Chavez, in all his economic wisdom has brought on over 28% inflation and counting in addition to the Currency Market Takeover Spurs Lines for Dollars. All this wonderful news led me to search for Venezuelan ADR's (American Depository Receipts) in case I wanted to follow the market there, and make a contrarian play, or if I really wanted to get wild short something.
Alas, shorting would have been the right move, however, the opportunity has passed. The national economic constraints have had the impact of removing all the Venezuelan ADR's from our exchanges.
The best prospect and largest player formerly available, and still so on the Venezuelan exchange, was CA Nacional Telefonos de Venezuela. Last May they had to stop paying a dividend and are having major problems doing business without access to appropriate levels of capital.
If Chavez ever takes his boot off the chest of the economy perhaps this company might reappear and become a real opportunity for growth. For investors looking for yield and foreign exposure I have already suggested many telecoms. When I first directed reader attention to Telefonica (TEF) (also last May), it was trading at $56.66, now $18.89 split adjusted 3:1. The stock has appreciated to $24.75 in mid-day trading. That is a cash on cash return of 31% (41% annualized). You can read more about it here Chasing Value: 2011 Picks Dust the S&P.
Back in March I pointed to Chasing Value: Over 10% Yield Down Under -- Telecom New Zealand and in December Telstra Corp LTD (TLSYY), see Chasing Value: Don't Be Happy -- Worry! . to learn about the Australian telephone company -- all are up.
World wide we have been witnessing the rapid and continuous expansion of communications, except for the unfortunate recent events in Libya where they have been shut down. And they will not be opened up again until Muammar Gaddafi is gone. I would not believe a word he says about becoming a martyr. From my perspective he is just delaying the inevitable, stalling for time while planning his getaway. I can't help wondering if the two Libyan fighter pilots that refused to bomb their own people and requested asylum in Malta regret not leaving Gaddafi with an air express package on the way out.
I hypothesized about these types of events when I posted a four part series beginning with Chasing Value: You Must Own Defense and Oil for Safety. I think this is still true, and will be so for the year, the decade, and perhaps beyond.
Sheldon Liber is an architect and the CEO of Chasing Value ™ Asset Management, Inc., a small private investment company. He writes the columns Chasing Value™ and Serious Money and is on twitter: @ChasingValue. Disclosure: Mr. Liber owns shares and/or options in all of the stocks mentioned.