| I'll offer a prediction on the other side: the ANC will win, but
there will be substantial unrest (mostly black-vs-black). The level
of violence will continue to stay high, and outside investors
will prefer to invest elsewhere. Having won, the ANC will find
itself trapped: the population expects a significant improvement
in their lives, but there isn't enough money.
Young, educated whites will leave. Taxes will go up. South Africa
will start a long slide downward, with democratic government,
convertibility of money and exportability of capital some of the
early casulties of the slide.
I say this based on the examples of Rhodesia/Zimbwabwe, Mozambique,
Angola, Kenya and Uganda: all recently controlled by a minority with
European roots, all now having slid.
Having said that, there are ways to play the long side of South
Africa: ASA is a closed-end fund specializing in gold, there are
lots of gold funds with varying percents of South African stocks,
and I've read of stocks in other mining sectors (platinum). I'd
guess that low-end consumer goods companies might do well (beer,
snack food, radios, t-shirts, cigarettes--the stuff poor people
around the world buy when they have spare cash), but I don't know
of any companies to suggest. On the other hand, outside companies
of that sort will be doing some inward investment, so you might
look at companies like Coca-Cola and Avon as having a slight
South African component.
-John Bishop
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| SA is a hard pick, as many funds deliberately don't buy into
that country (remember the big "divestment" push about five
years ago?). Other than gold funds, it may be hard to find
any way to do what the author of .0 wants to do.
Last night I happened to be reading the semi-annual report
from Montgomery, and scanned the listing of investments of
their three international funds. Not one South African
investment did I find, despite the size of that economy.
They had Peru and Bolivia, but not South Africa!
-John Bishop
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