The First Investment I Look For When I Travel To A New Country

 

The First Investment I Look For When I Travel To A New Country

 

Beer.

Yup. I’m serious. I look how at what beer investments are available.

You will find a beer company in nearly every single stock exchange in the world.

And usually, that company will be one of the biggest companies on the entire exchange.

Source: VP

Additionally, you’ll find that most brewers are owned by extremely powerful and influential families. Whether it’s Latin America or Africa, the elite own the beer business.

So why do I look for beer companies when I travel to a new country?

A variety of reasons…

1. I know that the alcohol industry is heavily regulated. Families and companies that own breweries have significant clout when it comes to government imposed regulations. Or in other words, beer brewers get the inside deal. And I want to invest with those who have the inside deal.
2. People drink beer no matter what. Economy is good? Let’s drink to celebrate! Economy is bad? Let’s drink to forget about everything!
3. Beer has been around for thousands of years. I don’t think it’s going to disappear anytime soon.
4. Beer is tangible. Like most of my investments, I like investing in real things that I can put my hands on. Investing in a company that owns machinery, vehicles, real estate, etc. ensures that your money is backed by something.
5. Beer is boring. What is more exciting: driverless cars or a bottle of beer? Exactly. I’ll invest in the boring stuff all day long.
6. Beer companies are prime acquisition targets. Take a look at this:

Source: BI

It all comes down to shelf space.

The major beer companies want to own beer brands that are popular. They want to own the brands that are taking up the most shelf space – that are most in demand.

So, if a new beer company starts up and begins to displace a major brand, that major brand will just go buy that new company. It’s much easier (and profitable in the long run) to just buy that new brand instead of trying to compete with them.

That’s one of the reasons I invested in House Beer, a beer startup located in Venice, CA.

(Along with Florida, House Beer launched distribution in Colorado and Idaho earlier this summer and is also available in Southern California, Northern California, New York City, and Pittsburgh. If you are in any of those areas, go check it out. Or, call your local grocery market and request that they order House Beer. Thanks!)

 

So have I convinced you about beer yet?

Well, let me tell you the other side of the story…

 

Last week Goldman Sachs downgraded Boston Beer Company and Constellation Brands because millennials consume more wine than previous generations.

And it’s not just wine that’s putting pressure on beer.

It’s cannabis.

Researchers have found that millennials are actually moving away from alcohol all together. Instead, their vice is marijuana.

Source: CNBC

But, millennial aren’t alone. In fact, the market as a whole may be shifting to cannabis, especially as more US states and countries legalize the plant.

The great thing for us, as investors, is that we can see this shift coming from a mile away. We can position ourselves to get in front of this change…

 

***Note to Explorer Partnership members: We have a VERY exciting investing coming up in this space. I’m hopping on a plane tomorrow morning to tour a facility in our last steps of due diligence. More news for Explorer Partnership members coming very soon!