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The Good Fortune of Being Born in the Right Place at the Right Time

“I received a letter just before I left office from a man. I don’t know why he chose to write it, but I’m glad he did. He wrote that you can go to live in France, but you can’t become a Frenchman. You can go to live in Germany or Italy, but you can’t become a German, an Italian. He went through Turkey, Greece, Japan and other countries. But he said anyone, from any corner of the world, can come to live in the United States and become an American.” - Ronald Reagan

The past few months have been very difficult for my family emotionally. After a short battle with lung cancer, my father, David Kobe passed away on May 4th. Prior to his diagnosis in January of this year, my father was the picture of health. He never smoked, ate healthy, went to the gym at least three times per week, and played tennis competitively. My mother, my sister, our extended family and his friends, we are all still in shock.

At some point I plan on writing more about my father, what he meant to me, and how fortunate I was to have such a positive role model in my life. For now, I’ll just say he was the best man I’ve ever known, led by example, and exhibited the highest degree of character. He is irreplaceable.

Given the recent emotional roller-coaster surrounding my father’s death, I’ve decided to take some time to myself and mourn with my family. Over the next couple of weeks, I’ll be working out of our family’s vacation property in South Florida focused on healing, family-time, managing investment portfolios, and looking after our clients’ financial well-being.

Please see the below newsletter, which is rehash from a couple of years ago. It can be argued having the good fortune of being born in the right place, at the right time, to the right parents is the greatest gift one can ever hope to receive.


Sometimes I wonder what my life would have been like had I been born in an underdeveloped poor country. I mean let’s face it, many of us, myself included have had the good fortune of being born in the right place, at the right time, and in many instances to the right parents. What we do with our luck is a different matter altogether, but just starting from a position of strength can make all the difference in the world.

My wife was born in San Francisco. She along with her siblings are first generation Americans. Her parents immigrated from Nicaragua and were given an opportunity to lead a better life and provide more for their future children. I am happy they did, as my life is far better off with her in it - I believe she would say the same thing about me.

For many years now, my wife has regularly sent money back to uncles, aunts, cousins and close family friends. It is a huge responsibility, at times a burden, but nevertheless necessary. She loves and cares for her family and truly hates to see them in need, so she contributes what she can. Life is rough in Nicaragua, as the country has been mismanaged as far back as I can remember. I have visited with her maybe seven times over the years and in my opinion, the major crime of the Nicaragüense is being born in the wrong place, at the wrong time.

I recently received the below article from Visual Capitalist and the subject matter resonated loudly. I found the discussion, charts and statics thought provoking and thought my readers would feel the same.


Which Countries Receive the Most Remittances?

By Iman Ghosh

Mapped: The ins and Outs of Remittance Flow

The global immigrant population is growing at a robust pace, and their aggregate force is one to be reckoned with. In 2019, migrants collectively sent $550.5 billion in money back to their home countries—money transfer flows that are also known as remittances.

Remittances serve as an economic lifeline around the world, particularly for low- and middle-income countries (LMICs). Today’s visualization relies on the latest data from the World Bank to create a snapshot of these global remittance flows.

Where do most of these remittances come from, and which countries are the biggest recipients?

Remittances: An Origin Story

Remittances are a type of capital flow, with significant impacts on the places they wind up. These money transfers have surpassed official aid being sent to LMICs for decades, and in this day and age, are rivaling even Foreign Direct Investment (FDI) flows.

Remittance flows mainly help improve basic living standards such as housing, healthcare, and education, with leftover funds going towards other parts of the economy. They can also be a means for increasing the social mobility of family and friends back home.

Altogether, 50% of remittances are sent in either U.S. dollars, or the closely linked currencies of Gulf Cooperation Council (GCC) countries, such as the Saudi riyal. It’s not surprising then, that the U.S. is the biggest origin country of remittances, contributing $68.5 billion in 2018—more than double that of the next-highest country, Saudi Arabia, at $33.6 billion.

Remittance Flows as A Safety Net

The impact of remittances on LMICs can vary depending on what you measure. In absolute terms, the top 10 LMIC recipients received $350 billion, or nearly 64% of total remittances in 2019.

India tops the chart as the largest remittances beneficiary, followed by China and Mexico. Interestingly, these three countries are also the main destination of remittance flows from the U.S., but in the reverse order. Mexico and the U.S. have one of the most interconnected remittance corridors in the world.

However, the chart above makes it clear that simply counting the dollars is only one part of the picture. Despite these multi-billion-dollar numbers, remittances are equal to only a fraction of these economies.

By looking at remittances as a percentage of nominal GDP, it’s clear that they can have an outsize impact on nations, even if the overall value of flows is much lower in comparison.

It’s clear that the cash influxes provided by remittances are crucial to many smaller countries. Take the Polynesian archipelago of Tonga, for example: even though it only saw $190 million in remittances from abroad, that amount accounts for nearly 40% of the country’s nominal GDP.

Will The Remittance Tides Turn?

The World Bank projects remittance flows to increase to nearly $600 billion by 2021. But are such projections of future remittance flows reliable? The researchers offer two reasons why remittances may ebb and flow.

On one hand, anti-immigration sentiment across major economies could complicate this growth, as evidenced by Brexit. The good news? That doesn’t stop immigration itself from taking place. Instead, where these migrants and their money end up, are constantly in flux.

This means that as immigration steadily grows, so will remittance flows. What’s

more, fintech innovations have the potential to bolster this progress, by making money transfers cheaper and easier to access.

“Tackling high transaction costs is crucial not only for economic and social development, but also for improving financial inclusion.” - UN ESCAP, October 2019


I am surprised by the resiliency of the stock market year-to-date given the economic backdrop of slowing growth, slowing inflation, weakening labor market conditions, weakening commercial real estate, and problems in the regional banking sector. In the short run, financial markets tend to be driven more by emotional factors which are prone to psychological influence. This means equity markets can continue to run higher, however I believe it would be prudent at this point to scale down risk should this occur.

At the moment, some of the optimism priced into markets is based on Artificial Intelligence (AI) and how this new technology will revolutionize our lives from mundane tasks to more complex situations. I have no problem with that line of thinking, however the skeptic in me tends to view much of the early investing opportunities as more hype than substance. Time will pass, the dust will settle, and it should become more apparent where the opportunities truly lie. For now, I believe the run-up in prices is more based on hope.

For the time being, it has been acknowledged a select number of large capitalization technology stocks are responsible for the bulk of this year’s gains. This is generally not an indicator of a healthy market. Nevertheless, I continue to prefer an overweight in this sector relative to the alternatives.

The yield curve is deeply inverted, while as mentioned growth and inflation are decelerating. This is a bad formula for a leveraged credit-based economic system. I am biased towards intermediate and long-term US interest rates falling more than is currently priced in, while future equity market gains over the coming months could be more difficult to come by. Fortunately, money market rates via U.S. Treasury Bills are yielding greater than 5%, which is an excellent alternative for new money looking for a home. On the other hand, if I am wrong and the stock market continues higher – fine – this why we diversify. Managing a portfolio of equity risk assets is not binary. Meaning we are never 100% in or out of market risk. Rather it is a sliding scale, one of magnitude.


Justin Kobe, CFA

Founder, Portfolio Manager & Adviser

Pacificus Capital Management

A referral is the best compliment.

Feel free to forward this email to friends and colleagues.


Advisory services through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Cambridge and Pacificus Capital Management are not affiliated. Material discussed is meant for general illustration and/or informational purposes only, and it is not to be construed as investment, tax, or legal advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice. These are the opinions of Justin Kobe and not necessarily those of Cambridge Investment Research, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Investing in the bond market is subject to risks, including market, interest rate, issuer credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies is impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and the current low interest rate environment increases this risk. Current reductions in bond counter-party capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed. Diversification and asset allocation strategies do not assure profit or protect against loss.

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