Ruby Rough

From the mines in Asia

Two of these articles date back over two decades. They show that I have been around for years doing this business. The third article, published in 1988, in the South American Explorers Journal, offers basic advice to adventure travelers. My wife wrote a letter to the editor of a local newspaper, which is the last article.

Sept 12, 1979
San Francisco Examiner - Page 33
Dwight Chapin

Safari, so good

FOUR THIRTY in the afternoon. Sitting in my office, sweltering. Could it be goodbye, world, and hello, heat prostration?
I know, I'll close my eyes and dream I'm combing the wilds deepest Colombia or riding along on safari somewhere in West Africa with Bill Cate.
The temperature is right, no doubt about that. But the idea. sadly, Is not. That's because Bill Cate prefers to travel solo. "The epitaph on my grave," he says, "is going to read 'He went by himself.'''
Why should it be otherwise? He's been a loner from as far back as he can remember.
"I can t tell you exactly when I began to deviate from the system,. Bill Cate of Pacifica says, "but- I've never seen the world quite the same as anyone else I know has"
When the other kids were playing grade school football, Cate now 41. would be out roaming around Land's End or hiking on some deserted trail He was a good student, but he threatened not to graduate from eighth grade unless his mother let him take off for the wilderness country of Northern California-alone, of course-for a couple of months.
I made it just fine." he says. ~A lot of people thought I might have been a runaway and took pity on me. But my mother aged 20 years during that time. When I got drafted in 1961, she wasn't upset, she was overjoyed, because she knew the Army would tell her where I was."
Even his wife, Linda. can't pinpoint the location of Bill Cate a lot these days. He's scheduled to be on the move this month in Colombia, Venezuela, Ecuador and Brazil, collecting minerals and insects. dealing in almost anything except drugs ("I don't believe in them- they're a crutch." he says).
The man is almost impossible to classify because he is (and has been) so many things. He's been called a combination Howard Carter and Errol Flynn, although he's never uncovered treasures like Tut's-and swashbuckling is really not his style
Cate has a master's degree in geology, was a college professor and a dean of students, worked with juvenile delinquents. He is a freelance writer, photographer. lecturer puts on workshop for potential adventurers. more than anything, I think, Bill Cate is an explorer, of places and things and of himself.
'The thrill is in being," he says, ' and in doing. I simply can't buy the view that you work 40 years, retire and then have a good time."
So he probes and digs and does. Some of it is routine, even dull "Library time," he says. ~That's really important. I'll spend eight or nine hours at a stretch in a library. Looking for where a mineral deposits exist and who wants to buy them in small quantities A lot of people would go crazy staying that long in Libraries."
BUT ITS NOT ALL books and quiet corners. The last time he was in South America, a bandit challenged him a machete fight. "I have a black belt in karate." Cate says. but I tried to get out of the fight. The object of the game is not to get in trouble in the first place.
"Anyway, I fought and won and the story grew and grew until people had me taking care of six guys. If you want to know the truth, I cheated on the rules to beat one guy. I'm no hero. I'm just a guy who's doing what he wants to do and succeeding reasonably well."
Even that isn't always the case. Cate has estimated his annual income at around $15.000. which would indicate there isn't an undiscovered mine around every bend in the Amazon.
"I was told, years ago, that foundations would fund what I was doing," he says, and that I could teach at a local university, write a few books and get rich. That's a complete illusion. It can't be done. The markup on stones I find and sell can be fantastic. A one-carat emerald I can buy in Colombia or Zambia for $175 will go for $3,440 here. But my luck isn't always that good. I've gone through a lot of financial disasters.
In the early 1950's, he remembers hearing a lecture by author-adventure Leonard Clark. "His point of view," Cate says, was that it was not so important to make a million dollars as it was to have at least passed over it."
Cate has done that. and survived every risk. two-legged, four-legged and multi-legged.
"l take every shot in the book." he says "because everything that flies has you on the menu. But I don't get sick. I've never been seriously ill anywhere in 20-plus years of wandering. Lost a few times, but never sick.
He's hardy enough. he thinks, for at least ten more years of the same pursuits Then he might stop-but not retire mind you-find a hideaway and write his memoirs. "After that," he says. "maybe I'll explore America."
Which could be the most dangerous adventure of all.
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B4- The Sacramento Union,
Monday, September 17, 1979

The adventurer

By CATHERINE FEHR
Staff Writer

Meet Bill Cate - geologist, explorer and businessman.
Cate is a man who earns a living buying and selling gems but he does not think they're one's best investment
He does it because he likes the lifestyle.
Cate just may be today's version of the 19th century trapper who roamed the uninhabited lands of the western United States. Hunting and trading for a living. Further. Cate is living proof that man can do what he wants and still make a living - even in today's modernized. mechanized and institutionalized society.
Even when dressed in slacks and a corduroy jacket Cate gives the Impression of being somewhat of a nonconformist his hair is disheveled and his face is slightly weathered. He talks almost non-stop elaborating on his unique lifestyle

"I AM VERY HAPPY with what I'm doing." says Cate. Who is a firm believer that if someone wants to do something bad enough he can find away to do it.
Cate divides his time between life in South America and life with his family in the San Francisco Bay Area.
When he is in South America, Cate is in places few people tread
I'm down there floating down the streams talking to the miners.'' says Cate And. it is the miners who are the key to Cate's livelihood and stories
Cate rides mule and hikes into the backwoods of South America and Latin America. He has stumbled across a deserted mine only to uncover the bones he believes to be those of a Spanish miner from centuries past
And Cate tells about how he has eaten an elegant dinner flown into the jungle miles and miles from civilization.
And . . Cate has bought and sold many gems. And when Cate talks gems, he is talking emeralds, diamonds, rubles and all those other rocks" which adorn fingers. wrists, ears and necks of so many men and women.

"I'M NOT A BELIEVER in investing in gems." says Cate There are too many hands in the cake paying 100 percent.'' he adds
"The object of the game is to go in at the miner level.'' in order to buy gems at the lowest possible price. the adventurer explains.
And. Cate does just that.
Cate says he buys gems from the miners and then goes back to Europe or the United States to sell them.
Everybody out there is trying to beat everyone else." says Cate.
There are more Coke bottles being sold in Columbia as emeralds than anywhere else In the world " he adds. "If you don't know what you are buying, you may be buying glass as gems."

CONSEQUENTLY. THE gem dealer advises. You only buy it today when you know you can sell It tomorrow afternoon for more money."
Therefore. Cate says he bases all his buying transactions according to the lowest possible price he can get for the stone

And, he doesn't recommend such transactions to the unskilled entrepreneur. Before becoming a so-called professional adventurer Cate earned bachelor's and master's degrees in geology and studied for a doctorate and delved into the mining business Cate says. "When selecting gems. one should judge them by their color. clarity and lack of flaws However, he also points out that experts. too, have been fooled when it comes to judging the value of gems.
Cate tells a story about someone who had a 932 carat emerald - which would be worth about $96,000-but could not find a jeweler to cut it. Cate explains that two major gem cutters would not cut the emerald because of its size. There was something fishy about the stone. Cate continues. but nobody could pinpoint the problem. Finally. it was discovered that the 932 carat emerald" was many emeralds cut paper thin and then glued together. says Cate.

ANOTHER REASON GEMS are not always one's best hedge against inflation, according to Cate, is because there are techniques which can make a gem look more valuable than it actually is. For instance, Cate says a certain treatment is used to make emeralds look greener-thus making it look like a higher-quality stone.
The prices of diamonds, rubies and other gems are governed by the rules of supply and demand. Cate says. adding that... "supply and demand is based on what we perceive them to be worth."
You cannot eat diamonds. There is no essential value that they have. It's just our attitude toward them. "
For the most part attitudes toward these precious stones are quite positive.

SO IF YOU ARE interested in speculating in some rocks. you may be interested in Cate's predictions:
- Diamonds: Don't buy junk diamonds.'' warns Cate. There's no value in junk diamonds, but he says good diamonds hold their price. Cate believes the diamond market will go up- for only one reason- Christmas is coming.
-Emeralds: Cate says Zambia is a major source of emeralds and the nationalization of the mines in Zambia has created a mining slowdown. This slowdown will decrease the supply and in turn. make the stones more valuable Cate explains.
-Rubies and sapphires: He says production of these stones is down at the moment.
-Gold: Prices will rise says Cate. He also thinks the price of gold may stabilize in the future. He would attribute a gold price stabilization to trends traditionally established in election years. Eventually, the gold price must fall, says Cate.
To buyers, sellers and jewelry wearers these trends and speculations seem interesting. But all speculations aside, as long as people want to wear fine jewelry there will be a market for it.
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Paying Your Way: Learn How to Turn a Profit from Traveling
By William Cate

Squirrel away your money, take a trip, and you can fill your life with memories. On the other hand, turn your trip into a business, and you can have a lifetime of experiences.

From many long years in South America, I've learned how to turn a profit from traveling. Making a profit involves risks, but it gives you freedom and personal satisfaction. You can do what you want, stay longer and maybe even come back richer than when you left.

Still, before you sell the house and pack the kids off to boarding school, it pays to think about what you want out of life. On the whole, I've found it's generally easier to work for someone else than try to set up your own business. Also, it's a lot easier to survive in North America than in South America. So, if you can't tear yourself away from your backyard barbecue, and fear you might fall apart under the stress and uncertainty of trying to make a go of things in a foreign country, this article is not for you.

On the other hand, maybe being Salesman of the Month has lost its zing. Maybe you need a final fling, something to get sweaty about as you rock away the hours in The Golden Pastures Rest Home -- something exciting and different -- some new adventure.

Running a business takes much planning. Fortunately, planning can be learned, and once you learn it, you're on your way.

The first thing you need to know is how to manage your money. I've found it helpful to open a savings account with the international branch of a large bank. Every major US bank has an international branch that lets you withdraw your funds in any country in the world. It's best, to choose a major European bank with branches or correspondent banks in all the Latin American countries where you plan to do business.

European banks offer two major advantages: 1) Your US dollar account earns about twice the interest of a US bank and 2) should you ever find yourself in a difference of opinion with the IRS, it's comforting to know the Feds have some difficulty touching foreign bank accounts.

You should think about how much money you will need to live in South America. This varies from person to person. If you've just returned from Peru, Colombia or wherever, you'll know what's right for you. If not, here are some rough guidelines.

If you're content to bus and backpack around living in a lower middle class existence, you can make do with US$200/month. On the other hand, if a 4WD vehicle is essential to your happiness, plan on about US$500 a month. Then again, if you must live like a US tourist, sleeping in the best hotels, eating the finest fare, etc., you can easily drop US$2,000 a month just on living expenses.

Let's assume you're up for the US$200/month bus and backpack lifestyle. Since you'll be watching your pennies, air travel may well be your largest expense. Discounts on air far can vary greatly. It's worth looking into round trip flights from Miami or Houston to northwestern South America. These are frequently the least costly fares. A good discount travel agency, located in any major metropolitan area, can usually save you 25-33% on the cost of a ticket.

Once in South America, your most important objective will be to generate more money than you spend on living. The first step, then, is to make a list of all your abilities and skills. Opposite, make note of how each of these assets might be useful in rural South America as a way of making money.

(Unfortunately, you will quickly discover that since you are not a citizen of the country, many income options are legally closed to you, e.g., the practice of medicine, flying a plane or engaging in any other occupations that require a license.)
Next, list your interests. Next to each interest, describe what it would require (education or whatever) to turn each interest into a skill. Then, in a third column, estimate the money making potential of each skill in rural South America. With this self-appraisal, you'll be in a position to fill in some holes or bone up in certain areas. For example, you might want to take a few courses in business, Spanish or Teaching English as a Foreign Language at your local college before winging south.

Once you know your assets, you can occasionally find short-term employment or the odd consulting job that pays well. I have a writer friend, for instance, who lucked into a job handling the media campaign for a presidential candidate in South America. I know several people who have gotten temporary work in computer repair and programming. I also have friends with medical degrees who supplement their income by providing health cared to North Americans living abroad. There are many such opportunities, but only you can determine which are right for you.

In the 1970s, a sizable number of blue-collar Americans traded in their homes for RVs, took their skills on the road and made a living peddling their services as they traveled around rural America. They called themselves 'Owlhooters.' They did everything from repairing cash registers to painting signs and, in short, did whatever was required to make a living. Similar skills could be put to use in South America. You might want to try a few tried and true 'owlhooter' skills for yourself. Some 'owlhooter' literature can be found in publications like the National Prospector's Gazette.

But while eking out an existence in South America is all well and good, bare survival is not what it's all about. The real goal of any business is to turn a profit. Consequently, you must sooner or later find something that you can legally buy and legally sell elsewhere for more. Since you are a small businessperson, your objective should be to turn a tenfold profit on a limited number of transactions. The goods you will be trading will, ideally, reflect your education, skills and interests. Now, go back to your list and note the items, products, artifacts and/or specimens about which you have some knowledge. For example, I have a couple of degrees in geology, so I often buy mineral specimens, gems and specimen gold.

Also, over the years I've taken a number of courses in art and antiques. I now know enough to keep my eye out for deals in European and US art, antiques and collectibles. Aside from formal courses, I've picked up a lot of useful information in fruitful hours spent in local libraries.

For example, if I were interested in weavings, I would try to find out as much as possible about the history of weaving, types of weavings, weaving techniques, buying and selling weavings, chemical versus natural dyes, etc. I generally try to pick up scraps of information that aren't commonly known. This often gives me an edge, a new way of looking at things. Also, I've learned a lot visiting museums. When possible, I try to meet the curator. Most curators, especially in South America, are more than happy to share a cup of coffee with a literate, Spanish-speaking North American. They are often a storehouse of specialized, useful, unpublished information and they are usually familiar with export problems and procedures.

It may be worth your while to cultivate faculty members from the local university, many of whom will welcome an opportunity to join with you on a project for a share of the profits. Even if you know what you want to buy, you must have the money to buy it. With US$5,000-10,000 in seed capital, you won't have a funding problem. However, this amount may exceed the contents of your piggy bank. If little capital remains after you've calculated the costs of a year's trekking, you may have to look further afield for business capital. As a rule, if somebody's willing to invest in your enterprise, a 50/50 splits of the profits is a fair arrangement.

Ideally, of course, it would be nice to join forces with someone who wants to import the very items you have some expertise in buying. While this is unlikely, there are, in most metropolitan areas, hundreds of small importers. First off, you'll have to get to know the honest ones and present them with an appealing business proposition. This is the standard way of obtaining the necessary funds. What sort of a deal can you strike? Try to arrange a flat bee above cost or, preferably, a flat percentage of gross profit. For example, if you buy an item for ten dollars and sell it for a hundred, your gross profit is ninety dollars and your net profit will be what's left after deducting the purchase price, the cost of transport, storage and marketing costs. I've found a workable arrangement to be a 75/25 split of the gross profit - the buyer getting 25%.

The method I prefer to fund purchases is an irrevocable letter of credit. This means that I cover the cost of purchasing the goods and recover my expenses upon shipment to my buyer/partner. You may prefer to devise some other business arrangement with your seller in the US or Europe, but I would strongly recommend that you work out a clear and straightforward system for getting paid. Otherwise, you will soon be most unhappy. Of course, if you can afford to make all your purchases out of your own pocket, you won't need a financial partner. Still, you may find that you need an agent or, less formally, someone to handle your business at home. A friend or relative who shares your interests and expertise can lead to the best arrangement.

Finally, one must find a market. Naturally, this will depend on the type of goods, the quantity and other factors. Some of my sellers have been successful selling on weekends. Others rented booths at the local flea market. Auctions are another possibility. Personally, I think commissions charged by auction houses are too high, but if you get the right prices for your merchandise, you can absorb the overhead. Still, there is another problem with auctions, and that is the time delay before the auction. Your merchandise may fetch a greater price by the time the auction rolls around, but you will be bound by the price you fixed earlier. In any event, learn all you can about auctions before you use them to unload your goods. It can save you many heartaches.

I have amassed a collection of seemingly good and feasible funding ideas over the years. They all share one notable attribute, namely they have not worked for me or for someone I know. I list them here as a warning to all.

1) Foundation Support. While at grad school, I made a concerted effort to get various foundations to bankroll certain travels and adventures which I thought would benefit mankind. I found that foundations are immune to impassioned please for grants of this nature.

2) Commercial Support. While corporations occasionally donate a kayak, backpack, food or other equipment, writing the letter, finding out who should get it, and mailing it to all who might come across with more than a paddle generally requires more time and effort than it's worth.

3) Media. While the New York Herald lavishly supported Stanley's search for Dr. Livingston, freelance writing is a chancy way to grubstake your meanderings. Not that your home town paper won't run the piece, but getting your name in print, while good for the ego, rarely covers your tab at L. L. Bean.
TV coverage is another possibility, but the equipment to get set up is expensive and the demand for freelance footage limited. On the other hand, if you happen to be the only cameraman around when a good story breaks, you can frequently cover it for multiple clients (this is called 'film splitting') and cash in, billing each client for expenses as well. TV stations frown on this practice, but put up with is when the film is good.

4) Expedition Outfitting and Guiding. Alas, the demand for adventure has declined since the 1960s. Also, people tend to prefer the services of Mountain Travel, Sobek and other large outfitters and are unwilling to take on the back country with a small expedition outfitter. Finally, the costs of marketing your services to North American clients can be astronomical and wipe out any hope of profits.

5) Drugs. There is a well organized business network in the South American drug trade. At present, they are not actively recruiting personnel. Also, this network happily submits to pressure by local governments to turn over would-be drug entrepreneurs from North America. As a new and small person entering this field, you are almost certain to meet some fellow Americans and learn all about the US Drug Enforcement Agency and what it can do for you.

6) Mercs (i.e., mercenaries) I'm always surprised at the number of North Americans who believe that lots of money can be made by blowing away Third World residents. Working conditions are hazardous and, fortunately, the demand for such services is infrequent.

7) Pre-Columbian Art. The illegality of smuggling Pre-Columbian artifacts, the high quality and percentage of fakes, the efficiency of customs officials and the ever soaring costs of bribery eliminate this ancient trade as a feasible source of income.

Finally, I have found it prudent to observe the following rules when buying commercially:

A.) Never buy anything from a seller who says he knows what the goods are worth in North America.

B.) Never buy goods in a location that is widely known for producing them. It's interesting to note that green street lights are rare in Bogota, because local merchants have found they can sell the glass to North Americans as emeralds.

C.) Never put more than 10% of your business capital into any single purchase. There are bound to be problems with fakes, poor quality, etc. The reason you need a high profit margin in the first place is to cover your losses from bad purchases.

D.) Give preference to items that can be easily shipped by air.

E.) Package goods as if they are going to be dropped into the US from 10,000 feet. You cannot afford damaged shipments.

F.) Hand deliver shipments to the airline and be sure to get a signed receipt as well as a shipping invoice.

G.) Be careful what you buy! What may be legally bought in country "A" may be illegal in country "B."

H.) Seek to establish long term relationships with reliable local residents.

Over 90%of small businesses in the US fail. The primary reason for this is that capital costs exceed profits. Buying only goods that can be sold at a high profit insures that your capital risks are limited to errors in buying. A major advantage in this line of business is that, as a buyer in South America, you will not be directly taxed. As a non-resident US citizen, your first US$75,000/year in salaried income is deductible. If you are making more than US$75,000 annually, you will have little reason to complain about the tax bite.

Anyone with average intelligence who is willing to wander around South America can make a living as a commercial trader. But remember, the greatest risks are at the beginning of any enterprise. If you carefully and objectively evaluate your assets, minimize your overhead, insure potential alternate income sources and identify your resale markets, you should be able to hold out in South America for years and eventually prosper.

If your enterprise prospers and you need additional funding, contact me. Over the years, I've found myself representing more and more money seeking investment in successful jungle traders.

Reprinted from South American Explorer, Vol 19, October 1988.
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Pacifica Tribune April 22, 1992
Page 12A
Letters to the Editor
Continued From Previous Page

The temple of doom

Editor:
When your article about Bill Cate appeared, I was with him in Malaysia. We were a day's march north of the Jalai River with Abdul Ramath. As dusk approached, it was decided to explore a cave about halfway up the side of a cliff. The climb would have been easy except we had hiked for hours at 90 degree temperatures and 95 percent humidity. After making the climb, I wanted to stay in the entrance room. But, the policy was the party should stay together.
We passed several old tiger kills in the back of the first room and crawled to the second room. It was full of beautiful cave formations. With Abdul in the lead, we crawled out of this room. Abdul insisted that we jump through an opening to reach the third room and discouraged sliding or use of hands or foot holds. After landing, I shined my light around and realized I was standing in a sea of spiders! (my second worst nightmare). Before I could get truly upset, Abdul shined his light on the walls. Every nook and cranny had wall-plaque-sized spiders waiting for a meal. We kept away from the walls.

Abdul picked up a stick. He began tapping on the floor and ceiling as he moved forward through a small crawlway we needed to use to leave this room. He was careful. It seemed like forever while he scouted out the next passage but, a minute later, he backed out in a hurry with a poisonous green snake in hot pursuit. He kept telling the snake politely to go away, it didn't. So, he golfed the snake across the room. The snake landed, coiled, angry, and advancing toward us. I crawled as fast as possible through the spidery crawlway after he checked it for snakes one more time.

The room was filled with flies, a million bats, and mountains of guano. Since it was dusk, the bats were leaving the cave en masse. Their bodies blackened a major opening to the outside there were so many! Abdul shined his torchlight on while poisonous bat snakes hunting dinner high above us on the walls of the cave. We crossed this room to leave through a tall narrow archway. Abdul couldn't dislodge another green snake hanging down from the rim of the arch. I stayed low and moved fast through the opening as the snake waved us on. We hardly noticed the climb down abrasive limestone and through the jungle, about a mile, where we camped for the night at another cave. My only comment made on our way back was, "l hope these pictures turn out because I am never going back "

Pacifica looks great after three weeks of traveling with Bill. My point about your article is to give you a taste of Bill's unorthodox way of exploring the world while he is doing business. This summer he expects to be in the Central Asiatic Republics of the former Soviet Union via Southeast Asia. This makes me a teeny bit nervous.

Dr. Linda Amezcua
Linda Mar Veterinary Hospital
Linda Mar Boulevard