Global Stock Investor Hotline 15

Nicholas Vardy

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

After reaching record highs last Thursday, June 11, global financial markets have corrected with some of the sharpest sell-offs since late March. Many of your Global Stock Investor positions are now as oversold as they have been since early May. But after a three-month bull run, such a correction is not only expected, but also welcome.

Why do I think this not the start of a sharp and sustained correction? Trading volumes have been relatively light. That indicates that investors aren’t dumping assets en masse. If history is any guide, the recent consolidation probably just marks the start of the traditional quiet period in the summer. With so much cash sitting on the sidelines, it is high likely that institutional investors will take advantage of the recent correction to enter the market at lower levels. That may not happen tomorrow. But it is likely to come before the end of the quarter “window-dressing” period ends in two weeks time.

The bottom line? Hold off on adding to your positions in your Global Stock Investor portfolio this week and keep an eye out for your stops — the iShares MSCI Taiwan Index (EWT), in particular.

The one exception to this advice is your position in the UltraShort Lehman 20+ Treasury ProShares ETF (TBT). Last week’s sharp drop in TBT offers you a second bite at the apple in your bet against Treasuries. The London Financial Times today reported that the U.K. government had to use a syndicate of banks to place government debt. That’s a strategy that is normal for low-grade corporate debt — but not for creditworthy governments. With borrowing requirements hitting $3.25 trillion in 2009, the United States can’t be too far behind. Use positive news of moderate inflation today to add to your position in TBT here.

Portfolio Update

The WisdomTree Dreyfus Chinese Yuan Fund (CYB) stayed flat this week. The People’s Bank of China set the central parity rate for the dollar-yuan pair at 6.8340. The yuan is allowed to strengthen or weaken 0.5% from the parity rate, so it won’t go too far either way. CYB remains a defensive BUY.

The iShares MSCI Taiwan Index (EWT) fell below the $10 level for the first time since late April. Wait for the market to settle before you enter this position at current levels. But with Taiwan probably now the most oversold among the major emerging markets, EWT remains a long-term BUY.

Freeport-McMoRan Copper & Gold Inc. (FCX) broke through the $60 level on Thursday, before correcting sharply during the last three trading days. Sharp corrections are not unusual for commodities stocks highly geared to the price of copper. FCX is a BUY.

Market Vectors Gold Miners ETF (GDX) corrected as the price of gold fell back to the $932 per ounce level. Short-term movements don’t change the long-term argument for this month’s Global Stock Investor pick. GDX remains a BUY.

ICICI Bank Ltd. (IBN) pulled back just below the $30 level this week, as India corrected along with the other major emerging markets. The Indian stock market is now at around 15,000, almost double from the bottom hit in November 2008. IBN remains a BUY.

Chemical & Mining Co. of Chile Inc. (SQM) dropped back this week. But the company has more than one arrow in its quiver. Not only is it a leading fertilizer company, but it also is the world leader in Lithium supply. SQM remains a BUY.

The UltraShort Lehman 20+ Treasury ProShares ETF (TBT) tumbled from a high of $58.77 last week as inflationary expectations over the next 10 years soared to 2.13%. That’s a 10-month high. Inflation is coming. This sell-off is a good time to add to your position. TBT remains a BUY.

P.S. The constantly changing market environment continues to present investors with some of the most challenging times in recent history. Not since the Industrial Revolution has the financial landscape seen such major shifts in how wealth is held today. The MoneyShow is the only forum where you’ll meet, hear from, and find out how to profit from leading experts. Join me at this year’s MoneyShow San Francisco, August 21-23, 2009, at the San Francisco Marriott, where I will address some of the most pressing issues facing us today and introduce you to the newest and most successful tools and strategies for managing your portfolios in these challenging times. I urge you to attend and I look forward to meeting you personally. Register FREE by calling 800/970-4355 (priority code 014319) or by going online at The Money Show San Francisco!

share on:

Like This Article?
Now Get Our FREE Special Report:
Alternative Investing: Investing in Timber

Stock Investor editor Paul Dykewicz reveals why investing in timber may be one of the best long-term portfolio strategies you'll find today.

Get Access to the Report, 100% FREE

share on:


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader

Used by financial advisors and individual investors all over the world, is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor