Global Stock Investor Hotline 49

Nicholas Vardy

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

Yesterday was the toughest day for global stocks since the sharp corrections of early February, as Standard & Poor’s downgraded Greece’s debt to junk status and cut Portugal’s credit rating by two notches. That development, combined with Goldman Sachs’ shaky testimony in front of Congress, hit the market hard. All of the major U.S. indices were down more than 2%. And you can expect little respite today, as all the major Asian markets are down overnight as well.

Thus, it’s no surprise that your positions in Global Stock Investor portfolio were hit as well. You were stopped out of Freeport-McMoRan Copper & Gold Inc. (FCX) on intraday trading for a gain of 3.60%. FCX is an exceptionally volatile stock and we have been stopped out of it before. So, I am keeping FCX on the watch list for re-entry at an opportune moment. Steelmaker ArcelorMittal (MT) and iShares MSCI Turkey Invest Mkt Index (TUR) also are trading near their stop prices, so I am moving both to a HOLD.

But there was some good news as well. Your Global Stock Investor portfolio’s bet against the euro through the UltraShort Euro ProShares (EUO) is designed to benefit from Greece’s (and Europe’s) woes. Sure enough, EUO rose 4% on the week, hitting a record high of $21.77.

Several of your other positions are holding up exceptionally well. The global sell-off notwithstanding, both iShares MSCI South Korea Index Fund (EWY) and Market Vectors Indonesia ETF (IDX) hit highs for the year during the past week. Market Vectors Russia ETF (RSX) also has been exceptionally strong.

Exclusive  Revisiting a Fracking Play with Big Momentum

After such a steady upward move since the February lows, markets were, in many ways, looking for an excuse for a correction. And when risk aversion soars, there is no escape, and all of your stock positions in Global Stock Investor are going to tumble. The baby goes out with the bathwater. All you can do is control your downside risk by sticking to your stops.

Overall, I remain optimistic that the global economy is on the way to recovery. Both countries and companies are growing at a faster-than-expected rate. And that bodes well for the months ahead.

Portfolio Update

Market Vectors Brazil Small-Cap ETF (BRF) continues in its funk, as Brazil lags its BRIC rivals. Nevertheless, BRF remains a BUY.

The WisdomTree Dreyfus Chinese Yuan Fund (CYB) was flat this week, and the focus shifted away from the prospect of yuan revaluation. That said, revaluation is not a question of “if” but “when.” CYB remains a BUY.

iShares MSCI Israel Cap Invest Mkt Index (EIS) dropped in sympathy with global markets. The Bank of Israel left interest rates for May where they were for April. EIS remains a BUY.

UltraShort Euro ProShares (EUO) rose 4% this past week, hitting a record high of $21.77 as Greece’s debt was downgraded to junk status. With the threat of contagion spreading to Portugal and other European “PIIGS,” your bet against the euro remains a BUY.

iShares MSCI South Korea Index Fund (EWY) actually hit a high of $52.90 on Monday — its highest level since August 2008 — before pulling back in yesterday’s sell-off. But the news remains good. South Korea’s won is trading near a 19-month high. GDP grew 1.8% in Q1, beating expectations of 1.5%. EWY remains a BUY.

Exclusive  Eyeing Asia’s Largest Emerging Market Fund

Market Vectors Indonesia ETF (IDX) hit yet another record high of $74.84 on April 23, before pulling back slightly. Although this position will pull back in sympathy with other Asian markets, it remains among the strongest global markets on the planet. IDX remains a BUY.

ArcelorMittal (MT) continued to pull back this week as global markets corrected. With the world’s biggest steel company nears its stop price, this position is now a HOLD.

Market Vectors Russia ETF (RSX) actually held up remarkably well this past week, before falling back in yesterday’s sell-off. This volatile bet remains a BUY.

iShares MSCI Turkey Invest Mkt Index (TUR) dropped below the $60 level on yesterday’s sell-off. One of the top performers of 2010, Turkey remains a solid bet. But as it is near its stop price, I am moving it to a HOLD.

VALE S.A. (VALE) dropped back sharply on yesterday’s sell-off. This global commodity play remains a BUY.

P.S. Please join me Wednesday, May 12, 2010 at the MoneyShow in Las Vegas for a subscribers-only meeting. This exclusive event will take place from 10:00 a.m. to 11:00 a.m. in the Calabria room at Caesar’s Palace. To RSVP for this event, please click on this link, and supply the requested information. This private meeting will be open only to paid subscribers of Global Stock Investor and Global Bull Market Alert. See you there.

P.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 or on my new blog, NickVardy.com.

Exclusive  Waiting for the Market to Consolidate...

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


img
previous article

Even the Securities and Exchange Commission’s investigation of Goldman Sachs couldn't divert the U.S. bull from its relentless trek upward last week. The S&P 500 rallied 0.7%, the Dow 0.6% and Nasdaq 0.4%. All three major indices hit new highs for the year. The Dow has now been up eight weeks in a row -- its strongest performance since the market bottomed last March. With 172 of the S&P 500 companies reporting, 83% have beaten earnings expectations. S&P 500 earnings are on trac

PREMIUM SERVICES FOR INVESTORS

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

LEARN MORE HERE

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

LEARN MORE HERE

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

LEARN MORE HERE

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

LEARN MORE HERE

Mike Turner

Mike Turner’s financial, mathematical, computer science and engineering background serves as the foundation for his disciplined, rules-based approach to trading. Mike’s three services include:

Product Details

LEARN MORE HERE

Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street. Since 2010, Hilary's financial publications have provided stock analysis and investment advice to her subscribers:

Product Details

LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com 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.

LEARN MORE HERE