Betting Big on Emerging Markets

The big story in your Global Stock Investor portfolio is the remarkable bounce in emerging market stocks.

Three short weeks after the Japanese earthquake, the MSCI Emerging Markets Index is now trading at record highs.

For a more detailed discussion of this, I’d refer you to yesterday’s edition of The Global Guru.

As you know, we had a rather large “watch list” as we exited emerging markets early in the year, and you were stopped out of several of your positions subsequent to the Japanese earthquake.

But by this week, many of your watch list positions are trading back above their 50-day moving averages.

So here’s a list of the positions that I am recommending you re-enter this week:

Agrium Inc. (AGU), your bet on agricultural fertilizers. Place your stop at $84.00.

iShares MSCI Singapore Index (EWS), an ETF on this highly developed Asian market. Place your stop at $12.40.

iShares MSCI Turkey Invest Mkt Index (TUR), the “unheralded” BRIC. Place your stop at $55.50.

Freeport-McMoRan Copper & Gold Inc. (FCX) should benefit from both a bounce in copper and in gold. Place your stop at $46.00.

iShares MSCI Malaysia Index (EWM) is trading back up near record highs, almost overnight. Place your stop at $13.75.

iShares MSCI South Korea Index (EWY) also has hit record highs. Place your stop at $56.00.

iShares MSCI Taiwan Index (EWT) is a relative laggard, but is now also trading above its 50-day moving average. Place your stop at $13.70.

Las Vegas Sands Corp. (LVS) is our bet on “Asia’s Las Vegas.” Place your stop at $35.50.

Now, I admit this looks like we’re going “all-in” on emerging markets and that this is a rather large bite to take from one week to the next.

That said, in my experience, that’s just the way emerging markets work: sharp sell-offs, followed by big bounces.

If you don’t want to put this much money to work at once, I suggest you take half-sized positions in these picks — and then add to the ones that end up doing the best.

Portfolio Update

The WisdomTree Dreyfus Chinese Yuan Fund (CYB) dipped .32% in the past week. This position has been essentially trendless going back to early November. But rules are rules and it now is above its 50-day moving average, so CYB is a BUY.

WisdomTree Japan SmallCap Dividend Fund (DFJ) dipped 6.33% last week as continuing problems with the troubled nuclear plant and challenges in returning the economy to normal weighed down the market. Once Japan’s inevitable recovery starts to take hold, DFJ should rebound. DFJ remains a BUY.

Global X FTSE Nordic 30 ETF (GXF) ended the week 2.52% higher, hitting a record high of $21.60 as Europe’s markets continued to rebound. The Swedish economy is at the cutting edge of global economic recovery and GXF remains a BUY.

Market Vectors Indonesia ETF (IDX) rose another 3.4% this past week, and now is trading right back up near the record highs it hit in November. Indonesia is a BUY.

JinkoSolar Holding Co., Ltd. (JKS) dropped 3.38% in the past week. Equities research analysts at Brean Murray initiated coverage on shares of JKS with a “buy” rating and a $32.00 price target on the stock. Trading close to its 50-day moving average but still slightly below it, JKS remains a HOLD.

Market Vectors Russia ETF (RSX) rose 3.1% this past week. I know you hate it, but Russia remains the best-performing emerging market of 2011. RSX also just crossed the $4 billion in assets under management market. Trading above its 50-day moving average, RSX still is a BUY.

Universal Display Corp. (PANL) rose yet another 10.73% last week, breaching the $60 level for the first time. This stock is having an unbelievable run. Trading well above its 50-day moving average, PANL is a solid BUY. Raise your stop to $45.00.

Ultrashort Lehman 20+ Year Treasury (TBT) dropped 1.64% during the past week. The fundamental case against U.S. Treasuries remains intact. But with TBT now trading below its 50-day moving average, it remains a HOLD.

Vale S.A. (VALE) jumped 3.84% during the past week, as emerging markets came roaring back, even as shareholders nominated a new CEO who has already spent about 30 years at Vale in various consulting and permanent roles. With VALE trading again above its 50-day moving average, it is back to a BUY.

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