Categories: Stock Market NewsThe Alpha Investor Letter Hotlines

GLOBAL STOCK INVESTOR HOTLINE UPDATE 68

It was a quiet week for most of your Global Stock Investor portfolio, as markets flirted with their March lows. Investors are anxiously awaiting the Federal Reserve’s latest interest rate announcement this afternoon. Most of Wall Street expects the Fed will stand pat on rates today. Others say that thanks to rising inflationary pressures, the Fed could actually start raising rates. My own view is that it is unlikely that the Fed will make a move upward. The global economy and financial system are still just too unstable.

Two of your holdings in Global Stock Investor ended the week on a high note. Transocean (RIG) signed a huge drilling contract with Brazil’s oil giant Petrobras. ArcelorMittal (MT) moved upward as CEO Lakshmi Mittal optimistically declared that his company has conquered the business cycle.

Overall, seven of your nine current holdings are in positive territory since our initial recommendation, with Potash (POT) up 107.50%, Millicom International (MICC) rising 52.34%, ArcelorMittal (MT) jumping 41.22%, and the iShares MSCI Brazil Index ETF (EWZ) climbing 31.55%.

Barrick Gold (ABX) remains a HOLD as the price of gold stays below $900. All of your other picks remain BUYS.

PORTFOLIO UPDATE

Barrick Gold (ABX) ended the week flat as gold for August delivery fell $16.50 to settle at $887.20 an ounce on the New York Mercantile Exchange after earlier dipping as low as $877.40 an ounce. Until the stock shows some upward momentum, it is a HOLD.

iShares MSCI Brazil Index ETF (EWZ) nudged below $90 last week as it continues its correction. Looked at in the context of a longer-term uptrend, this pick offers a terrific opportunity to BUY the world’s top-performing market this year.

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Millicom International (MICC) pulled back this week on general market weakness. Use any pullback as an opportunity to BUY.

ArcelorMittal (MT) bucked the market trend and went back to trading above $100 per share. Things are going so well for ArcelorMittal that CEO Lakshmi Mittal has been touched by a tad of hubris. At the Steel Success Strategies XXIII conference in New York this week, he told his audience: “I can say with considerable certainty that the volatile years of boom and bust are now relegated to the past… We have succeeded in transforming ourselves into a profitable and sustainable industry.” The stock remains a BUY.

NII Holdings (NIHD) continues to be popular among insiders as they snap up shares in the company. So should you. With a target price of $80, the stock is a BUY.

Potash (POT) got yet another boost as UBS Securities raised its price target on Potash to $285 on expectations for higher realized fertilizer prices and strong second quarter results due out July 24. The fertilizer story is now hitting the front pages, so we are closer to the end of the Potash story than the beginning. Nevertheless, Potash remains a BUY.

Transocean (RIG) rallied on Monday as it announced that it had signed a massive 10-year, $1.68 billion drilling contract with subsidiaries of Petrobras and Mitsui Group, with drilling expected to commence in the third quarter of 2009. The deal is a watershed in the industry. Transocean normally pays out of pocket to construct massive oil rigs but Petrobras is ponying up for the $750 million construction cost. That puts Transocean in the catbird seat. The stock remains a bargain and a BUY.

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Elements Rogers International Commodity ETN (RJI) pulled back off record highs this week, but remains in a solid uptrend. Investing in everything from corn to oil, this diversified commodity play is your safest play in the portfolio and on the commodity megatrend. It is a BUY.

Sasol (SSL) now is as technically oversold as it has been in almost two years. It remains a BUY.

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Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world. He was the Editor of The Global Guru, a free weekly e-newsletter, and also edited the trading services Momentum Trader Alert, which focused on making short-term profits in the hottest markets in the world, and The Alpha Algorithm, which was designed specifically to deliver big, fast triple-digit winners, month after month. He was also the editor of Smart Money Masters, a monthly service focused on longer term investments recommended by the brightest minds in the business. Mr. Vardy has been a regular commentator on CNN International and the Fox Business Network. He has also published articles in The New Republic, The World and I, and The Baker & McKenzie Legal Review. The Global Guru/Nicholas Vardy has been cited in The Wall Street Journal, Newsweek, Fox Business News, CBS MarketWatch, Yahoo! Finance, and MSN Money Central. Mr. Vardy graduated from Stanford with a B.A. — with honors and distinction — in both Economics and History, and he also earned an M.A in Modern European Intellectual History. After winning a Fulbright Scholarship, he earned a J.D. degree at Harvard Law School where he was an editor of the Harvard International Law Journal. When not uncovering investment opportunities for his subscribers and investors, Mr. Vardy is a keep-fit enthusiast and an avid student of classical music.