CASSH v. PIIGS and BRICs

One advisor thinks it's time to find another investing universe.

WASHINGTON, December 3, 2012 – Our market pattern seems ready to continue today. Stocks had a negative time with it Friday as despair clouded the atmosphere over the worry that fiscal cliff talks were going nowhere. Apparently, Treasury Secretary Tim Geithner said nice things over the weekend, however, and voilà! Markets look to make a big upmove this morning. Or not. As always these days, high-speed computers, which treat news headlines like tea leaves, will drive the trading. Nobody else is home. But according to CNN, a Blackrock investment chief has the perfect solution to this nonsense. Stay in CASSH. 

No, grammar trolls, that’s not a typo. Take a step down memory lane—not a very big one—and you’ll recall that the investment world hates PIIGS—Portugal, Ireland, Italy, Greece, and Spain—for their entirely trashed financial systems. But they love (sometimes) the BRICs—Brazil, Russia, India, and China—for their occasionally realized growth potential. And now, according to Russ Koesterich of asset manager and ETF creator Blackrock, they should embrace the latest big thing: CASSH.

CASSH is Koesterich’s, umm, coinage for what he regards as stable, safe growth countries, which include Canada, Australia, Singapore, Switzerland, and Hong Kong. Makes sense in more ways than one. First of all, what Koesterich is pitching should be intuitively obvious by now to any investor who’s managed thus far to endure the market’s endless thrashing about to date. 

While nobody is exactly prospering these days, the banking systems and finances of Koesterich’s CASSH countries/locales have remained rational through the ongoing and endless debacle that’s now become Great Depression II in much of the Western world. Singapore, Switzerland, and Hong Kong—the latter obviously part of China but functioning with its own currency (the Hong Kong dollar) and banking system—are still running smoothly and prosperously due to their stability.

Canada and Australia don’t run far behind in that regard, but may be slightly more risky due to their heavy dependence on natural resources as drivers for their respective economies. That said, there’s a good argument to be made for these markets, particularly in light of what’s going on everywhere else. 

Of course, if you live in the U.S., it’s been a little tough to invest in foreign markets like these until fairly recently. But now we now have a representative batch of ETFs that will get you involved in a basket of stocks in each of the CASSH countries: symbols EWC (Canada), EWA (Australia), EWS (Singapore), EWL (Switzerland), and EWH (Hong Kong). 

Which, in a way, might indicate a second reason behind Koesterich’s pitch. Although we don’t exactly remember the date, it was relatively recently that BlackRock ponied up a huge amount of money to purchase the iShares ETF combine from Barclays. And guess who’s marketing all those CASSH ETFs we just mentioned? Yup, BlackRock. Koesterich’s CASSH ETFs are all iShares products. It’s always good to remember that anyone who’s touting investments on Wall Street probably has a pony in the barn he’s selling. 

Dramatic photo of Hong Kong at night. Their financial system dazzles like this, too.

That said, the Maven has been in and out of a number of these CASSH ETFs in mostly profitable transactions. In fact, one of the Maven’s longer term holdings has been EWC as it’s a way of investing in much of what’s good in North America without having to deal with the crap that the U.S. markets have become. 

Also, interestingly, one of our investment services has recommended getting into EWA again, after jumping out awhile ago as natural resources—a key to any Australian investment—began to drop. And if you think about it, since Koesterich is enamored of almost-country Hong Kong, it mightn’t be out of line to consider another somewhat anomalous country that everybody used to think of as “Free China”: Taiwan. Its stable and excellent economy, though occasionally perturbed by its ongoing tiff with the Chicoms, is humming along as well. And BlackRock has an ETF for you there as well: EWT. 

Although our own market is likely to soar this morning, things will still yo-yo along depending on which politician opens his positive or negative trap on any given morning or afternoon. Meanwhile, although we’re not necessarily recommending them, Koesterich’s CASSH stocks and ETFs certainly look less manipulable these days than the NYSE darlings of the HFTs and algos. They might be a good place to park dollars while everything else is being shamelessly gamed. 

Good luck, and G’Day Mate. And let’s see what all the people we recently re-elected do to our portfolios this week. 

Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate. Stock investments currently include positions mentioned in recent articles including IAU, SLV, and EWC.

Any positions mentioned above describe this author’s own investment decisions and should not be construed as either buy or sell recommendations. The current market is highly treacherous and all investors travel at their own risk, so caution should be exercised at all times.

Illustrations, charts, commentary, and analysis are only the author’s view of current or historical market activity and don’t constitute a recommendation to buy or sell any security or contract. Views, indications, and analysis aren’t necessarily predictive of any future market or government action. Rather they indicate the author’s opinion as to a range of possibilities that may occur going forward.

References to other reporters, analysts, pundits, or commentators are illustrative only and do not necessarily represent an endorsement of such individuals’ points of view. If specific investment vehicles are mentioned in any article under this column heading, the author will always fully disclose any active or contemplated investments in said vehicles.

 

Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing and political insights, visit his Communities columns, The Prudent Man and Morning Market Maven, in Business.

Follow Terry on Twitter @terryp17

 


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Terry Ponick

Now writing on investing, politics, music, movies and theater for the Washington Times Communities, Terry was formerly the longtime music and culture critic for the Washington Times print edition (1994-2009) before moving online with Communities in 2010.  

 

 

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