I heard a piece on Market Place (with both audio and transcript) over the weekend about investing in Cuba via the Herzfeld fund. It’s a closed end fund, trading at a much higher premium to NAV than I’m comfortable with (nearly 40%), but it does have a tantalizing investment strategy, and the fund is up 50% so far this year. Herzfeld focuses on businesses in the US that are poised to profit when US/Cuba relations are restored. Here’s a great quote from the piece that highlights this principle: “While many have visions of glass-walled hotels on the Malecon, Herzfeld has his eye on Cuba’s crumbling infrastructure. Most of Cuba’s ports are too shallow for modern container ships. And Trailerbridge has one of this country’s largest fleets of shallow draft vessels ? ships that don’t dip too deep.”

The good news is that his fund can still grow and flourish even without Cuba ties since his companies can still do business in the US and abroad even if the 1962 embargo holds for decades to come. With Castro’s failing health, and Raul’s hand extended to the US, things are poised to make a change in Cuba. However, I personally wouldn’t bet that our current administration is at all interested in normalizing our relations with Cuba, so we’re at least 2 years away from anything changing. What’s great about the Herzfeld fund is that it highlights how we should be thinking and investing in stocks/funds that are poised to profit from inevitable changes. There’s so little chance that the 1962 embargo will last indefinitely, and there’s so much investor interest in Cuba, that this investment idea seems like a no brainer as long as you have a fairly long time horizon.

(This article has been corrected thanks to comments from Jason – Thank you for the feedback!)