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    Posted March 17, 2011 by
    khalidnatto
    Location
    Jeddah, Saudi Arabia

    khalidnatto and 14 other iReporters contributed to Open Story: Earthquake strikes Japan
    More from khalidnatto

    March 17th, 2011 News on Japan & Option Strategies

     

    "March 24th, 2011 Arab News Article:  Manufacturing in the KSA!"

    http://www.arabnews.com/node/371977

    By KHALID I. NATTO
    Published: Mar 24, 2011 00:45 Updated: Mar 24, 2011 00:45


    We are living in some exciting times with all that's going
    on in the news. I am talking specifically about Japan and
    the earthquakes, exploding nuclear reactors, electricity
    blackouts, volcanoes, tidal waves, mass evacuations
    of Tokyo, mass destruction, closing of manufacturing
    plants, and the chaos of the financial markets. We
    recently discussed the ramifications of the chaos
    on the insurability of Tokyo based businesses in
    a video on our website at http://www.kinconsortium.com/.
    The fact is that Japanese businesses have
    been suffering from the rising Japanese yen (JPY).
    This problem has been compounded by rising
    insurance premiums, which is hindering the
    profitability of the various Japanese manufacturers.
    The visionary leader Toyoda is the CEO of Toyota
    Manufacturing Company actually mentioned in an
    interview recently that he was open to considering
    changing the location of his manufacturing facilities
    if the yen continued to rise. I am earnestly waiting
    for his next public statements regarding the
    impact of Insurance premiums on the bottom
    line of his income statements. There are obviously
    a number of locations across the globe that are
    going to be aggressively lobbying the various
    manufacturers for their investments, yet from
    our analysis we would like to highlight the
    advantages of the Kingdom of Saudi Arabia.

    We at The KIN Consortium recently published
    articles discussing the advantages of manufacturing
    in the KSA. The fact is that we in the region are
    blessed with a lack of natural disasters, and a
    location that is midway between Asia & Europe.
    We believe that the Kingdom is the ideal place
    for the development of automated robotic
    manufacturing facilities, and we merely
    propose that the various Japanese manufacturers
    consider moving to our location. We have a liaison
    office set up just for such an occasion called Saudi
    Arabian General Investment Authority (SAGIA), we
    are sure they would be happy to assist you with
    any and all of your endeavors.

    Now that we have discussed the macro solutions
    to the macro problems, let's take a moment to
    discuss various investment strategies to profit
    from the volatility in Japan. In the recent video
    that we mentioned earlier on our website, we
    discussed a product of Morgan Stanley that's
    called iShares. The specific one that pertains
    to our discussion of Japan is the EWJ iShare.
    Its top holdings include Toyota & Honda,
    amongst other Japanese brand names. On
    March 17, we bought a long straddle on the
    EWJ which is "at the money" purchase of
    both call & put option contracts. That
    basically allows the purchaser to profit from
    both volatile rises and falls in the Japanese
    financial markets. We actually bought the
    contracts that expire in September of 2011,
    which allows us to sell the contracts at any
    point of time between now and then. This
    type of investment strategy is an elegant way
    of profiting or hedging portfolio risk. Please
    keep in mind that one must always speak
    to their respective investment advisers prior
    to making any investments, so that they may
    determine their level of suitability for the
    investments. The aforementioned strategy
    profits from extreme volatility in the underlying
    assets, and it demands the undivided attention
    of the investor.

    We recommend all our readers stay vigilant in
    all your investments whether you are investing
    in long-term manufacturing projects, or short-term
    hedging strategies.

    — Khalid I. Natto (khalid@kinconsortium.com) is
    Chairman & CEO of The KIN Consortium.

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