Foreign direct investment (FDI) is a measure of people's and institutional confidence in a nation's prospects. The relative risk of a nation's treasury bonds can act as a general barometer for the country in general.

The United States provides a bad example to follow in this analysis, as the principle of US Treasury bonds being backed merely by “the full faith and credit” of the United States makes these bonds seemingly invulnerable, regardless of current economic or social conditions. Similar virtually-no-risk scenarios are in place for much of the developed world, whether warranted by current conditions or not.

IDCA Research has created a more tangible process for the rest of the world that compares a nation's bond rating with its Digital Readiness Index rating (see description of the Index in the Country Snapshot below), to see how much arbitrage (positive or negative) exists in that particular country.

US bonds of course look overrated in this process, but are an exception that proves the rule: dozens of countries in the world appear to have underrated bonds, with ratings driven by headlines, a flawed perception of progress is being made in the face of obstacles, or a lack of nuanced understanding of local conditions.

This week's featured country, Colombia, provides a solid example of this situation. Run through the IDCA Research algorithm, its bond rating (currently one level below investment grade) seems to be a little underrated. Given the technological and sustainable dynamism in Colombia at the moment, this country looks to be a country to be taken more seriously than traditional analysis would warrant.

Other nations that appear to have underrated ratings according to this process include Sierra Leone, Zambia, Ethiopia, Costa Rica, and Turkey. There are several others, and there are many countries that appear to be overrated, though they won't be named here.

The Index actually carries two sets of findings: one that looks at bond ratings for the overall Digital Readiness score, and one that considers Economic factors (including digital infrastructure) only. Digging into this data and integrating its findings into one's investment thought processes does represent a form of playing with fire: economies are astoundingly, confoundedly complex, IDCA Research is not an investment agency or any type of investment institution, so the usual caveats (eg “past results do not guarantee future performance,” etc.) must be applied IN CAPITAL LETTERS here.

That said, people and institutions that are looking for rare opportunities, for diamonds in the rough and unexpected pleasures, may wish to consider this process and get into the weeds with us.