Here's an example, given by Bloomberg, of how non-market restrictions can be used by investors to achieve excellent market result. The politics of the Faroe Islands is unlikely to pique your interest, but how about an 800 percent return on your investment?
While the rest of Europe has seen its trade relations suffer through Russian sanctions, the Faroe Islands -- part of the Kingdom of Denmark - has enjoyed a boom thanks to its decision to stay out of the European Union.
The islands’ biggest marine produce company, Bakkafrost, has seen its stock surge about 100 percent over the past year, including re-invested dividends. If you are lucky enough to have held Bakkafrost shares over two years, you’ve earned a 260 percent return. The 800 percent return on Bakkafrost shares since the last election in October 2011 shows the company’s health is closely linked to the state of the Faroese economy. Thanks to its freedom to snub EU sanctions against Russia, the Faroe Islands was never a target of President Vladimir Putin’s food bans. That gave Bakkafrost a unique market position. Politicians representing the windswept Atlantic island acknowledge they can’t design any laws that overlook the interests of their marine industry.
“Our industry enjoys very wide support in Faroese politics,” Regin Jacobsen - Bakkafrost’s CEO said forBloomberg . “We don’t expect any new changes to business conditions coming from Faroese lawmakers for a while.”
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