Greetings from the Las Vegas Money Show where I have had the pleasure of meeting many of you in person.
Your Global Stock Investor portfolio was broadly flat this week as the market consolidated its gains. ArcelorMittal (MT) slightly missed consensus forecasts this morning. Nevertheless, I remain bullish about the prospects of this stock. As I write this hotline, the stock is actually trading up in Europe on strong guidance. Should there be any sell off in the U.S. market, it would be a great chance to add to your positions.
The current weakness in both Transocean (RIG) and Coca-Cola Hellenic Bottling Company (CCH) also make it a good time to pick some more stock on the cheap. The prospects for both of these picks remain strong. Millicom International (MICC) and iShares MSCI Brazil Index ETF (EWZ) both have strong momentum behind them. Overall, your portfolio is performing strongly with four of your 10 positions showing at least 35% gains, as of yesterday’s close.
PORTFOLIO UPDATE
Barrick Gold (ABX) barely moved this week, as the gold price continues to struggle. Because gold’s current trend is unclear, I’m keeping the stock at a HOLD.
Coca-Cola Hellenic Bottling (CCH) began to recover this week, as the stock price again approached the $45 level. The current oversold position in the stock offers a terrific opportunity to BUY.
PowerShares DB Agriculture (DBA) ended flat on the nose this week. Wheat has sold off, while corn is hitting record highs. DBA is sputtering and I’m keeping it at a HOLD.
iShares MSCI Brazil Index ETF (EWZ) corrected slightly but is now back up a hair’s breadth under record highs. I’m very bullish about what has been the number #1 global market in 2008. EWZ is a strong BUY.
CurrencyShares Japanese Yen Trust (FXY) was flat this week and continues to be technically oversold as markets strengthen. This hedge against market downturns remains a defensive BUY.
Millicom International (MICC) is back up to near record highs as African cell phone properties continue to be subject to takeover speculation. Use any pullback as an opportunity to BUY.
ArcelorMittal (MT) announced this morning that its profit climbed 5% in the first quarter to $2.37 billion as strong worldwide demand allowed it to hike prices, despite higher costs. That performance missed analysts’ forecast for a profit of $2.55 billion. Sales in the first three months of the year rose 22% to $29.8 billion from $24.47 billion a year ago as shipments rose 8%. Chief Executive Lakshmi Mittal said demand outside Europe and the United States is weathering global uncertainties and unprecedented raw material price increases thanks to the "continued industrialization of a number of key emerging economies" in Asia and Eastern Europe. The stock is actually moving up in pre-market trading, based on the company’s strong guidance, and remains a BUY.
Potash (POT) traded in a narrow range this week, and has yet to rise back up to its record highs. Morningstar called Potash the Saudi Arabia of Fertilizer. Potash owns 22% of the world’s potash production capacity, while Saudi Arabia accounts for roughly 13% of global oil production. With global demand strong for fertilizer, Potash remains a top BUY.
Transocean (RIG) fell along with the rest of the oil sector Monday as crude prices pulled back from record highs. Meanwhile, analysts have increased their forecasts for average drilling rates by $50,000 per day. Deep water rigs are now expected to fetch an average of $600,000 per day during the next three years. And Transocean controls seven of the 16 ultra deepwater rigs available to market through the end of 2010. That’s a license to print money. The stock is a BUY on current weakness.
Elements Rogers International Commodity ETN (RJI) hit record highs this week before pulling back slightly. This diversified commodity play is a safe and steady BUY.
P.S. Join my Eagle Publishing investment colleague Mark Skousen and me for FREEDOM FEST 2008, "The Trade Show for Liberty," on July 10-12, 2008, Bally’s/Paris Resort. FreedomFest will feature more than 88 speakers, 100 exhibitors, and 1,000 attendees. Guests will include John Mackey, CEO of Whole Foods Market, Congressman Ron Paul, a 2008 Republican candidate for president, Steve Moore, of The Wall Street Journal editorial board, David Boaz, vice president of Cato Institute, Robert Poole, Jr., of Reason Foundation, Jeremy Siegel, "The Wizard of Wharton," and Rick Rule, one of the country’s top money managers. Also hear Frank Holmes, Doug Casey, Larry Abraham, Ron Holland, Frank Trotter, Bert Dohmen, Keith Fitz-Gerald, Peter Zipper, John Mauldin, and many more.
