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

Chris Mayer (Penny Sleuth): “If you can tell me something else where the fundamentals are so attractive…I’d be happy to put my money there,” said Jim Rogers, the famed investor and self-made billionaire in a recent interview. “But I don’t know of any other place.” What’s he talking about? Today, we take a look and invest right alongside his idea. And it should start to pay off with the arrival of the first swallows of spring in 2010. It’s also timely now — in this weak-kneed economy — because it has traditionally held up well even in when the economy is on the ropes. Even the Great Depression couldn’t put this thing down. We start with simple truths. The world’s population has more than doubled since 1950 — from about 2.5 billion to 6.7 billion. By 2050, there will be more than 9 billion people on the planet. Almost all of this growth will come from undeveloped markets such as China and India. And they will all be doing one thing, for sure — eating. Now, hang on. I know that is a banal insight by itself, but this story has layers like a tiramisu. The second layer is the mix of food eaten, which is important. These undeveloped economies are getting richer. Predictably, as people everywhere have done and continue to do when they have a little more money in their pockets, they change their diets. They spend more on food. The average Chinese spends 40 cents of every additional dollar earned on food. In India, it’s about 70 cents of every additional dollar. What do they buy? Read the rest of the story at PennySleuth.com .

Tags: agriculture, billionaire, Chris Mayer, earned-on-food, economy, even-the-great, featured, financial news, food in india, great depression, investor, pockets, ropes, water
Posted November 11, 2009 by under Contrarian Investing

World stocks hit a 12-day low on Monday, depressed by recent weak U.S. economic data and failing to find support from the G20 summit, while the yen attracted fresh flows to hit an eight-month high against the dollar. Weaker-than-expected U.S. housing sales and durable goods orders on Friday drove U.S. stocks lower, and world and European stocks followed that trend on Monday. Leaders of the Group of 20 rich and developing nations pledged on Friday to bring the global economy back into balance but their statement contained few surprises and investors are already looking ahead to U.S. employment data at the end of this week. Global equities and other higher risk assets have risen sharply in the last six months on growing optimism about the economic outlook, but markets are starting to run out of impetus, analysts say. “Investors are a little bit reluctant to add to their risk positions,” said Koen De Leus, economist at KBC Securities. “The market is going to have a very good look at macroeconomic numbers this week. If some of these figures disappoint, then the market is going to go down further.” Analysts are starting to question whether the global recovery is V-shaped, or if it could be W-shaped, with a second dip to come. The MSCI world equity index was down 0.52 percent at 282.94, bringing losses since Sept 22 to 3 percent. U.S. stock index futures , however, were indicating a slightly stronger open on Wall Street after the market scored a third consecutive day of losses on Friday. The FTSEurofirst 300 index hit its lowest in nearly three weeks before trimming losses to 982.53, down 0.14 percent from the U.S. close. GERMAN STOCKS UP German stocks , however, rose 1.3 percent with particularly strong gains in utilities E.ON and RWE , on expectations of longer lifetimes for German nuclear power plants as a result of the German election. German Chancellor Angela Merkel’s conservatives won a weekend parliamentary election with the pro-business Free Democrats (FDPP), enabling her to end her awkward four-year-old partnership with the Social Democrats (SPD). “(This) government provides the greatest opportunities for equity market-friendly reforms compared to other party combinations,” said Tammo Greetfeld, equity strategist at Unicredit, in a client note. The yen, typically regarded as a safe-haven currency, surged to an eight-month high against the dollar as Japanese officials waved off any plans to stem the currency’s rise. The yen later gave up some gains as Finance Minister Hirohisa Fujii changed gear on his comments during the course of the day, saying yen gains were becoming one-sided just hours after saying the rise was “not abnormal”. The dollar fell as far as 88.26 yen before trimming losses to 89.35, down 0.31 percent. However, the dollar hit a 2-1/2 week high against an index of currencies and a 13-day high against the euro as the U.S. currency also attracted safe-haven flows. Funds are starting to shift money home ahead of the quarter-end later this week, analysts say. Crude oil dipped 20 cents to $65.82 a barrel . Euro zone government bonds also benefited from safety trades, with 10-year yields briefly hitting a one-month low. December Bund futures were up 5 ticks, trimming earlier gains. Sept 28 (Reuters)

Tags: Angela Merkel, democrats, european stocks, finance, financial news, g20 summit, german, german stocks, global recovery, international investing, party, social, week
Posted September 28, 2009 by under Contrarian Investing