Potash (POT) hit yet another high this week, as the global shortage in fertilizer begins to hit hard. The stock now is up an eye-popping 78% since October. The rest of your Global Stock Investor portfolio also is doing well. Eight out of nine of your positions are in the black, with six out of the eight showing double-digit percentage profits.
With stories of food riots gracing the cover of both The Wall Street Journal and the Financial Times, attention this week shifted back to the weak dollar and rising commodities prices — themes you are set to profit from through your positions in the PowerShares DB Agriculture (DBA), Elements Rogers International Commodity ETN (RJI), Barrick Gold (ABX) and the CurrencyShares Japanese Yen Trust (FXY).
With global markets steadying, the question is: are we out of the woods yet? Of course, no one knows for sure. But even permabear Stephen Roach of Morgan Stanley noted in yesterday’s Financial Times that the worst of the subprime crisis may be over. If so, the market may have reached bottom right around the time of the Bear Stearns bailout. That bodes well for global stock markets. The worse it felt on the way down, the sharper the upturn. And as John Kenneth Galbraith wisely observed: “The financial memory is very short.”
I’m not bold enough to make a call either way. But the diversity of your Global Stock Investor portfolio is well-positioned to profit from both bullish and bearish scenarios.
I’m also particularly excited about your new Global Stock Investor pick for May, which you should be receiving in your mailbox as soon as next week.
PORTFOLIO UPDATE
Barrick Gold (ABX) continued to recover this week as gold rose to $932 an ounce on the New York Mercantile Exchange, after earlier rising as high as $939.80 an ounce. The pullback in the gold price is an opportunity to BUY.
Coca-Cola Hellenic Bottling (CCH) was steady this week. The company said the silver lining in its rising commodity costs lay in the European Union’s plans to dismantle the current sugar pricing regime, which should save it about $160 per ton of sugar in 2009-10. This global play on the Coke story remains a BUY.
PowerShares DB Agriculture (DBA) resumed its upward trend as pictures of global food riots grace the front pages of newspapers across the world. This is your hedge against rising prices in your local supermarket. DBA remains a BUY.
iShares MSCI Brazil Index ETF (EWZ) consolidated this week, after rising almost 6% the previous week. Latin America is the only region in the world that is in the black this year, and Brazil remains a BUY.
CurrencyShares Japanese Yen Trust (FXY) was steady as she goes this week. The yen will strengthen as the U.S. dollar continues to weaken and it remains a defensive BUY.
Millicom International (MICC) will announce its financial results for the first quarter on April 22. The stock is technically oversold and it’s an opportunity to BUY.
ArcelorMittal (MT) announced that it is expanding its joint venture with Nippon Steel Corporation by building a new continuous galvanizing line in Indiana. Citigroup upgraded the stock to a BUY. We agree.
Potash (POT) closed at a record high of $184.41 as it announced that it will sell potash supplies to Sinofert Holdings, a Chinese fertilizer company, for a price that is $400 per ton higher than that of a year ago. Like the energizer bunny, this one just keeps on going and going. Potash is a top BUY.
Elements Rogers International Commodity ETN (RJI) now is back up above $12.50, having regained virtually all of its losses after the sharp sell off in March. This diversified commodity play will serve you well in the long term and is a BUY.
P.S. Join my Eagle Publishing investment colleague Mark Skousen and me for FREEDOM FEST 2008, "The Trade Show for Liberty," on July 10-12, 2008, Bally’s/Paris Resort. FreedomFest will feature more than 88 speakers, 100 exhibitors, and 1,000 attendees. Guests will include John Mackey, CEO of Whole Foods Market, Congressman Ron Paul, a 2008 Republican candidate for president, Steve Moore, of The Wall Street Journal editorial board, David Boaz, vice president of Cato Institute, Robert Poole, Jr., of Reason Foundation, Jeremy Siegel, "The Wizard of Wharton," and Rick Rule, one of the country’s top money managers. Also hear Frank Holmes, Doug Casey, Larry Abraham, Ron Holland, Frank Trotter, Bert Dohmen, Keith Fitz-Gerald, Peter Zipper, John Mauldin, and many more.
