Global markets continued to get hit hard by the fallout from the events in Libya. The revolts spreading across the Mideast are indeed morphing into the Arab world’s version of what 1989 was for Eastern Europe.
With the rising uncertainty in global markets, most of your positions in your Global Stock Investor portfolio pulled back this week, as both commodities and emerging markets were hit hard by the fallout from the protests in Libya.
Your exit last week from Taiwan, South Korea and Malaysia now seems well-timed. Even though the long-term prospects of these markets remain intact, I want to re-focus your Global Stock Investor portfolio on areas which make the most money. And that is what we have been doing by exiting our emerging markets holdings in a disciplined fashion.
Overall, this is a time to be cautious, and to pull in your horns a bit. At the same time, it’s important not to lose focus on the good news in the global economy. I remain bullish in technology, agriculture, Japanese small-cap stocks and oil as it climbs back over the $100 a barrel level. These investment themes are represented by your positions in Universal Display Corp. (PANL), Agrium Inc. (AGU), WisdomTree Japan SmallCap Dividend (DFJ) and the Market Vectors Russia ETF (RSX), respectively. Although none of these positions are extremely oversold just quite yet, you can feel comfortable in adding to these positions even if the market continues its pullback in the coming days.
Your biggest downside exposure is in your remaining (non-oil related) global commodity bets. So keep an eye on your positions in both Freeport-McMoRan Copper & Gold, Inc. (FCX) and Vale S.A. (VALE), as they begin to flirt with their stop prices.
From a risk-management standpoint, if a position has fallen below its 50-day moving average, I am moving it to (or keeping it at) a HOLD. If a position rises back through its 50-day moving average, then I have moved it back to a BUY. Based on this discipline, I have moved WisdomTree Dreyfus Chinese Yuan Fund (CYB) and the Global X FTSE Nordic 30 ETF (GXF) back to a HOLD.
Here’s a special note to the subscribers who I saw at my “private meeting” during the Orlando MoneyShow two weeks ago. If you completed an evaluation form, you should have already received a copy of my presentation “7 Red Hot Bull Markets to Own Now.” If you did not receive it — or you were unable to attend the meeting — you can download a presentation by clicking here. In it, you will find at least four new investment ideas that you have not seen in Global Stock Investor. It will also give a peek at the kinds of investments I recommend in my fast-paced Global Bull Market Alert trading service.
Agrium Inc. (AGU) dropped 5.12% this past week. The company recorded net earnings of $158 million, or $1.00 per share, in the fourth quarter of 2010, missing consensus estimates by 14 cents per share. In fiscal year 2010, Agrium posted net earnings of $714 million, or $4.52 per share. With the stock still trading above its 50-day moving average, AGU remains a BUY.
The WisdomTree Dreyfus Chinese Yuan Fund (CYB) dropped 0.16% this past week. Now trading back below its 50-day moving average, CYB is a HOLD.
WisdomTree Japan SmallCap Dividend (DFJ) was trading up until yesterday’s sell-off of 2.30%. I’m seeing more and more fund managers becoming bullish on the prospects of Japanese stocks, even as Moody’s downgraded the outlook on Japanese government debt to negative. DFJ remains a BUY.
Freeport-McMoRan Copper & Gold, Inc. (FCX) dropped 7.81% this past week, is now in its biggest correction since last May, and is nearing its stop price of $47.50. Trading below its 50-day moving average, this volatile stock is a HOLD.
Global X FTSE Nordic 30 ETF (GXF) fell .98% this past week. GXF component A.P. MOLLER-MAERSK A/S, the world’s biggest container-shipping company, said it returned to profitability in 2010 due to streamlined costs and a rebound in the container-shipping industry. Now trading below its 50-day moving average, GXF is a HOLD.
JinkoSolar Holding Co., Ltd. (JKS) dropped 2.04% this past week. This is a volatile stock that will always get hit when markets sell off sharply. Still above its 50-day moving average, JKS remains a volatile BUY.
Las Vegas Sands Corp. (LVS) dropped back 4.84% this past week. The company has announced it has plans to build a gaming, hotels and leisure project in Spain costing $13.6 billion — $20.4 billion. Sheldon Adelson, the CEO of Las Vegas Sands Corp., said, “I want to do a mini Las Vegas… I want to build 20,000-plus rooms and millions of square feet of shopping and MICE space, and we have a study that says we can create as many as 180,000 jobs.” Trading back under its 50-day moving average, Asia’s Las Vegas is now a HOLD.
Market Vectors Russia ETF (RSX) traded flat this week, as its oil rich companies fended off the sell-off in emerging markets well. Falling below its 50-day moving average for the first time since September, RSX remains a BUY.
Universal Display Corp. (PANL) hit a record high of $44.79 on Thursday before ending the week flat. If you can stomach the volatility, this is a terrific time to add to your position in this stock. PANL remains a solid BUY.
Vale S.A. (VALE) dropped 4.84% this week. Some investors are beginning to question how much better it can get in commodities, especially if you start to see these governments trying to rein in inflation. Trading below its 50-day moving average, Vale is a HOLD.