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Latest Comments337 Comments
Four Brazilian Profit Plays
If you call 450$ to 750$ a month middle class as that is the class C grouping. I don't know how many of you actually been to Brazil- but that is the price range for designer sunglasses. This 'middle class' tag is very decieving.
Really- I am extremely bullish on Brazil long term-but one must understand the timing of this market to prosper.
Four Brazilian Profit Plays
Inflation has hit hard- commodities are under attack- and some of you are missing some of the finer points of Brazilian investing. At times- up to 70% of capital in Bovespa traded stock has been foriegn and the money flow has been outbound.
In order to understand Brazil you must first understand the commodities market. Half of Bovespa is based on commodity producers/users. 24% of Bovespa is weighted in just two companies!
(PBR and RIO). If you do not understand commodities- you can't comment on Brazil with authority.
#2- If you do not understand the economics of Brazil (esp. interest rates and inflation) you are at an extreme disadvantage.
Taking a company- breaking down its balance sheet- and looking at the TRAILING p/e- and eps- means nothing if earnings potential is not there. Furthermore- institutional money (both Br/US moves Bovespa stocks - not retail investors. These plays are largely out of favor in the short term.
Like I said earlier- your best bets are short term (bear rallies)- don't get greedy - take your 5 point bump and get out. You will be able to do this for a couple of months. Look at the charts. The good news is that the class A shares are so depressed you have some level of resistance and limited downside.
Do your homework- learn about the companies- and if you are going to enter long term- dip a toe in before you stick the whole foot in the water (remember the paranas!) Don't forget the 2010 leaps when you feel you have hit bottom.
As far as PBR- its a great company but Lula (the 3rd thing you need to understand about Brazil) is starting to get greedy- and when that happens - watch out.
www.southamericanstock...
Petrobras: Buy and Sit Tight Like Soros
Petrobras: Buy and Sit Tight Like Soros
Listen closely- if you are following Soros- his timing is way off this year. He bought an even bigger block of Vale (RIO) as its stock was cresting this year- only to sell it off at a huge loss (see market folly's article). He is like a lot of the old (really old) money men (see TBoone 'short oil' Q-1) who made their money but have lost the touch and seem to be a quarter behind the trend nowadays.
I also agree with Frankfort/Hessen.
Listen- I have spent a lot of time in South America- and have positions in Bovespa and Adrs- and there are opps short term but for me they are swing trades (5 point pops almost every week).
I do, however, feel that many of the best Brazilian plays (and SAM in general) should be tracked closely if you are a long term player- the bleeding is not over- but you should be ready to pull the trigger when it is. There are 2010 leaps on some of the adrs as well- locked in price/less capital intensive.
See my blog at:
www.southamericanstock...
Feel free to join up
Four Brazilian Profit Plays
The author's timing is obviously off due to the reasons you mention (not to mention the commodities correction).
But- as a NON-clueless American who has spent much time in Brazil- has vested interest in both Bovespa traded stocks- as well as ADRs- I must say NOW is the time to learn the Brazilian market- as buying opps are forming over time.
Jennifer good effort on the article- your timing is off- but you are on the right track.
www.southamericanstock...
Check out my blog for our educational series on Brazil.
Gato- you are welcome to join as we would appreciate your knowledge but in a more subdued way.
Hedge Fund Tracking: Blue Ridge Capital (John Griffin)
The posts themselves have little value as he is just compiling data that is readily available. Brilliant strategy market folly- I bet you are making a lot of money for doing virtually nothing. Very bright.
On Visa and Commodities: An Addendum
Jump into commodities right Frank- good luck buddy- does 'global slowdown' mean anything to you?
Hedge Fund Tracking: Tremblant Capital
On Visa and Commodities: An Addendum
Second statment- I also stand by that as well. Where the inaccuracy Frank?
No mistakes in either statement.
On Visa and Commodities: An Addendum
Let's talk about change- how about a repealed cap gains tax cut to make your investing life even more difficult? Does that sound good to you?
How about a tax increase to penalize you for making money in the first place- does that sound good to you?
Great solutions right now- increase taxation on the small percentage of people that actually fuel job growth- and penalize people for making investments- just what we need!!
You and 'down at 3500' fit well together.
On Visa and Commodities: An Addendum
Great comedy! I suppose you believe in the Mayan calenar and that the world is coming to an end in 2012?
As far as stolen oil from Iraq what a joke... You must be a believer in "Change"- a bumper sticker voter. Iraq is sitting on close to a 100 billion dollar's of excess cash and we can't even get those barbarians to pay for their own security. People forget that we have done them a favor- and even they are too stupid to recognize that we delivered them from enslavement. I'm so sick of idiots that hate our country. Why don't people like you just leave- go live in a socialist country for a while if you don't like America.
On Visa and Commodities: An Addendum
A few things- I would be careful making the claim that V will surpass MA. MA has a small float and will continue to prosper. People forget that other than the Amex (AXP) settlement MA's numbers were not bad at all. The problem with blowout earnings quarter after quarter people's expectations are unrealistic- which hurt MA.
As far as V- no stock is immune to a bear market especially when misunderstood by over half of the investing community. More than being tarred with the 'financials' brush- V is being hurt by fear of a global econ slowdown- which, in the end- will not impact V's bottom line significantly (as we watched recently). I too believe that V will develop its second wind this year.
As far as the comm/metals/oil space goes- yes- I have been saying all along that LONG TERM- it is crucial to get involved. The post 2010 era will be all about resources. But Frank- without beating the past to death- you were recommending these sectors at the top of the market when I was warning people that they should take profits or avoid making new investments in them. You are also making a mistake right now - as there is still room on the downside and the bleeding has not stopped yet.
For example, many metals stocks are increasing- and will continue to outstrip demand for some time- regardless of how much they have corrected. Natural gas is a another prime example as the recent dramatic increase in drilling efforts will soon be flooding the market with a significant over-supply. Ag stocks- and stocks in general don't trade purely on fundamentals. While the valuations of Potash and Mosaic may look great on paper these plays are out of favor with institutional money right now- and it is not retail online accounts that move mountains. In other words- your thesis is correct, but- once again- your timing is off.
This is the time to do your homework to sift out the absolute best of breed plays- and, in some cases, begin building a position. BUT- there is still room on the downside. Oil could bottom out at 100$ and gas has another buck or two per MCF. Your ag stocks may have another 20% before this is over. Opec will eventually reverse course and cut production, and of course further difficulties with Georgia (the country), a hurricane here or there- and a few other supply issues could create a price spike. But, reality is that domestic and global demand has slowed down quite a bit and the majority of speculative positions have been unwound and are also out of favor with institutional money (the main driver of the market).
So, in closing- we have some time- but you are partly right. Now is the time to do your homework- track your selections and even move slowly into the market. Do not forget you can lock in a price without tying up as much capital by picking up some 2010 Leaps- or start small and work your way into a position over time- now is not the time to go 'all in'.
Some of the great South American Stocks (comm AND banking) are beginning to shape up as buys right now as well. Its funny that you have picked these topics as I have addressed all of them on a few of our blogs:
Visa: www.visawinners.com
South American Comm Plays: www.southamericanstock...
The importance of resources going forward:
www.virtualwallstreet....
Keep it up Frank- you are improving- and your timing is getting better.
Hedge Fund Tracking: Tremblant Capital
Although I am very pessimistic of 'anonymous' authors- I must say I took a look at your blog and like it very much.
Yes- it is great to follow what the funds are investing in- the increase in Gafisa was interesting -but not suprised by tremblant or atticus taking big V stakes- and look like they picked up some MA on the correction.
Interesting posts- and great link setup.......
AmEx's Pain Likely Discover's Gain
AmEx's Pain Likely Discover's Gain