US contrarian investors looking hard at Arabia

The ArabianMoney mission to Vancouver to address the Agora Financial Investment Symposium proved not to be wasted time and effort after all with the famous US contrarians showing a big interest in investing in the region in general, and Dubai and the UAE in particular.

This is a tough audience to crack. They understand basic investment principles very thoroughly and have the minds of hedge fund managers. But then many of these individuals dressed in super casual gear are the original wolves in sheep’s’s clothes and are often personally worth a hedge fund-sized personal endowment.

Tax free country

There was therefore a ripple of astonishment in the audience as ArabianMoney newsletter publisher and editor Peter Cooper told them of a land where there is no Inland Revenue Service and no income or capital gains tax.

Most are too tied by family and national legislation to leave North America where the majority of attendees live, many of them enjoying a wealthy retirement. But they are all starting to look at how to diversify geographically with their investments, and the US Gulf allies are favorites as they come with US security protection.

Half of the readers of this website are from the United States. Perhaps there is more awareness about modern Arabia since the giant Emirates and Qatar Airways’ planes opened up direct routes to the region from the US.

UAE economy minister Sheikha Lubna Al Qasimi has also become well known in North America as exactly the symbol of freedom for women and high-tech innovation that people here appreciate.

Not surprisingly many Americans want a Middle East that is not about bombs, bullets and Iraq and Afghanistan, or the intractable conflict in Palestine. They can find it in a place like the United Arab Emirates which is the most liberal and open economy in the region.

Bargain stocks

They also liked to hear about a super-rich oil economy whose stock markets are trading at a very low valuation. Seeing the UAE bourses as a leveraged play on the future of oil is something that local investors have just become too pessimistic to appreciate. Agora investors love oil.

Perhaps it will take some foreign bargain hunters to wake the UAE markets up. However, this will probably not happen immediately as the Agora Symposium generally took a sanguine view of the outlook for global financial markets with more trouble on the horizon and much higher volatility going ahead.

For US investors that actually makes geographical diversification to stable US-dollar pegged jurisdictions in high growth economies even more compelling. Many have signed up to the ArabianMoney newsletter to get actionable investment ideas and it sounds as though many more will be joining them.