Panama’s Perfect Storm

Kevin Kingston writes about “several major trends converging” in Panama Real Estate

Panama – The Perfect Storm By Kevin Kingston

As I sit here Sunday morning getting ready for my 5th trip to Panama I just can’t stop running numbers through my head. As you may know, if you’ve been reading my Blog, I’m a huge fan of leveraged returns, so much so that I wrote a book about my experience leveraging $15,000 to over $5 million in equity while buying 30 buildings in about 4 years. Well what’s about to happen in Panama is mind numbing. There are several major trends converging on this country which will create a massive boom that only comes along once in a lifetime, maybe twice. Charlie Munger, Warren Buffett’s partner in Berkshire Hathaway, calls this the “Lollapalooza Effect“. He says, if you are attentive enough to recognize these occurrences and smart, brave or ballsy enough to act on them in a major way you can make fortunes.

A few of the major impetuses to (Panama’s) growth are:

  • A $5 Billion canal expansion to start this year. (Editors Note: It’s well underway Kevin and already having a dramatic effect on Panama’s economy!)
  • A $3 Billion mega-port to be built.
  • Over 100 buildings going up around (Panama City) – most of them sold out.
  • A 250,000 unit shortage for working class housing.
  • Aging baby boomers looking for affordable retirement areas.
  • A perfect, hurricane free climate.
  • A stable government.
  • U.S. Dollar currency.
  • A constitution that protects foreign investors as if they were citizens.
  • A banking system that is emerging as the premiere offshore destination (in the world).
  • Cash pouring in from other South American countries like Venezuela.
  • Super friendly people that are American friendly.
  • A Government that is so flush because of the Canal money ($1 Billion +annually) that they are giving out favorable tax treatment for builders and businesses.
  • A free trade zone.
  • The most important waterway in the world.

…I’m sure I’m missing a lot, as I think of them I’ll share them with you.

Prior to the US returning the canal to Panama in Dec. 1999 they made a few million at best a year, now they (Panama) are pulling in well over a billion annually, and that’s about to go through the roof with the raise in the fare and the expansion. This money is going to the government that is encouraging business and development. I literally could go on all day so I must stop myself!

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