Global markets have gotten off to a weak start this year — the weakest, in fact, in recent memory. The markets’ somber mood notwithstanding, there were a few bright spots in the Global Stock Investor portfolio this week — confirming that betting on the right trends can, and does, matter.
ICICI Bank (IBN), ”India’s Citibank,” soared almost 15% at one point to end the week up around 10% as the Indian market hit record highs. Barrick Gold (ABX) ended the week 7% higher as gold futures soared. Last month’s “one decision stock,” Coca-Cola Hellenic (CCH), also hit record highs this week and is up more than 12% since December.
With other positions selling off, what should you do? If you have extra cash, you should add to your positions — particularly to Potash (POT), Tesco (TSCDY), Anglo American (AAUK) and Millicom (MICC) — though realize that Millicom especially is a very volatile ride. When market sentiment turns, you want to be set for big gains in the rebound.
PORTFOLIO UPDATE
Anglo American (AAUK) will move sharply when speculative bids surrounding the stock return to the market. In the meantime, the current oversold position of your play on the commodity supercycle makes it a great time to BUY.
ABB Ltd. (ABB) announced that it has won a contract worth $90 million to upgrade control systems and instrumentation at the 20-year-old Matla power station in Mpumalanga, South Africa. ABB will refurbish all control systems at the 3,600 megawatt coal-fired power station. BUY ABB on its current bout of weakness.
Barrick Gold (ABX) gained this week as gold futures closed at a new all-time high on Tuesday, soaring as high as $883.80 in intraday trading. Citigroup expects strong safe-haven demand for gold in the event of U.S. recession, and a test of $1,000 an ounce pricing at some point. Citigroup’s top gold pick for 2008? Barrick Gold. With the stock up almost 18% since our initial recommendation, Barrick Gold remains a BUY.
America Movil (AMX) is set to undertake significant network investment in Jamaica, doubling its number of cell sites by April 2008, in order to ensure newly acquired MiPhone can better compete against local rivals. America Movil remains a BUY.
Coca-Cola Hellenic Bottling (CCH) hit another record high on Tuesday, before falling back. The stock is up 12.74% since we recommended it a month ago and it remains a BUY.
iShares MSCI Brazil Index ETF (EWZ) sold off this week on overall market weakness. Once sentiment turns, Brazil will soar. It remains (a volatile) BUY.
CurrencyShares Japanese Yen Trust (FXY) was flat this weak. This defensive position remains a BUY.
ICICI Bank (IBN) soared 9.81% Monday as India’s SENSEX index hit a record-high. Even after correcting yesterday, ICICI is now up 38.54% since we repurchased it in September. The stock is a BUY.
Millicom International (MICC) has sold off sharply in the past few weeks. With the global cell phone megatrend intact, this pick remains a BUY.
ArcelorMittal (MT) has announced that it has entered a definitive agreement to acquire Unicon, the leading manufacturer of welded steel pipes in Venezuela. The purchase forms part of ArcelorMittal’s strategy to strengthen its welded steel pipes business in South America. The stock is a BUY.
Potash (POT) dropped from record highs this week, offering a perfect time to add to your positions. Your bet on the soft commodities boom remains a BUY.
Tesco (TSCDY) has shown uncharacteristic weakness of late, on the back of fear of a slowdown in the U.K. economy. These fears are overblown and this is a short-term hiccup. Warren Buffett-favorite Tesco remains a BUY.
