BusinessWeek has an interesting cover story on how, in the search for higher returns, investors are assuming greater risks and investing in markets like Colombia:
Call them extreme emerging markets… In this parallel investing universe, price-earnings ratios take a backseat to fuzzy measures such as confianza, which translates into confidence and trust but is more accurately described as the general sense that people can safely transact business and get through everyday life unharmed. The handful of Wall Street analysts who cover Colombia supply their clients with charts of murder rates and kidnappings… “I guarantee that if you graph the decline in kidnappings to investment gains, the correlation would be one-to-one,” says Ben M. Laidler, head of Andean research for UBS Pactual.
It prompted my curiousity to look up per capita murder rates by country on NationMaster, and sure enough - Colombia ranks as #1 (though this data is only updated through 2000… I’d bet Iraq is up there today, sadly).
It turns out that Colombia’s murder per capita rate is 0.618 per 1,000 people for the period of 1998 - 2000, compared to the United State’s 0.0428 per 1,000 people, or 14.5x as high.
0 responses so far ↓
There are no comments yet...Kick things off by filling out the form below.
Leave a Comment