It was another strong week for your Global Stock Investor portfolio. Coca-Cola Hellenic (CCH) soared 11.31% and your two agricultural plays, the PowerShares DB Agriculture (DBA) and Potash (POT) jumped 6.92% and 5.92%, respectively. Millicom (MICC) also jumped 7.19%, Veolia (VE) 5.16% and ArcelorMittal (MT) 5.65% in a week that was marked by sharp gains across global markets.
As of yesterday’s close, every single one of your Global Stock Investor picks is showing a profit — and that’s no mean feat under current market conditions. That’s why it is so important that your Global Stock Investor portfolio features a mix of themes that are in their own bull markets, as well as companies that are underpinned by the strongest global megatrends. And with wholesale inflation and producer prices surging in January on rising energy and food costs, stocks underpinned by these two particular trends should remain intact for a while.
Now here’s a caveat. Strong performance for a couple of weeks does not mean equity markets have bottomed. Remember, relief rallies in bear markets are as sharp as they are treacherous. And none of your picks, except for the agriculture plays, have broken through to record highs. But with strong doses of monetary and fiscal stimulus in the pipeline, there is a good chance that the second half of 2008 will be much stronger than the first. As I noted last week, company CEOs who are closest to their businesses are buying back shares in their own companies at a rate unseen since January of 1995. And you are well exposed to the biggest bull market on the planet — agricultural commodities — with Potash (POT) up 47.42% since October, and PowerShares DB Agriculture (DBA) up 11.99% in two short weeks.
PORTFOLIO UPDATE
Barrick Gold (ABX) now is up more than 20% since you first bought it back in November. Gold will always do well in times of uncertainty and the world’s largest gold miner remains a BUY.
Coca-Cola Hellenic Bottling (CCH) soared 11.31% last week, on the back of steadying markets. This is one for the long term and remains a BUY.
PowerShares DB Agriculture (DBA) shot up more than 3% on Tuesday on the back of a record 25% increase in the price of wheat on Monday when Kazakhstan announced a moratorium on wheat exports. This ETF is up 11.99% just since our initial recommendation two weeks ago. There will be a correction at some point in this red-hot ETF, but the long-term trend is still intact. DBA remains a BUY.
iShares MSCI Brazil Index ETF (EWZ) is back up within two percent of its record highs — something very few markets in the world can boast nowadays. Among the BRIC countries, Brazil has been the #1 performer of 2008. EWZ is a BUY.
CurrencyShares Japanese Yen Trust (FXY) is slow but steady, gaining slightly in the week. It remains a BUY.
ICICI Bank (IBN) was the only one of our picks that ended lower this week. The long-term investment case for India’s Citibank remains intact, so now is a good time to BUY ICICI Bank on weakness.
Millicom International (MICC) rallied 7.19% this week and caught the attention of money madman and pundit Jim Cramer, who is bullish about this stock’s prospects. You’ve had it in your portfolio since Day One of Global Stock Investor — and more than 40% ago. The stock is a BUY.
ArcelorMittal (MT) rallied 5.65% this week as Deutsche Bank raised its rating on the Luxembourg-based company to "Buy.” It also raised the price target to $90 per share from $72. ArcelorMittal owns more of its own supply chain than nonintegrated steel companies do. That means the company will feel a smaller pinch from higher costs for key materials like iron ore and coal and higher supply costs in important markets. The stock remains a BUY.
Potash (POT) had another record week and it briefly broke through the $166 mark for the first time. It ended the week up a solid 5.92%. The agricultural megatrend was the theme of the week and the stock remains a BUY.
Veolia Environnement (VE) climbed more than 5% this week. Veolia Water Solutions & Technologies, a unit of Veolia Environment, entered into a joint venture on Thursday with India’s Doshion Ltd for water management services in India and South East Asia. This company is literally everywhere on the planet and remains a BUY.
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