GLOBAL STOCK INVESTOR HOTLINE UPDATE 64

Nicholas Vardy

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

Your Global Stock Investor portfolio corrected this past week, as the major U.S. averages had their worst week since late February. But with news from the U.S. economy improving, the government likely revising upward GDP growth from 0.6% to around 0.9% on Thursday, market sentiment will likely strengthen, driving both U.S. and global stocks ahead as we move into the summer.

Last week’s pullback offers particularly good opportunities to add to your positions in ArcelorMittal (MT), iShares MSCI Brazil Index ETF (EWZ), Transocean (RIG) and your newest pick, South Africa’s Sasol (SSL). The CurrencyShares Japanese Yen Trust (FXY) and the Elements Rogers International Commodity ETN (RJI) remain your steadiest and most defensive picks. All of your other positions, except for Barrick Gold (ABX), remain BUYs as well.

Overall, eight out of 10 positions in your Global Stock Investor portfolio are showing gains, and four out of your 10 positions are up at least 36%, including Potash (POT), which is up 73.82%, as of yesterday’s close.

PORTFOLIO UPDATE

Barrick Gold (ABX) fell this week as the price of gold for June delivery fell $18 to $907.80 an ounce on the New York Mercantile Exchange. With gold’s current direction unclear, the stock is a HOLD.

Coca-Cola Hellenic Bottling (CCH) is one of the world’s largest bottlers of products of The Coca-Cola Company and has operations in 28 countries serving a population of 550 million people. The stock’s current oversold position is a terrific opportunity to BUY.

iShares MSCI Brazil Index ETF (EWZ) dropped back almost 5% on the general market pullback. Yet Brazil remains as popular as ever. On his European trip, Warren Buffett confirmed that he was invested in the Brazilian currency (the Real) and was interested in acquiring a Brazilian company. With the largest components of the ETF being oil giant Petrobras (PBR) and natural resource giant Vale (RIO), the recent drop is a terrific opportunity to BUY.

CurrencyShares Japanese Yen Trust (FXY) rallied on the general weakness in global markets. This hedge against market downturns remains a defensive BUY.

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Millicom International (MICC) is holding its general shareholders meeting today to confirm the $2.40 per share ex-dividend date (June 2). Merger talks between South Africa’s MTN and new Indian suitor Reliance are refocusing attention on the value of African cell phone properties. Use any pullback as an opportunity to BUY.

ArcelorMittal (MT) announced that it has committed to invest $25 billion in India. ArcelorMittal is investing about $20 billion in two steel plants in Orissa and Jharkhand, each with a capacity of 12 million tons per year. Last week’s pullback in the stock is a terrific opportunity to BUY.

Potash (POT) is trading at only 12 times forward earnings estimates. And given the price of fertilizer globally, these estimates are likely to only go up. Potash owns 75% of the world’s excess potash capacity and has significantly lower costs than its competitors: $94 cost per ton of potash produced vs. $135 for Mosaic. Potash remains a top BUY.

Transocean (RIG) is one of oil mogul T. Boone Pickens’ biggest holdings. The world’s biggest driller is a BUY on any weakness.

Elements Rogers International Commodity ETN (RJI) pulled back from recent record highs. This diversified commodity play is a safe and steady BUY.

Sasol (SSL) started commercial production at its new 60,000 ton per year oleochemical-base alcohols plant in China. Sasol owns the Chinese plant in a joint venture with Wilmar China Investment (Yihai), and expects the plant to become a key supplier to the fast-growing Chinese alcohol market. The recent weakness in the stock is an opportunity to BUY.

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P.S.
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Selling all or part of your Potash (POT), Mechel (MTL), and NII Holdings Inc. (NIHD) options and locking in 112%, 60% and 59% gains last Monday, respectively, proved unusually prescient as global stock markets endured their worst sell off since February.

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