Nicholas Vardy
GLOBAL STOCK INVESTOR HOTLINE UPDATE 44
Global markets have gotten off to a weak start this year — the weakest, in fact, in recent memory. The markets’ somber mood notwithstanding, there were a few bright spots in the Global Stock Investor portfolio this week — confirming that betting on the right trends can, and does, matter.
A Global Bet On Booming Soft Commodities
In last week’s Global Guru, I noted that soaring food prices and the soft commodities boom are one of the major investment themes set to continue in 2008. While the rally in hard metals may be vulnerable to a global economic slowdown, the rising prices in your local grocery store are just beginning. Food price inflation here in the United Kingdom is running at a 10-year high. The prices of soft commodities like corn and wheat seem to be hitting a record high almost every week. Globally, the price of rice has risen by 50%, cattle by 40% and wheat by a third during the past two years.
GLOBAL STOCK INVESTOR HOTLINE UPDATE 43
The long-expected Santa Claus rally of 2007 never arrived. That means that Q4 of 2007 marks the first time since the dotcom collapse in 2001 that global markets failed to rally in the closing quarter of the year. But global markets’ somber mood notwithstanding, two of your own Global Stock Investor picks put in stellar performances in Q4, with both Potash (POT)and Millicom International (MICC) soaring 31.4% and 40.1% respectively. That’s exceptional outperformance in the face of significant market headwinds.
Doubling Up on the Russian Telecom Story
With markets acting choppy heading into the new year, it is a challenging time to pick trading ideas that are not only fundamentally strong, but also offer solid short- to medium-term trading opportunities. As our positions in Mechel (MTL), up 31.05%, and Vimpelcom (VIP), up 58.62%, have shown, Russia is virtually the only global market that has displayed resilience in the face of Mr. Market’s recent mood swings. This week’s Global Bull Market Alert pick, Mobile Telesystems OJSC (MBT) — Vimpelcom’s rival in the Russian cell phone market — doubles up our bet on one of the few themes in global markets that has performed well in the last six weeks or so.
GLOBAL STOCK INVESTOR HOTLINE UPDATE 42
The choppiness in global markets continued this week, defying expectations of a traditional Santa Claus rally. But with the world awash in liquidity, and big money making its bets for 2008 (hint: it probably won’t be on the United States) the weight of money still is behind our Global Stock Investor picks. With our global megatrends still intact, it’s a good time to add to your positions. As Warren Buffett advises, "Be greedy when others are fearful. Be fearful when others are greedy."
A Portfolio Well-Positioned For Shaky Global Markets — And Taking Some Double- and Triple-Digit Profits
It has been another bumpy ride in global markets this week. With benchmark indices in five Asian markets — Australia, Hong Kong, Singapore, India and Taiwan — sinking more than three percent after signs of accelerating inflation in the United States on Friday, the start of this week may be a bit rough. But it is important to keep in mind that the Fed’s interest rate cuts boost global liquidity which, in turn, bodes well for global stocks in both the medium and long term.