Media Blog Review

Louis Basenese, Small Cap and Special Situations expert at Investment U , analyzes market forces in – and the potential of – Brazil. Louis Basenes ( Investment U ): Hundreds of millions of Chinese citizens are on a crash course with the middle class. A study from The McKinsey Quarterly supports this well-documented phenomenon, which estimates that it will take two decades before the Chinese nouveau riche reaches its full spending potential. In turn, they’re convinced that decades worth of profits are up for grabs. I’m not about to refute that claim here. But instead, I want to caution you: Don’t be blinded by the euphoria over Chinese consumers and overlook an equally compelling opportunity in another emerging market. Let’s head down to Brazil and I’ll explain why – along with the best way to profit, of course… Sizing Up Brazil’s Profit Potential Okay, I get that the scale of the Chinese opportunity – a population of 1.31 billion people, compared to Brazil’s 192 million citizens – dwarfs Brazil’s. But that doesn’t mean the profit potential is any less. On the contrary, in fact… I’d actually say it’s greater when it comes to tapping into a blossoming middle class. In this regard, Brazil boasts several notable advantages over China… It’s a democratic nation, not a communist one. Its population is much younger – the median age is 28.3, compared to 33.6 in China. Brazil is far less reliant on exports. Only 14% of Brazil’s GDP comes from exports, compared to 35% from China. It already possesses all the natural resources necessary (and then some) to support its booming economy. Meanwhile, China needs to go out and gobble up foreign assets to ensure it can keep feeding its economic machine with enough oil, gas, coal, iron ore, etc. But most important of all is the cultural difference. The Chinese are notorious savers, yet Brazilians love to spend, spend, spend. And don’t just take my word for it. As Illan Goldfajn, Chief Economist at Brazilian bank, Itaú, reveals, “If the world is looking for savers, Brazil is not much good… But if it’s looking for consumers, then we might be able to help.” Click here for the rest of Mr. Basenese’s analysis at Investment U.

Tags: analyzes-market, Brazil, brazilian, China, chinese, cultural, financial news, illan-goldfajn, international investing, Investment, louis-basenes, louis-basenese, mean-the-profit, potential, profit
Posted December 9, 2009 by under Contrarian Investing

Gold hit the big “quadruple digits” while we were all relaxing on Labor Day. To be sure, it was just the December contract, which has since pulled back to US$997. But we haven’t seen US$1,000 since February, back when we had an insolvent financial system and a meddling government printing trillions like toilet paper. Nowadays, we’ve got an insolvent financial system and a meddling government…but we’ve also got a questionable stock market rally too (one driven by the unprecedented volume on bailout stocks, might I add). Throw in growing Chinese demand and jewelry-buying season in India, and you just might be looking at a foothold in the US$1,000/ounce range. “My forecast for gold in 2010 is $1,250 to $1,350 an ounce,” says our Investment Director Eric Roseman, “I think we’re long overdue for a major break-out north of $1,000 that will easily crack the March 2008 all-time high of $1,033 intraday.” Source: Global Investor: Gold Breaks $1,000/Ounce

Tags: 2008-all-time, bailout-stocks, chinese, crack-the-march, director-eric, global investor, gold prices, India, international investing, invest in gold, Investment, major-break-out, matthew collins, stock-market, unprecedented
Posted September 8, 2009 by under Contrarian Investing

The commodity markets are surging today. Are the bulls charging because of investor fear or is something else going on? Here’s the answer. There is a buzz in the commodities markets this week. Just about anything that can be pulled from the ground is surging in value. Everything, that is, but natural gas. Most notably, gold is just about ready to reach over the critical $1,000 level, proving that investors are looking for safety. Even without a hint of inflation, the precious metal has surged by over 5% so far this week. The quick run means the world’s gold miners are surging in value. The more leverage packed into their balance sheets, the higher their prices are going to go. So far, Yumana Gold (NYSE: AUY ) is up by nearly 20% this week, while AngloGold Ashanti (NYSE: AU ) is up by over 15%. It is a similar situation for the silver industry. As investors search for tangible value, the silver industry is taking its investors on a wild ride. One of the more popular ways of playing the trend, the iShares Silver Trust ETF (NYSE: SLV ) was up by as much as 5%, taking the week’s gains into double-digit territory. TFN Strategic Trader subscribers love the action. Our call options are worth 66% more this afternoon than they were this morning. The juicy story Now, I realize you come to TFN sight looking for more than the usual take on the day’s news. Fortunately, our friends over in Russia are creating more than enough action to feed our appetite for story material. As if the government-centric action unfolding around the Chinese commodity market was not enough to prove my prediction and profit potential of the “Commodities Carry Trade,” the Russian government is stepping into the ring to create some action on its own. Unable to secure a firm economic future through normal economic means, Putin is “calling” for the country’s banks to start buying Mechel’s (NYSE: MTL ) debt. There are also rumors of strong tax breaks heading towards the large Russian miner. Not only is this yet another wrinkle in my Commodity Carry Trade theory, it helps prove that the effort truly is becoming a global phenomenon. With their economies weak and the world’s banking industry even weaker, governments are quickly turning to the commodities market for their financial security. Why invest in paper backed by a desperate government when you can invest in a commodity the world will need no matter what happens in the coming years? No questioning the profit potential While there are lots of facets affecting this trade, one thing that is certain is it will be extremely bullish for the commodities market. We are seeing a mere glimpse of things to come. Once demand surpassed production… stand back. Prices will soar. I have a fantastic way to take advantage of this situation, but I absolutely cannot give it away to a wide audience. Its value was up by nearly 50% today with a trading volume of just 287 trades. Imagine what would happen if thousands of eager investors suddenly jumped in. If you want me to email you with the trade to make, just click here . Finally, just to prove there is an exception to every rule, natural gas prices are hitting yet another new low today, dropping the to a paltry $2.50 per million BTUs. Could it be that foreign investors want nothing to do with an American-based economy? Or is the bearish action a result of the growing inventory glut across the globe? Now that some of the world’s most powerful governments are getting in on the action, the commodity trade is not going anywhere anytime soon. This is exciting stuff that is going to drastically change the commodities industry. The situation has profit opportunity written all over it. I say we take advantage of it. Source: Russia’s Maneuvering Boosts the Commodities Market

Tags: action, auy, chinese, commodity, financial, Gold, gold prices, mtl, Russia, russian, silver, week, world
Posted September 4, 2009 by under Contrarian Investing