Iceland Anecdote

This was passed on to me from Michael Taylor. It came from a site called Daily Specualtions.

01/17/2006Iceland, by Yishen Kuik

Just returned from a long weekend spent in Iceland. A few spec-related travel notes:
Iceland is extraordinarily tiny. The population crossed 300,000 just a few days ago. Everyone knows everyone and consequently crime is almost zero.

Like Saudi Arabia, Iceland has plenty of cheaply extractable energy under the earth. Unfortunately it can't load it on a VLCC. As the hydrocarbon-geothermal spread increases, it seems likely that more energy hungry manufacturing processes like aluminium might migrate to Iceland.

Iceland has very high tariffs (30%) on agriculture. I don't know whether this was meant to protect local farmers or reduce corporate/income taxes, but the result is that a bowl of soup at a highway gas station will cost $10 (600 ISK) and a chicken entree at a regular restaurant in Reykjavik will cost $50 (3200 ISK). However, basic math tells me a $50 chicken cutlet isn't fully explained by a 30% tarrif.

You can pay with plastic anywhere in Iceland - even the hot dog guy will accept plastic.

Fishing is still the major export business and it is a protected industry. Some quick work at Statistics Iceland tells me about 1,000 people were responsible for $1bn worth of fish in 2004, or about $100,000 per person. Anecdotally, my guide told me that the best jobs were in fishing.

Iceland has extraordinary population records. Statistics Iceland's database starts at 1703.

The Icelandic stock market made a new all time high today at 6253.4. The ICEX 15 index was 1000 in 12/31/1997 (presumably the calibration date) and 371.1 on 12/31/1992 (earliest time series data). This gives us an IRR of 21.9% over the first 5 years, 25.6% over the next 8.05 years and 24.2% over the entire 13 year period, excluding dividends. If Iceland were a hedge
fund!

Oh yes, it's a beautiful country. ======= End of Post ===============