Forum Haiti : Des Idées et des Débats sur l'Avenir d'Haiti
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 Why are we investing in the most hated country on earth

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Le gros roseau
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Nombre de messages : 9664
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Date d'inscription : 21/08/2010

Why are we investing in the most hated country on earth Empty
MessageSujet: Why are we investing in the most hated country on earth   Why are we investing in the most hated country on earth EmptySam 14 Déc 2013 - 7:04


Why We're Investing In The Most Hated Country On Earth

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Brazilian stocks are the cheapest they've been in nearly 10 years. The last time they were this cheap, the Bovespa Stock Index (Brazil's version of the S&P 500) soared over 100% in less than twelve months.

Unfortunately, I bet many of you wouldn't think twice about investing in a country like Brazil. Most people simply dismiss the fifth-largest nation in the world as just another "ultra-risky" growth play.

To those investors, all I have to say is you're making a big mistake.

Here's why...

Prior to the financial crisis, Brazil was the darling of Wall Street. Not only was the country seeing rapid economic growth, but commodities -- Brazil's primary export -- were also in high demand.

Those tailwinds drove the Bovespa from less than 8,623 points in 2002 to 72,592 by 2008 -- a 741% gain in just under six years.

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Flash-forward to today and Brazil couldn't be more hated. While the S&P 500 is up nearly 22% since January, Brazilian stocks have fallen 20% -- posting one of the worst performances among global stock markets year to date.

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Why are investors down on Brazil?

For one, lately the country has been riddled with political turmoil. The Brazilian president -- a Marxist female by the name of Dilma Rousseff -- has proven terribly ineffective in quelling citizens' concerns about rising price levels. In fact, just this summer, 100 million people congregated in cities throughout the country to protest mounting public transportation costs.

But these struggles are nothing more than a by-product of a developing nation. As a country grows and its middle class expands in size and power, this segment of the population starts to demand more from their government. The recent unrest is merely a statement by the Brazilian people that they're tired of being treated like third-world citizens.

If that weren't enough, investors are also concerned about Brazil's slowing economy.

Andy Obermueller talked about Brazil's slowdown in the October 22 issue of Game-Changing Stocks. In his essay, he explained why the country's economic problems should be nothing more than a short-term obstacle. As he said:

[Brazil's] economy, which posted 7.5% growth in 2010, the best in a quarter-century, has slowed. But it hasn't stopped by any stretch of the imagination. Some of the forecasts I've seen call for growth of 2.5% for 2013, which exceeds what is expected and has been achieved in the United States of late?

But beyond a rather blah short-term, International Monetary Fund (IMF) projections thereafter look far better, as you can see from the table.

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I mentioned one of the reasons for Brazil's positive economic outlook earlier -- the rising middle class.

According to The World Bank, Brazil's middle class has expanded 40% in the last 10 years, more than any other Latin American nation. The increase means this group now represents over 52% of the country's population.

That's a big deal. The middle class is the biggest part of any developing economy. As this group expands, so does the amount of money they have to spend on the country's goods and services. The more they spend, the more the economy grows.

Most emerging economies are nowhere near having an established middle class. For example, only 34% of Chinese households meet the grade. In India that number is even lower at 25%.

Yet with over half of Brazilian households currently belonging to this distinct group, the relative size of Brazil's middle class is now comparable to that of developed nations like Germany and Australia.

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Growing income levels aren't the only reason we're bullish on Brazil either. In the next few years, two very big events are happening that will likely put South America's largest country on the map: The 2014 World Cup and the 2016 Olympic Games in Rio.

These are two of the most watched sporting venues on the planet. With Brazil in the global spotlight, both of these attractions will give the emerging giant a chance to showcase its economic progress. If nothing else, Brazilian companies should benefit from the increased attention these events draw.

Yet despite these positive catalysts, Brazilian stocks are trading at some of their lowest valuations of the last 10 years. The table below shows the price-to-book ratio for each country's major stock market index.

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As you can see, stocks in Brazil are currently trading at a price-to-book value of one -- meaning right now you can buy Brazilian companies for exactly the cost of their assets.

For a country with the seventh largest economy in the world, that's ridiculously cheap. In 2003, the last time Brazilian stocks were this cheap, the country's stock market soared over 100% in 12 months.

The best part is you don't need to leave the U.S. to take advantage of this growing trend either. Thanks to new investment vehicles like exchange traded funds (ETFs), investing in foreign countries is easier than ever. You can buy ETFs just as easy you would shares of Apple (Nasdaq: AAPL) or GM (NYSE: GM).

By far the most popular ETF in this space is the iShares MSCI Brazil (NYSE: EWZ), an exchange-traded fund that invests over 95% of its assets in Brazilian large caps like oil giant Petrobras (NYSE: PBR) and Vale (NYSE: VALE), one of the largest natural resource companies in the world.

Since the beginning of the year, the EWZ is down 23%. After the pullback, EWZ is now trading at a discount to its net asset value, which means you can currently buy this fund for less than the price of its underlying holdings.

Of course, that's not to say it won't fall further. Even though Brazil's emerging middle class is pushing its economy towards self-sustainability, the country is still highly contingent on commodity exports for economic growth. If commodity prices continue to lag, Brazilian stocks could remain depressed in the short run.

But over time, all of Brazil's current problems will likely prove nothing more than temporary hurdles. Ten years from now, we won't be talking about global economic powers without mentioning Brazil. When that day comes, you're going to wish you had invested when it was still cheap.

Note: Andy Obermueller talks more about Brazil in a company-wide conference call hosted by all five of StreetAuthority's expert analysts. On the call, Andy explains Brazil's growth prospects and gives listeners his favorite "game-changing pick" for this developing opportunity -- a deeply discounted ETF whose assets can be bought for pennies on the dollar. The call went live Thursday, but we recorded a copy for those who couldn't make it. To hear more about Andy's take on Brazil, or to see what the rest of our analysts are watching for the coming year, you can listen to the replay here.

Regards,

Austin Hatley
StreetAuthority Insider

Send comments to us at Insider@StreetAuthority.com.

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Image Blocked Image Blocked The StreetAuthority Insider is a subscriber-only publication, exclusively for our paid customers. It's a complimentary benefit that I trust will add value to the business you've given us. As a paid subscriber in good standing to one or more StreetAuthority newsletters, you'll be getting more exclusive access to more investing gurus than ever before
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Le gros roseau
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Nombre de messages : 9664
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Date d'inscription : 21/08/2010

Why are we investing in the most hated country on earth Empty
MessageSujet: Re: Why are we investing in the most hated country on earth   Why are we investing in the most hated country on earth EmptySam 14 Déc 2013 - 7:13

People, pay attention to this. Your retirement is not far away as you think. It seems it was yesterday I was 50 years old.It has been 12 years now since I retired. You will need money to live comfortably in your retirement which could last 20 more years. You need to invest your money wisely by paying attention to opportunities that are available to you in the stock market  in the country where you live ,but also of the world.

As the article suggests Brazil'economy will grow more rapidly than that of many countries. Again I am not a financial advisers, but I wish somebody could  make me more knowledgeable and interested in the stock market when I was younger before I went to college. Wait for the month of March before you start investing in Brazilian stocks and ETF.
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Joel
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Why are we investing in the most hated country on earth Empty
MessageSujet: Re: Why are we investing in the most hated country on earth   Why are we investing in the most hated country on earth EmptySam 14 Déc 2013 - 8:12

These TEA PARTY TYPES are really afraid of BRAZIL.This is a country unlike the countries with majority EUROPEAN populations.
Some of them are even losing the power GAME to BRAZIL.
BRAZIL is the only country where AFRICAN HISTORY will be taught in the schools.They haven't done it in AFRICA proper ;forget about our country of origin,they know more about NAPOLEON than they know about ABOU MOUSSA or the  great QUEEN OF N'GOLA (ANGOLA) ,QUEEN N'ZINGA.
BRAZIL is determined to teach their children all that ;because it's with self esteem that you become a true world power.
I made all these digressions ,because the author of the article called DILMA ROUSSEF a MARXIST.
And if that country, with a majority BLACK POPULATION get it right?
Dare,I say it ;better imitate BRAZIL a country that we have much more in common than that other country across the ATLANTIC.
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Le gros roseau
Super Star
Super Star


Masculin
Nombre de messages : 9664
Localisation : Usa
Loisirs : sport ,internet,stock market
Date d'inscription : 21/08/2010

Why are we investing in the most hated country on earth Empty
MessageSujet: Re: Why are we investing in the most hated country on earth   Why are we investing in the most hated country on earth EmptySam 14 Déc 2013 - 10:26

So what if the President of Brazil is a Marxist. So are Putin and the President of China. Brazil could be the Saudi Arabia of South America where the income per capita of the African Brazilians surpasses the one enjoy by African Americans in the United States.

I read an article which reports the immigration of many young Portuguese engineers to Brazil .Given the number of Japanese immigrant already established in Brazil this rich country has the cadres necessary to surpass even Germany as a world economic power. Haitians better start learning Portuguese instead of talking about the French Academy,my a...
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Joel
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Nombre de messages : 17142
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Date d'inscription : 24/08/2006

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MessageSujet: Re: Why are we investing in the most hated country on earth   Why are we investing in the most hated country on earth EmptySam 14 Déc 2013 - 13:45

This is the kind of work that the BRAZILIANS are doing ,that will make them into a super power.
For a people to achieve greatness ,they must be comfortable in their CULTURE;that's  one of the  ways that the EUROPEANS used ,to dominate other cultures.
You'll see the word ""QUILOMBO"" ,it's an ANGOLAN WORD which means ""fortified village"":

http://africaupclose.wilsoncenter.org/african-culture-is-taught-in-quilombola-community-schools-in-northeast-brazil

Teaching the AFRICAN HISTORY in BRAZIL:

http://brazilafrica.com/en/opiniao/teaching-the-african-history
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Le gros roseau
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Super Star


Masculin
Nombre de messages : 9664
Localisation : Usa
Loisirs : sport ,internet,stock market
Date d'inscription : 21/08/2010

Why are we investing in the most hated country on earth Empty
MessageSujet: Re: Why are we investing in the most hated country on earth   Why are we investing in the most hated country on earth EmptySam 14 Déc 2013 - 18:49

No wonder why an old friend told me if he had money He would spend the rest of his life in Brazil. In haiti they dont'even want to teach us in our own language let alone teach us African history.

The request of a Haitian to have a chair in the French Academy is the consequence  of this acculturation that started since grammar school. Thank you for this video. Brazil will be not too long from now the first country where African Americans have the highest income per capita..
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Le gros roseau
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Nombre de messages : 9664
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Date d'inscription : 21/08/2010

Why are we investing in the most hated country on earth Empty
MessageSujet: Re: Why are we investing in the most hated country on earth   Why are we investing in the most hated country on earth EmptySam 14 Déc 2013 - 18:57

I am serious young Haitians better start learning Portuguese.
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Le gros roseau
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Nombre de messages : 9664
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Date d'inscription : 21/08/2010

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MessageSujet: Re: Why are we investing in the most hated country on earth   Why are we investing in the most hated country on earth EmptySam 14 Déc 2013 - 19:03

I wish we could organize a tour to go to the world cup: ticket ,hotel, air fare everything included. we could depart from different countries and meet in a city where the Brazilian team will be playing. What do you think? I would go
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