The brave new world of investments
We live in a brave new world as political turmoil is fragmenting the global economy and digitization is disrupting traditional business models in a fashion never before seen in history. Amid all this upheaval, there are risks but also rewards, threats but also opportunities. At Brave New World Investments we are embracing these changes. There are great rewards to reap for those who can manage the risks as they tap into the opportunities. For some investment prospects this is more true than for others, in particular those prospects that on the surface might appear unattractive due to political uncertainty or other uncertainty. Such a prospect is for us a typical Brave New World investment. We say, let’s take part in the opportunities and manage the risks by thinking differently and outside the constraints of conventional thinking.
The Middle East is a region of the world that poses high risks and high rewards. Parts of the region are going through a great economic and technological transformation. The founding parters Mairtin O’Duinnin and Mikael Johansson have spent quite extensive periods of their professional life in the Middle East, working with local banks on business processes, financial technology and Islamic finance. They bear first hand witness to some of the vast wealth that the region possesses as well as the opportunities arising from the economic, social and technological disruption that is happening as we speak.
The greatest opportunity in the Middle East region by far is post-sanction Iran. As sanctions are being dismantled, industries in dire need of investment will quickly be brought up to par with international standards. Information technology penetration is currently low in the country and is expected to boom in the coming years. The energy sector is already booming and will soon be back to pre-sanction production levels.
A few US financial sanctions are still active that are effectively excluding large parts of the country’s financial industry from the international financial industry. As these are gradually removed, the country’s financial sector will begin for rejoin fully the international financial markets. As this is happening, and despite the challenges, Iran like the rest of the world is on the brink of a revolution in digital payments, taking full advantage of emerging technological advances.
Brave New World Investments is an investment company that focuses on opportunities around remittance and investment management in Iran.
While sanctions have been eased, it is still difficult to transfer money in and out of the country. Many western banks will not transfer money to or from Iran and indeed will not even open a bank account for companies explicitly stating business activities involving dealings with Iran. At the root of this reluctance is a fear of putting their activities in the US under any sort of legal or regulatory risk.
Brave New World Investments is building a remittance service which solves the problems by utilizing blockchain technology. We are currently preparing a pilot program, and if you are European-Iranian business and are interested in participating, please send us an e-mail.
The investment greats of recent decades such as Benjamin Graham and Peter Cundill have taught us that an overlooked or ignored stock market is often a good place to look for bargains.
Analysis of the Tehran stock market as a whole indicated an average price to earnings ratio of less than 7, perhaps as much as a 50% discount to typical normalized valuations. If the country turns into the next hot emerging market then it is likely that the discount could turn out to be even higher. Furthermore, the Teheran Stock Exchange has historically no correlation with any major indices and Iran has no capital gains tax and no tax on interest received.
Brave New World Investments is going to build an investment management business separate to the remittance business. However, the investment management business requires a remittance service as a prerequisite and is thus down prioritized for the moment.