Welcome back Speculators.
I’m on the road.
Tuesday I boarded a plane to Panama, to pay a visit to Michael, one of my oldest friends—and the most successful Canadian I know.
The guy is a beast of business. He bleeds talent. I love seeing him in action, it’s like watching someone use the force.
And he’s really crushing the whole life thing. Successful people hang out with Michael and feel broke, myself included. Which is how I feel now, sitting in his Den.
When I lived in England I had this custom-built designer flat, right in the heart of London Bridge. Column-style glass fireplaces, waterfall showers, heated floors.
The master bedroom had a projection screen and a Jacuzzi; you could play Grand Theft Auto half submerged. Yeah. And I thought that was impressive.
“I liked that place though, it was cute…” His Canadian accent cascades with reverb, crossing marble slabs.
I’m reading aloud. He’s pouring shots. God I love this guy.
We’re at least 1000 stories up, how many exactly I can’t say—lost count in the elevator after passing out from altitude sickness. Bell boy must be a damn Sherpa.
The architecture is weaponized simplicity; every view is the same:
Stone. Glass. Ocean.
My “guest suite” is roughly the size of the house I grew up in. Granted, I was raised in rural Kentucky, but still.
The rugs underfoot—and the bedding for matter—were definitely alive at some point.
“I downed those beasts myself with a 16th century bow & arrow…. or maybe it was a spear…. hard to remember. Things move fast when you’re riding a unicorn.”
Guy is as funny as he is rich.
Michael’s a FatCat, an investor and an entrepreneur. He’s started half a dozen plus companies; some he sold, some he took public, a few he still runs.
Several years ago he started a private, invite-only hedge fund. His investment style?
Polyphonic and aggressive.
No industry, no market, no business is out of bounds. And with few exceptions, if he can’t see a path to 10X return, he’s not interested.
The result is Babe Ruth. A good number of strike outs, but enough home runs to change the game, and then some.
The success of that fund was one of the original motivations for starting this site—grab a seat, take a shot, join the club and walk amongst giants.
We hea to Intimo in Punta Pacifica for dinner.
Panama City is modern.
You could mistake it for Miami, except that it’s too clean. And the people too friendly. Definitely worth a visit.
As is Intimo. Best lamb I’ve had in a decade.
Before we make it to the table, a welcoming parade descends: owner, chef, bartenders, waiters, the whole staff. Michael knows them all by name, and actually knows them too. Guy never met a stranger––a big part of his success to this day.
Every year without fail, some of our best investments are the result of some random conversation he started, with some random stranger he happened to meet, while herding goats in Patagonia or ice fishing the Equator.
We say our hellos and the party kindly escorts us to our table, overlooking the sea.
“Fat Cat looks to be carving out its niche; enjoyed the article last week. Very Boston Tea Party of you.”
[If you didn’t catch last week’s article, Double Your Income: Stop Paying Taxes, check it out here.]
“Thanks Michael. Ironic that the most free place in America right now is one of its colonies. You’ve been living here in Panama tax-free for some time now, any advice you’d give our Canadian readers exploring that route?”
“Sure. As a Canadian, it’s an issue of residency––if you’re established in another jurisdiction, then you’re subject to the tax laws of that jurisdiction, so any of the zero-tax or low-tax jurisdictions worldwide are an option, and you retain your Canadian citizenship and passport.
We’re really lucky there. But there is a process. I’m simplifying, but generally you’ll need to liquidate your existing assets, file your taxes in Canada, and pay the tax due. Then you’ll need to declare non-residency in Canada, providing proof to the State that you’re officially a resident elsewhere––which is generally the main hurdle and point to consider. Because depending on where you’re going, this can be an expensive process. Getting residency in some zero-tax jurisdictions requires hundreds of thousands of dollars in investment.”
“Why did you pick Panama?” I ask.
“You know It was actually Doug Casey who turned me onto Panama, when they started the Friendly Nations Visa Program in 2012. Panama put together a list of their favorite 50 countries—Canada, The US, most of Europe etc.––and if your country is on the list, it’s easy and cheap to become a Panamanian resident–– You just need to show them you have at least 5k in the bank/means to support yourself, and then either open a Panamanian Corp., get hired by one, or spend at least 10k on a piece of real estate in Panama. Once you’re a resident, Panama charges zero tax on any money earned OUTSIDE its borders, so as long as your income is generated from an offshore like BVI or Belize for instance, you’re tax free. It’s really super––”
And he’s gone. I spot him half way across the restaurant, chatting up a smiling couple. No one moves that fast except by catapult. Like I said, the force….
The couple poses, the sea behind them. Their phone in hand, Michael proceeds to take about 300 pictures from 46 different angles.
Clearly, he’d saved them from an awkward selfie. What a guy. Now the waiter is taking pictures of all three of them!
The gentleman hands Michael his card. They’re patting each other on the back. Networking is a sport to this guy. Watch it turn into our next 10-bagger.
Dinner is served, but before my lamb is fully dead the parade begins.
The rest of the restaurant now privy to his presence, an actual line is forming. Of course, everyone knows Michael. I’m literally meeting the whole restaurant
“Christoph, meet Havier from UBS, he helped us put together the deal last year on…”
“Gustavo runs an investment group out of Munich, they were the lead order on…”
“Luca’s originally from Venice, and his Mom makes the best small-batch Limoncello you’ve ever…”
Two hours later Michael’s calendar is full, and I’ve heard more VC opportunities than a 400-pound diabetic addicted to Shark Tank.
A gold company going public, water desalinization in South Africa, Iberian Ham for export to Beijing, a vineyard for sale in Napa…
Michael signals the waiter, “We’ll take the Sambuca now please…”
The Sommelier arrives with two shot glasses and a full bottle of Sambuca. Removes the seal, pours us a round, and leaves the bottle with us.
Michael looks at me, bewildered, “Did I just accidently buy a whole bottle of Sambuca?”
“Lost in translation I guess?”
“Is that a sign, Christoph? I think that’s a sign!”
As in, we’re gonna finish that bottle.
From there the night gets fuzzy…
I wake up to a nuclear sunrise, sand caked to my feet. Fully clothed, gently swinging.
Apparently, the balcony hammock was more alluring than the world’s most extravagant guest bedroom.
Michael’s two kids are playing on the floor, assembling a giant yellow puzzle the size of a windshield. It glares in fresh sunlight like salt on my eyes. Or is that actual salt in my eyes…
Michael’s wife Denise pours me a coffee, and laughs out loud at the state of me.
She grins, “Y’all have fun last night?”
“Yes Ma’am.” She’s as southern as me, Montgomery Alabama.
“Michael says you two made it to the beach.”
“Apparently.” Zero recollection.
“Y’all haven’t changed since college.”
“I certainly hope not.”
“Well, if you ever tire of the balcony, we do have a spare bedroom now.” She laughs.
A commotion echoes down the hallway. Michael’s yelling, but I can’t make out the words.
“Don’t mind him,” Denise says, “He’s been on the phone all morning.”
“All morning? It’s 6:30am, who is he talking to at…”
Staccato footprints accelerate as something large charges the threshold.
He smashes into me from behind with a full-blown bear hug.
“The Germans are in & the deal is closed! I told you it was a sign HAHA!”
“What are you taking about?” I ask.
“The bottle of Sambuca! We were meant to celebrate! It just came a night early!”
“And celebrate we did, apparently. But I’m hungover and you look like you just stepped off a juice retreat at Four Seasons Bora Bora.” Machine Michael.
“Come on then, what are you celebrating?” I ask.
“What we’re celebrating is that phone call I made to you 14 months ago about a rag-tag tech company with 6 employees. Homerun my friend. Time to sell your shares.”
It Clicks. I can’t pull out my calculator fast enough. He gives me the number.
“Jesus that’s a 33.3 bagger Michael…. I’m buying a boat!”
Suddenly, I’m not hungover.
And this is exactly what I was talking about. It doesn’t take many wins like that to make up for all the ones that don’t hit.
“I’m happy for you buddy” he says, “More than a few said no to that one.”
“Really? Who doesn’t listen to you at this point?”
“You’d be surprised…. As always, I appreciate your propensity for risk. Guess that’s why they call you the Fat Cat eh!”
We step out onto the main balcony. Man, the view:
We settle into a pair of old school rocking chairs, southern style.
“Hell of a way to start the day. What’s up next? Would love tell our readers what your macro view is right now, where you’re placing your bets. Any parting words of wisdom for the Fat Cats?”
“Absolutely. A lot of people are trying to call the top in the equities markets right now, but we’re looking at what’s next. Commodities are in the beginning stages of a major bull market. In relative and absolute terms, it’s the only cheap sector left in the public markets at this point. Because they’re cheap, it’s a contrarian view. For now.
But the writing is on the walls––just look at the dollar breaking, the DOW going down, global growth picking up––all bullish for commodities. So get in before the crowd.”
“Any specific commodities you favor?” I ask.
“Nickel is one of my favorites because of its role in Electric Vehicles, which are taking off regardless of a broad commodity move. I’d refer your readers to the special report you posted on Fat Cat covering EV’s, and your Lithium play, that’s all spot on.”
[To Read Our Two-Part Report On EV’s And Lithium, Click Here]
“Uranium is also interesting because it’s been in a down market for 7 years now, which is unheard of. Nuclear power plants may not continue to get built out at the pace that some suggest, but the cost of production is below the spot price, and that cannot last.”
“And a final question: outside of commodities, any other places you’re deploying your capital?”
“Yes there are, firstly Blockchain. Some of our capital is going into nascent technologies that can change or improve our way of life, and at this point we think Blockchain has proven to be just that. So, we’re looking at technologies that can become leaders in new tech space.
Also outside of commodities, we like the Cannabis space. It’s classic speculation, governments have changed the law, changed the rules, and private business is rushing in to fill the void in what used to be an illegal business. With so much money rushing into the space, there are a lot of quick gains to be made.
Long term, particularly with regards to the United States, it is still very much in the air what regulatory structures will win out in the end, especially on the federal level, but the laws throughout the western world are only changing in one direction, so the industry is here to stay.”
“Thanks for the time and the insight Michael.”
-Christoph Grizzard, The Fat Cat Investor