After several strong weeks for your Global Stock Investor portfolio, the last few days have seen most of your holdings pull back from their recent highs. The good news is that the CurrencyShares Japanese Yen Trust (FXY) hit a record high this week, and all but one of your Global Stock Investor picks is still showing a profit. You should be pleased, especially considering that only a handful of global markets are up so far in 2008, including Pakistan and Saudi Arabia, both of which are no-go zones for all but a few U.S. investors.
So what has been the #1 global market so far in 2008? Brazil, a country you have bet on in your Global Stock Investor portfolio through the iShares MSCI Brazil Index ETF (EWZ) since September. Just how good a call has Brazil been? Yes, EWZ up more than 25% since you bought it — a massive out-performance compared with say, China, which is now down well over 35% for the same period. But perhaps more surprisingly, Brazil has overtaken China, India and Russia as the world’s largest emerging stock market, as measured by the MSCI global emerging markets index.
The one exception to the good news in your portfolio is India’s ICICI Bank (IBN), which hit your stop price this week. The investor in me says that the fundamentals for this stock are firmly in place for “India’s Citibank.” The trader in me says that the “Citibanks” of the world are tough places to make money right now, whether Indian or otherwise. That’s okay. Markets have their seasons, and ICICI Bank will be back. But as your positions in Global Stock Investor have shown, there are more profitable fish to fry over the medium term in global markets.
My top picks continue to be the bets on the agricultural commodities boom — Potash (POT), up 44.64% since October, and PowerShares DB Agriculture (DBA), up more than 8% in the last three weeks. Barrick Gold (ABX), up 23.40% since November, will continue to shine as gold breaks through the $1,000 per ounce barrier. The Japanese Yen (FXY) is a solid, if unspectacular, position. That is until you consider that the S&P 500 has dropped by more than 10% and the Yen is up about 12% since we recommended it back in August. And as I noted above, if there is one country to bet on this year, it’s Brazil (EWZ). That said, all of our other picks below continue to remain BUYs.
PORTFOLIO UPDATE
Barrick Gold (ABX) hit a record high on Monday, before selling off. It should continue to do well as the yellow metal approaches the $1,000 mark. The world’s largest gold miner remains a BUY.
Coca-Cola Hellenic Bottling (CCH) stayed steady this week. Piraeus Securities, one of Greece’s leading brokerage firms, raised its target price to 31 Euros (over $47) on this stock. This is one for the long term and remains a BUY.
PowerShares DB Agriculture (DBA) edged slightly down this week. With agricultural prices hitting the headlines, and the ETF technically overbought, you can expect a correction at some point in this red-hot ETF. But the agricultural boom isn’t going anywhere, and DBA remains a BUY.
iShares MSCI Brazil Index ETF (EWZ) sold off slightly this week. Nevertheless, the combination of Brazil’s strong performance, and China’s collapse, make Brazil the biggest emerging market on the planet. EWZ is a BUY.
CurrencyShares Japanese Yen Trust (FXY) now has nudged into double-digit percentage gains. With the Japanese yen now at a three-year high and up almost 12% since August, the yen’s performance just kind of sneaks up on you. The safest bet in the Global Stock Investor portfolio remains a BUY.
Millicom International (MICC) sold off this week with the market. It’s a good time to get another bite at the Central American and African telecom apple. The stock is a BUY.
ArcelorMittal (MT) was boosted by an analysis from investment bank Credit Suisse that shows that steel prices are headed higher. Demand has grown faster than supply for each of the past six years; global inventory is low, and "buying acceleration" seems to be occurring. Steel prices are up more than 40% since October, which a Credit Suisse analyst believes is "the beginning, rather than the end of the price increases in the U.S. steel sector over the next six to 12 months." The stock remains a BUY.
Potash (POT) consolidated over the week. The stock’s current pullback is a good time to add to your position. The stock remains a BUY.
Veolia Environnement (VE) opened a new R&D center in Israel this week. Its tentacles extend everywhere on the planet. Your bet on “blue gold” remains a 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.
