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Dear reader, Each month, we fill these pages with information on the many benefits of living or retiring outside the United States...as well as the practical details and advice you need to realize those benefits yourself and to take up residence in another country. However, we realize that you have questions about specific destinations, related to your own personal set of circumstances, that we can't answer completely in our issue coverage. Therefore, we have designed a program, a one-day crash course, intended to teach you everything you need to know if you're thinking about following your dream and arranging for retirement to your own personal retirement haven. Our new Overseas Retirement Seminar program covers all issues related to the idea of relocating to another country, including how to choose the right country for you, how to purchase real estate, how to navigate red tape related to residency, and how to arrange your personal financial affairs most tax-effectively. Our expert speakers include attorney Joel Nagel, a specialist in foreign residency and citizenship; and David Lesperance, who will discuss investment opportunities in our favorite retirement havens and the benefits of residency, even dual citizenship. I'll be on hand, of course, speaking specifically on the world's best real estate markets and opportunities right now and in each of the countries we find most attractive for Americans thinking of moving offshore. David Dell, who has lived and traveled extensively in many of the places we'll be considering, will speak about the pluses and minuses of each destination. We're planning to hold our series of daylong programs, first in Halifax, Nova Scotia (on Sept. 12), then in San Francisco (in November), in Phoenix (in February), in Atlanta (in April), and in Chicago (in May). If you have questions or would like further information, please contact Barbara Perriello in our Discovery Tour office at (561)243-6276. 1 hope to meet you at one of these very special events. Sincerely, Robert Fordi,
P.S. Below are dates for my remaining 1998 Global Real Estate Society Expeditions. I'm most excited about our first ever trip to Croatia, planned for October, and our also first time investment adventure in the Dominican Republic in November. If you'd like to join me, please contact me directly ROBERT FORDI'S PROPERTY PICK OF THE MONTH: ISLAND RENTAL PROPERTY FOR LESS THAN $100,000 For a completely finished hillside retreat overlooking the Dominican Republic's northern coast, head to Los Cerros, a desirable neighborhood near Sos6a, to Villa Fred. Offering ocean views, this tree-lined corner lot is improved by a duplex building featuring two two-bedroom, two-bathroom units. The asking price is $95,000, but I think a deal at $80,000 could be made. In this case, the owner may also be willing to offer financing terms. Rent one and keep the other open for your personal use. Contact Jim Belair, President, American Realty (located in Sos6a, EPS-D188, P.O. Box 02-5548, Miami, FL 33102, tel. (809) 571-3646, fax -2925, american. Realty @codetel. net do Presidential approval Up until very recently, approval for the purchase of any property of over 22,000 sq. ft. by a foreigner required direct presidential approval. However, this requirement has been recently lifted and there is no approval needed for the acquisition by a foreigner of property of any size. INVESTING MICROCHIPS OLE: RIDING THE MEXICAN SUPERHIGHWAY Our monthly pick is a small-cap high-tech firm. We've long longed for a computer distributor south of the border. Mexico has only three computers per 100 inhabitants, and 67% of the installed base is obsolete. The U.S. level is 30 computers/100. Mexico's market is small businesses, not homes. Our Mexican pre-ADR, now called DATACAPITAL S A de C V, now trades only on the Mexican intermediate bolsa. It will issue U.S. OTC ADRs in September. It will not issue capital, so there will be no dilution, just more visibility. When trading here, it will be renamed DATAFLUX S A de C V. Covering the market DATACAPITAL (current name) is in three businesses. The first is wholesale computer distribution in Mexico and Colombia for brands like IBM, Compaq, and HP. It is second to Ingram Micro in Mexico, with 19% of the market. It also offers value-added computers with to-order software and periferals via dealers throughout the country. This is a higher-margin business than wholesaling, although volumes are smaller. Its third business-the bonus surprise-is training young low- and middle-income youngsters in using computers and in English. The demographics here are compelling. Currently, wholesale accounts for 67% of sales and 47% of operating income. Dealers account for 70 % of the Mexican computer market, because inefficient credit cards, telecoms, and shipping mean the directsales Dell model doesn't work. The value-added business produces 30 % of sales and 35 % of operating income. It is growing 25 % a year. Manufacturers cannot sell directly to dealers, because the inefficient creditrating system means a network is hard to create. DATAFLUX assigns regions to dealers and has signed up 360 of them. And the high-margin schools, which Mexicans pay 99 pesos ($12) per week to attend, account for only 3 % of sales but for 18% of operating income. The target is 30 million young adults. There are no rivals, because other firms and the education system lack the capital to install an adequate computer base. This stock is a screaming bargain, at eight times 1997 earnings, or 5.8 times EBITDA. After a split, it trades at NMP 3.6-3.75. Despite the split (see below), the spread is not that wide. It was translated into a spread of 39 to 49 ( by the market The stock is
a screaming
maker (Merrill), but I offered 46( and got my stock. This price is one third the level of U.S. competitors in computer wholesaling and one-sixth that of computer school stocks here (like Learning Tree or Computer Learning Center). Its P/E is half that of the typical Mexican company. It is also a contrast to the only other computer-training company operating in Latin America, Vitech, a $209 million-cap Florida firm assembling PCs and running schools in Brazil. VTCH has run into jaundiced journalism from the Miami Herald and Barrons for how it books receivables. DATAFLUX limits credit on its hardware to 45 days, and its students pay weekly. Its provisions for bad debt account for 1 % of sales. I want my MTV (Mexican TV) DATACAP is chaired by Guillermo Salinas Pliego, a CPA from Monterrey, who is the youngest brother of Riccardo. He's about 40 and speaks excellent English. The family controls Television Azteca and Grupo Elektra. The family connection means DATAFLUX's TV contract for 15 spots/day runs for years-and it only pays $800,000 year. As more schools are added the Colegio Nacional de Computo e Ingles network, it will gain even more from the ad bargain. The school's business is grow ing fast, and Guillermo Salinas expects that from the current 52 schools the number will rise to 200 or more by A.D. 2000. Last Novem- ber, DATACAP bought 75% control of Makro Computo, a distributor iii Colombia, and plans three acquisitions in South America this year: Venezuela, Peru, and Ecuador are closest. The Salinas Pliego family, which had owned 20 % of DATAFLUX, via TV Azteca, before the Mexican initial, public offering last year, now owns under 2%. Management owns 83.51 of the stock (partly in employee stock-option plans). Half of employee salaries are based on performance bonuses based on quarterly earning,, No one follows this share except Caspian Securities in Mexico City. DATACAPITAL will raise about $35 million to finance new schools and its investment plan, either through a bank loan or a Eurobond. If your broker cannot purchase in Mexico's intermediate market, contact my discount brokerage: Mar-quette DeBary. Ask for Caroline. She bought my DATACAPITAL, and she handles small-cap Mexican shares. She can be reached at (800)221-3305 or , 212)644-5300. by Vivian Lewis Reprinted from Global Investing. For a six-month trial subscription ($59 in the United States, $69 else-where), call with your credit card to (800)388-4237 or (970)493-3793, fax-87S1, or send a U.S. dollar denominated check to Global Investing, 1331 Red Cedar Circle, Fort Collins, CO 80524, USA. TRAVEL HEALTH GETTING CROWNED IN BUDAPEST: A TALE OF DENTAL CARE ABROAD US$1 equals 220 forints We bring you a report from a traveler who found an inexpensive and high-quality procedure in Eastern Europe. It scents that Old World charm and the Danube are not the only attractions in Hungary. Buda and Pest are best discovered by foot and trams. Pop into the Budapest Tourist Office-a few doors down from McDonald's and, more important, Deak Square, where three Metro lines meet- to ask for a map. I got the map and as I was about to leave asked, "Is there a dental office nearby?" I had removed the composite covering on my front tooth while biting into a Kalamata olive earlier that day. The woman told me a 24-hour dental office named Profident was just two blocks away by Astoria Square. Off I hiked. Dental liaisons I found the entrance to Karoly Korutl tucked between a restaurant and a Pizza Hut. The building was a huge apartment buildings which fit in architecturally with the important square. The inside entrance was locked, but I was buzzed in. Profident was one flight up at the top of a marble and wrought-iron staircase. The office looked very professional and busy, with the white-coated staff scurrying to and fro. Luckily, the receptionist had spent a year as a high-school exchange student in Chula Vista, California, and could understand my request. I wanted a composite to cover my ugly front tooth. She directed me to the waiting room, and in a short time I was ushered into Dr. Jozef Ernhaft's office. Dr. Ernhaft also had a good command of English and examined my tooth. He explained that he would apply the composite but didn't feel it would last long, as my tooth had no enamel left for bonding. It would be applied again to the dentine. Dr. Feelgood I closed my eyes, and in 30 minutes he handed me the mirror; my tooth not only looked as good as new but also matched my other front tooth-also capped. Dr. Ernhaft looked at his list of The money saved
vs.
charges and said that my visit would cost $22. Shocked but pleased at the price, I asked him, "As long as I am here, may I have a cleaning, and how much would it be? " He responded. "It will cost 4,900 forints ($22) as well." Did Dr. Ernhaft then call in his dental hygienist to clean my teeth? No, he did it himself, cleaning below the gum line. I paid with Visa and before I left asked, "What would a crown cost?" 4,29,000 forints." I knew that I would never solve the problem of losing the caps on my front two teeth without crowns. Overseas appointment During the winter months after New Year's, air fares to Europe drop. In early January, I asked the airlines if they had special fares to Budapest from San Francisco. Delta had a round-trip fare, including all fees and taxes, of less than $600. 1 planned my trip to give me eight days in Budapest. I figured that would give Dr. Ernhaft and the dental lab enough time to make a crown. My flight would have landed in Budapest at about 8 a.m., and after checking into Hotel Mercure Buda, I would head immediately to Profident and Dr. Ernhaft's capable hands. Unfortunately, bad weather forced me to miss my connection at JFK, and by the time my rerouting through Paris got me to Budapest, it was 11 p.m. I had lost a whole day. I leaped out of bed on Wednesday noon and hiked 100 yards to the Deli terminus of Metro Line 2 (red), and five stations and 15 minutes later I emerged from the Astoria Tere station. I entered the Profident office unannounced once more and requested Dr. Ernhaft. He had a full schedule but was able to fit me in without too long a wait. After some thought, I boldly asked for crowns on both teeth and informed him I was leaving Budapest the following Wednesday morning giving him seven days. The enamel thickens Dr. Ernhaft prepared my front teeth for crowns, took impressions, applied a temporary crown, and told me to return on Monday for a fitting and Tuesday for implanting. I asked Dr. Ernhaft if I needed any other dental work, such as other crowns of replacements for old fillings. He examined my teeth and said they were OK. Before I left the office, I told the receptionist that I was very happy with Dr. Ernhaft. She agreed, saying "He has golden hands." I spent the next few days taking in the glories of Budapest and dining at its many famous restaurants. On Monday at 1 p.m., Dr. Ernhaft fitted my crowns and told me to return on Tuesday at 3 p.m. Tuesday was one of Dr. Ernhaft's days off, but he came in and applied my two new crowns. They look great, and my smile is better than ever. A glance at Profident's list of dental services confirms that the money saved vs. the cost of American dental services financed my additional Budapest visit alone. by Dennis A. Cavagnaro Contacts ? Profident, Karoly korut 1, H-1075, Budapest; tel. (36-1)342-2546, fax (36-1)342-6972 ? Hotel Mercure Buda, 1 Krisztina korut 41-43, Budapest, tel. (36-1)156. 6333, fax (36-1)155-6964 ? Hungarian National Tourist Board, 150 East 58th Street, 33rd floor, New York, NY 10155-3398; tel. (212) 355-0240, fax -207-4103 A biting comparison This quick comparison between dental rates in Budapest and the States will help you to decide if that next dental visit could easily finance a trip to Europe. Budapest
U.S.
Total= $180 $770 Savings= $590 Case history Dr. Ernhaft, 32, married with two children, is a prosthetic dentist; in fact, he was an assistant professor of prosthetics at the university. He is Profident's dentist director. Twenty-two dentists practice at Profident, and at its busiest times of the day seven are usually on duty. Profident is open 24 hours a day, 365 days a year. |
