The Global Bull Takes A Breather 3

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

Many of your positions in your Global Bull Market Alert portfolio hit record highs early last week before pulling back. Nine out of your 11 positions are up by double-digit percentages — with the iShares MSCI BRIC Index ETF (BKF) (up 68.22%) and iShares MSCI Chile Investable Market Index (ECH) (up 40.63%) leading the way. 

You also have some big gains in your option positions, including Baidu, Inc. (BIDU) (up 123%) and the iShares MSCI Hong Kong Index (EWH) (up 58%). But with Asian markets rising in overnight trading as South Korea announced its fastest-growth rate in seven years, I recommend that you hold on to your remaining positions for now for even bigger gains. That said, with these options set to expire in December, keep an eye out for special reports during the week, as we may recommend that you sell these positions, after a particularly strong series of gains.

To maximize your stock gains, you may wish to add to your riskier positions — Mechel OAO (MTL), ICICI Bank Ltd. (IBN) and Gafisa S.A. (GFA). As individual stocks, these are among the most volatile of your positions in the Global Bull Market Alert portfolio. But they also promise the biggest potential gains over the coming weeks.

My overall outlook remains unchanged. Short-term hiccups notwithstanding, I believe that global markets will continue to rally between now and the end of the year. Hedge fund guru George Soros shared this view on the front page of London’s Financial Times this Friday. This is the time of year to step on the gas. But as always, make sure you stick to your stops.

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Portfolio Alert

The iShares MSCI BRIC Index ETF (BKF) ended the week slightly higher, even after pulling back from new highs that it hit early in the week. Up 68.22% since my initial recommendation, BKF still remains a BUY.

Baidu, Inc. (BIDU) bucked negative sentiment in most emerging markets, and soared 9.98% last week. It is now up over 24% since my initial recommendation just two months ago. With Baidu’s earnings estimates revised upwards by an average of 10.7% over the past 90 days, BIDU remains a BUY.

The iShares MSCI Chile Investable Market Index (ECH) rose 2.4%, closing at a high for the year of $50.29. Up 40.63% so far, Chile remains a BUY.

The iShares MSCI Israel Cap Invest Mkt Index (EIS) ended the week 1% higher, after hitting a high for the year of $52.03. EIS remains a BUY.

The iShares MSCI Hong Kong Index (EWH) rose 3% last week, after hitting a high for the year of $16.38 on Thursday. Hong Kong remains a BUY.

SPDR S&P Emerging Markets Small Cap ETF (EWX) fell slightly this week. This emerging markets small-cap bet remains a BUY.

First Trust ISE-Revere Natural Gas (FCG) flirted with a new high early in the week before pulling back. With the energy sector currently in favor, FCG remains a BUY.

Gafisa S.A. (GFA) pulled back slightly this week as it consolidated its gains. With analysts polled by Thomson Reuters expecting 2009 earnings to climb 114% to $1.99 per American depositary receipt, or ADR, and 2010 earnings to rise 91% to $3.80, Gafisa remains a BUY.

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ICICI Bank Ltd. (IBN) hit a high for the year of $41.24 last Monday, before pulling back. India’s second-largest bank remains a BUY.

Mechel OAO (MTL) ended the week flat. With Mechel successfully placing $5 billion non-convertible, interest-bearing documentary bonds this past week, this volatile Russian bet remains a BUY.

The iShares MSCI Turkey Invest Mkt Index (TUR) ended the week flat, after hitting a high for the year of $54.74 on Thursday. This play on the Turkish stock market remains a BUY.

P.S. If you want to keep up with my latest insights on developments in fast-paced global markets, you can now follow me on Twitter on @NickVardy.

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The skepticism about the market rally remains relentless, even as almost all of your positions in your Global Stock Investor portfolio -- including the iShares MSCI Taiwan Index Fund (EWT), Market Vectors Russia ETF (RSX), SPDR S&P Emerging Markets Small Cap (EWX), ICICI Bank Ltd. (IBN), Freeport-McMoRan Copper & Gold Inc. (FCX), iShares MSCI South Korea Index Fund (EWY), SPDR Dow Jones Intl Real Estate (RWX), Claymore/BNY Mellon

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