"The Micro Revolutions©" off Wall Street -- Micro Financial Services in the Developing World = Equity Manna(C)

***

Where is the Upside or Equity Manna(C) for the poorest of the Poor ?

Equity Manna(C) = Cell-phone-based purchasing of micro amounts of stocks & ETFs via MMT (mobile money transfer)

Can stocks be micronized for a micro-DRIP or a micro-Equity investment plan?

E.g., Safaricom stock? Or PT Telkom Indonesia stock? Or China Mobile stock? Etc.

Are national lotteries a better asset allocation plan for the Poor in Africa or Asia?


The microfinance world continues to over-focus on debt-based approaches or products, and foolishly touts micro-savings and micro-insurance as stunning innovations. In truth, micro-moaners are stuck in a deep-debt mental rut from Dhaka they will never escape.

For this reason The Micro Revolutions© ideated and advocated by Carbon Manna Unlimited in San Diego will only be embraced by rebellious young minds with innate urges to smash intellectual pumpkins and spray paint gang slogans on the group-think bridge abutments of BIG Microfinance Limited.

Very Limited.

For example, the field of financial services is obviously a fertile area for micronization, but where are the "new" or "novel" ideas for micro-investments or micro-equity participation by the Poor ? Lamentably and predictably, no such innovations will come from London, Washington (DC), Dhaka, New Delhi, Seattle, Geneva or New York City.

Rather, let us country bumpkins in San Diego, who are smarter than we look, list them here and detail how they will be implemented...

To wit, manifestations of "The Micro Revolutions©" off Wall Street as applied to Financial Services -- or Equity Manna(C) -- will include:

(1) micro DRIPs / microDRIPs (dividend re-investment plans)

(2) micro ETFs / microETFs (exchange-traded funds)

(3) micro mutual funds

(4) micro IRAs / microIRAs (individual retirement accounts)

(5) micro bond funds

(6) micro hard-asset purchase plans -- reference:

--->> http://dekadrakma.blogspot.com

(7) micro ________ <<-- Add your favorite financial service or product here!


# 1 -- Cell-phone-based micro DRIPs (dividend re-investment plans) are the easiest to implement as the software already exists to buy DRIP-plan stocks on-line split down to 1 ten-thousandth of a share --> 1/10,000th --> or 4 decimal places. Hence even the poorest person could use their cell phone and existing MMT (mobile money transfer) systems in Africa & Asia to buy small amounts (less than one U.S.$) of common stock. The middleware needed to interface existing DRIP-plan software with existing MMT system software could be written by a high school AP (advanced placement) programming class over a looooong weekend.

Micro-moaners and well-fed nano-detractors with high body-mass indices will immediately say stock investing is toooo risky for the Poor in the Developing World, but why are the Poor denied all potential to participate in their domestic or international equity markets ? Why are they deprived of all Upside ?

And what do they do now ? All studies show a strong inverse correlation between annual income and participation in legal lotteries or illegal gambling. So will micro-moaners say, then, that a better use of the Poor's little income is losing it to their national governments in lotteries, or to "the house" or their neighbors in games of chance ? Clearly "No". But that's where the Poor "invest" or lose their money now, sadly.

So let them not eat cake, but, rather -- buy stocks !

Stock in what ? -- you might ask ? As one example, there is a 100-year history of highly reliable stock-market gains from investing in the national telecommunications carrier of any country. Examples include British Telecom Plc, Deutsche Telekom, AT&T (and its predecessors) and Nippon Telephone & Telegraph (NTT). Investing in publicly-traded legal monopolies or oligopolies is hardly "risky" and 100+ years of data show good gains for stockholders. We suggest the Micro Financial Services Industry start with these.

And, obviously, purchases of any particular stock could be limited to small weekly or monthly allotments so no Poor family could become "overweight" in any financial instrument or asset category, thus mathematically enforcing a portfolio approach to investing. Our Nobel Prize-winning friend & neighbor here in San Diego, Harry Markowitz, the "Father of Portfolio Theory", will be very pleased...!


# 2 -- Micro ETFs (exchange traded funds) -- technical implementation of these would follow the exact same process as the micro DRIP above. In particular, and as one concrete and important example, even the Poorest of the Poor worldwide should be able to own part of the so-called "People's Central Bank" -- the SPDR (Standard & Poor's Depositary Receipt) Gold Trust ETF or GLD on the NYSE:

-->> http://finance.yahoo.com/q?s=GLD

or:

-->> http://www.google.com/finance?q=NYSE%3AGLD

The most obvious Developing World market for such a cell-phone-based gold micro-ETF would be India -- historically the world's largest importer of gold. China would be next. Thus, even the poorest of the Poor, who already own a cell phone or who have access to one via a neighbor, could invest 50 cents or a few rupees or a few yuan in a gold-backed asset.

Now the Poor in India store their limited wealth in gold jewelry worn on the body. So when the worldwide market price of gold has declined periodically during its unrelenting ascent since August 1971 when Nixon abrogated/eliminated the Gold Standard in the U.S., are the Poor therefore poorer and stupider for having bought their gold jewelry? Patently "No!"

But many micro-moaners and nano-ninnies will whine that periodic declines in the price of a gold ETF would be "risky" and catastrophic for the Poor investor. But can a poor pedicab driver in India or a rural peasant in China buy 50 cents worth of physical gold ? Probably not.

But it is easily possible using a cell-phone-based MMT-enabled gold ETF. As well, the Poor then do not have to worry about theft of their now electronic gold (e-gold or m-gold = mobile-gold) physically stored safely in a vault in New York City or London or Geneva (where the physical gold backing the ETF is really kept). Imagine their peace mind at night ! :-)

Again, pico-pea-brains who doubt the 3,000-year track record of hard-asset investing and wealth preservation are directed to this blog for remedial instruction:

-->> http://dekadrakma.blogspot.com


And for # 3 through # 7 above ?? -- Ditto, ditto, ditto, ditto, ditto !


But what about "transaction costs" !?!?! -- some micro-moaners and nano-debt junkies will interject. Who cares ?

"Transactions want to be free!" Transaction costs want to be zero!

Inevitably, transaction costs will naturally and asymptotically approach zero over the next few years via new technology, enlightened corporate sponsorships or subsidies, and grants from self-aware foundations such as The Gates Foundation, The Omidyar Network and The Rockefeller Foundation.

Right ?

In sum, will contrite micro-moaners of the world unite, innovate and bring financial Upside within reach of the poorest of the Poor ? Nope. Rather, instead -- new minds, new paradigms, new companies and new organizations will bring Change & Wealth Accumulation to the Developing World, as the Old "Micro" Guard and pico-minded debt-prone Dhaka hyper-apparatchiks enter terminal ossification, sclerosis and marginalization.

Let the micro-enabled Poor save themselves financially via Equity Manna(C). Like us here in San Diego, they're smarter than you think.

Warmly & Richly yours,

David A. Palella
CIO - Chief Investment Officer
CARBON MANNA UNLIMITED
SAN DIEGO, California
cell: 619-787-5767
email: dpalella@san.rr.com
http://www.linkedin.com/in/davidpalella

http://www.carbonmanna.org
http://carbonmanna.blogspot.com
http://twitter.com/CarbonManna
http://www.linkedin.com/e/vgh/1794312/


http://www.prweb.com/releases/2010/01/prweb3459274.htm

http://www.marketwire.com/press-release/Carbon-Manna-Unlimited-1065919.html

http://www.marketwire.com/press-release/Carbon-Manna-Unlimited-1033328.html

http://www.marketwire.com/press-release/Carbon-Manna-Unlimited-1007638.html

http://www.marketwire.com/press-release/Carbon-Manna-Unlimited-991442.html

http://www.marketwire.com/press-release/Carbon-Manna-Unlimited-953397.html


I will be/was a speaker or keynote speaker at:
-------------------------------------------------------

2nd Kenya Diaspora Int'l Conference & Investment Forum

20-22 August 2009, Atlanta, GA

http://www.kenyaopen4business.com

---------------------------------------------------------------


"Microfinance for Institutional Investors"

21-22 Sept. 2009, Washington, DC

http://www.hansonwade.com/events/microfinance-for-institutional-investors/index.shtml

---------------------------------------------------------------


"Micro Financial Services World"

[ organized by Hanson Wade ]

11-12 May 2010, Amsterdam City Centre, The Netherlands

http://www.mfs-world.com

---------------------------------------------------------------


Green Business Africa Summit & Expo

02-04 June 2010, Nairobi, Kenya

http://www.greenbusinessafricaexpo.com


---------------------------------------------------------------