not necessarily a good reason to buy their stocks, Actually there are two major catalysts that I believe will drive SA stocks much higher in the future. For one, probably most of you don’t know that SA has a plan called Vision 2030. It aims to transform the country into a global investment hub. To meet its ambitious objectives, the SA government is implementing policies to empower the private sector, introduce fiscal reforms, encourage foreign investment and boost non-oil revenues. After all, solely relying on oil as its major source of revenues is not sustainable anymore. They understand this and wants to fundamentally change its course. This has set up a fundamentally bullish ground that should boost its stock market as a whole. Then more directly to the stock market, half a year ago, MSCI granted Saudi Arabia Emerging Market status as a reward for its efforts to modernize its economy. This will become effective in mid-2019. What does this mean? It means SA stocks will be added into the MSCI Emerging Markets Index and will become the third-largest MSCI country following the Europe, Middle East and Africa (EMEA) region. This could be a tsunami effect for SA stocks, folks! If you still don’t understand what will be coming for SA stocks, here is the takeaway. It basically means that every MSCI index tracking fund on this globe will have to invest in SA stocks (of course limited to those invested by the MSCI index). There is a Middle East investment banking, called EFG Hermes.  According to its estimate, there could be as much as $30 billion to $45 billion flown into such SA stocks within the next two years due to this MSCI EEI effect! Last week, I was talking about the bullish trend for Emerging Markets and this is part of my overall theme on this front. So if there is an easy way to buy SA stocks? You bet! Nowadays, ETFs can do virtually anything you can think about. There is one specific to the SA market, iShares MSCI Saudi Arabia ETF (KSA). You don’t need to take an exotic trip to go SA to buy their stocks. Actually KSA has already significantly outperformed the US stocks in the past year, many times better more precisely as shown in the chart below. KSA is trading all time highs while S&P is still struggling in the water at the moment. But always remember, doing things more exotic is often associated with more unexpected risks. Same here and don't blame me for not warning you upfront!😎