Overall, your Global Stock Investor recovered in line with the broader markets this week. Potash (POT) continued to soar to record highs, even as the Elements Rogers International Commodity ETN (RJI) hit never-before-seen levels. Potash now is up more than 118% since you first added it to your portfolio in October.
July’s pick, Latin American telecom play NII Holdings (NIHD), got off to a solid start, rising 6.21% in its first week in your Global Stock Investor portfolio. The iShares MSCI Brazil Index ETF (EWZ) recovered somewhat and is resuming its upward trend. Millicom International (MICC) is yet again flirting with highs not seen since December. Sasol (SSL) and Transocean (RIG) are technically oversold within longer-term bull trends, and are due for a strong bounce. All of these picks remain BUYS.
We were stopped out of Coca-Cola Hellenic (CCH) for a loss when the stock dropped sharply after the company lowered growth forecasts for the coming year. The announcement came out of the blue, and the drop in the stock is probably overdone. Nevertheless, such an unexpected turn of events offers a good lesson on why it is crucial to have your stops in place at all times.
This week, I am moving the CurrencyShares Japanese Yen Trust (FXY) to a SELL. The yen has been a safe haven bet against market downturns, but it seems to have lost its hedging characteristics of late. Your money is better put to work elsewhere. Barrick Gold (ABX) still is a HOLD as the gold price remains below $900.
PORTFOLIO UPDATE
Barrick Gold (ABX) ended the week flat as the gold price remained essentially unchanged during the week. The stock is a HOLD.
iShares MSCI Brazil Index ETF (EWZ) recovered somewhat after its recent sell off. Remember, the recent technical correction is a terrific opportunity to BUY the world’s top-performing market.
CurrencyShares Japanese Yen Trust (FXY) now is in a firm downtrend as the dollar has begun to appreciate against the Japanese currency. FXY has served us well in the portfolio as a hedge against market downturns, but this week I recommend that you take profits, and I am moving the Yen from a HOLD to a SELL.
Millicom International (MICC) broke through the $120 level once again on Monday as it flirts with record highs not seen since early December. This has been one of your most profitable bets so far, so use any pullback as an opportunity to BUY.
ArcelorMittal (MT) announced that it has lifted its stake in Turkish steel company Erdemir by 11.3% to 24.99%, paying $869.25 million for the acquired stake. Separately, ArcelorMittal is also buying Bayou Steel, a producer of structural steel products with facilities in LaPlace, La., and Harriman, Tenn., for $475 million. With the stock off recent record highs, it is a BUY.
NII Holdings (NIHD) is up a solid 6.21% in its first week in our portfolio. With our target price on this turnaround play at $80, the stock is a BUY.
Potash (POT) continues to soar and closed at $239.50 yesterday. With analysts putting a target price of up to $300 on the stock, this is a train that will keep on running. As Peter Lynch once wrote, "Shame on all those experts who advise clients to sell automatically after they double their money." I believe in letting trends run as far as they go — but tighten your stop on the stock to $200. Potash remains a BUY.
Transocean (RIG) is showing signs of having bottomed after a technical correction that is typical of the stock’s behavior. With the stock trading on a PEG ratio of only .35, it remains a bargain and a BUY.
Elements Rogers International Commodity ETN (RJI) hit yet another record high this week, and seems to have resumed a solid uptrend. Investing in everything from corn to oil, this diversified commodity play is your safest play on the commodity megatrend. It is a BUY.
Sasol (SSL) has agreed with China’s Shenhua Group to jointly produce motor fuel from coal by 2016. The plant will be the biggest outside of South Africa and is expected to convert 3.5 million tons of coal per year into one million tons of oil products. The stock’s technically oversold position is a good point of entry and it remains a BUY.
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