Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Tesla Robo Taxis are Coming THIS YEAR! - 16th June 24
Will NVDA Crash the Market? - 16th June 24
Inflation Is Dead! Or Is It? - 16th June 24
Investors Are Forever Blowing Bubbles - 16th June 24
Stock Market Investor Sentiment - 8th June 24
S&P 494 Stocks Then & Now - 8th June 24
As Stocks Bears Begin To Hibernate, It's Now Time To Worry About A Bear Market - 8th June 24
Gold, Silver and Crypto | How Charts Look Before US Dollar Meltdown - 8th June 24
Gold & Silver Get Slammed on Positive Economic Reports - 8th June 24
Gold Summer Doldrums - 8th June 24
S&P USD Correction - 7th June 24
Israel's Smoke and Mirrors Fake War on Gaza - 7th June 24
US Banking Crisis 2024 That No One Is Paying Attention To - 7th June 24
The Fed Leads and the Market Follows? It's a Big Fat MYTH - 7th June 24
How Much Gold Is There In the World? - 7th June 24
Is There a Financial Crisis Bubbling Under the Surface? - 7th June 24
Bitcoin Trend Forecast, Crypto's Exit Strategy - 31st May 24
Zimbabwe Officials Already Looking to Inflate New Gold-Backed Currency - 31st May 24
India Silver Imports Have Already Topped 2023 Total - 31st May 24
Gold Has Done Its Job – Isn’t That Enough? - 31st May 24
Gold Stocks Catching Up - 31st May 24
Time to take the RED Pill - 28th May 24
US Economy Slowing Slipping into Recession, But Not There Yet - 28th May 24
Gold vs. Silver – Very Important Medium-term Signal - 28th May 24
Is Gold Price Heading to $2,275 - 2,280? - 28th May 24
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Emerging Markets Investing 2010, Colombia Is Open for Business

Stock-Markets / Emerging Markets Feb 16, 2010 - 07:42 PM GMT

By: David_Galland

Stock-Markets

Best Financial Markets Analysis ArticleFollowing a recent group email exchange with Louis James, the truly tireless editor of Casey’s International Speculator currently kicking rocks in Colombia, one of the non-Casey Research participants in the exchange commented, “You guys are doing it right. How many research shops have emails that start out with ‘Greetings from Medellin’?”

This is not Louis’s first trip to Colombia but just one of many. This time he is there to update his notes on what’s going on down there, now that some semblance of political stability has reignited interest on the part of large and small exploration/mining companies alike in Colombia’s rich mineral endowment.


The Colombian economy, with its free-market approach, has fared better than its Latin American neighbors, and foreign investment is starting to flow in. In 2009, President Uribe attracted US$8.6 billion gross foreign direct investment (FDI).

As you can see in the chart below, more than 30% of total 2009 FDI in Colombia was in the mining and nearly as much in the oil sector.

I asked Louis to share his impressions on how the security situation has changed in the country over the past four years or so that he has been traveling there. During the early trips, he had military escorts and private bodyguards accompanying him into the bush for his explorations. So, how do things stand now?

Here’s his report…

Hola, Oddly enough, where the mountains were once the guerillas' strongholds, now they are relatively safe. Basically, where there's good infrastructure, the army can deploy easily and the rebels don't stand a chance. Up by Ventana and Greystar, I'm told, some 300 guerillas were cornered and wiped out to the last man. No prisoners in this war. So, they have been pushed out into the most remote regions, which are out on the jungle plains where there are no roads. One project I wanted to see is on the edge of those plains to the west, and the company politely said it was not yet safe... but that there's a new army base nearby, so in time, the violence will move away.

Medellin is a much nicer and more modern city than most expect. There's a modern urban rail system, linked by gondolas, like big ski lifts. Lots of new high-tech architecture, and the city is relatively clean and well-kept for a large (4M) Latin American city. But all the nice buildings have gates and security, of course.

I don't think I took any undue risks on this trip. I did have a military escort one day, but it might have been more for show. (I'm more concerned about my trip to the Philippines next week – a friend of mine with a Filipina wife tells me his family won't let him go where I'm going.) The Colombians I speak with are much more relaxed and so happy La Violencia is over for them.

Every time I come here, I like the place more and more for investment. I was told today that Colombia has never nationalized any private enterprise, and you know, for all its troubles, I can't remember a time when it did. I was also told Colombia has never defaulted on debt payments, etc., and I can't recall an instance of that, either. I've asked a new friend who works for a Colombian brokerage house for confirmation of these facts, which seem very significant to me, as they suggest that the current boom isn't just because of Uribe's personal values, but because his values are echoed by many Colombians.

I just came back from a dinner at which several key Colombian players were present. They were commenting on all the Johnny-come-latelies flocking to the area, and how many were picking up projects in parts of Colombia that are still dangerous.

It occurs to me that if one of these fools goes into an area where there's still guerilla activity and gets himself or one of his geologists kidnapped or killed, it could scare investors away from all Colombia plays.

I'm not sure that there's anything that can be done about that, and the longer nothing happens, the better, as the guerilla activity continues melting away. But for a while, all Colombia plays could face a sudden and serious drop in share price if some Vancouverite wins a Darwin Award down here.

I'm going to the Philippines to see a new low-cost, high-grade producer I've been looking at for some time, and another development story, but mostly to get a feel for the current realities of mining and exploration in the Philippines. It's just me, not a big tour bus full of hotshots, making the trip, so I shouldn't attract undue attention.

I'll keep my eyes open and, of course, have more to say in our publications soon...

The opportunities in the junior resource sector can be truly stunning, with overnight triple-digit gains not unusual. But any sector that can go up that much can fall back just as sharply – so thorough due diligence is essential.

The good news is that if you do the homework, you can eliminate much of the risks, giving yourself a much better shot at the upside. But there is nothing easy or simple about the process – which is why Louis and other researchers on the team are on the road more or less constantly.

Fortunately, you don’t need to travel to the jungles of Colombia or the Philippines to profit from the best resource plays in the world. Read more here

© 2010 Copyright Casey Research - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in