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 had a lot of turnover this week as global markets whipsawed stocks back and forth. You were stopped out of Millicom International Cellular (MICC) last week for a gain of 22.55%. With the stock dropping substantially on an earnings disappointment announced yesterday, you should be pleased to have locked in those gains. You also hit your stop in ArcelorMittal (MT) for a gain of 13.75%. Finally, you were stopped out of South Africa’s Sasol (SSL) for a loss. 

But right now it’s a tough time to be holding stocks of almost any kind in the global marketplace. Volatility is high. And even previously strong sectors such as energy, steel and commodities — which have been responsible for the strong out-performance in the Global Stock Investor portfolio this year — have been hit hard. But it is always darkest before the dawn. Just as we did last September, we will be looking to get back into some of these positions and others we have been stopped out of during the past few weeks. 

You can take some comfort in a Goldman Sachs note published last week which was quite emphatic in its recommendation to its clients to buy into the recent dip in the energy sector. Goldman pointed out that the energy sector has rallied and corrected 10 times since 2004, with surges averaging 24% and pullbacks averaging 13%. With the current pullback in the energy sector hitting 14%, energy stocks are just about due for rally number 11. Energy also remains Goldman Sachs’ top overweight sector in the S&P 500 and its commodities research team has a $149/barrel year-end target for oil. All this would be bullish for your holdings in Transocean (RIG) and Petrobras (PBR), as well as the Elements Rogers International Commodity ETN (RJI).

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Barrick Gold (ABX) announced that oil and natural gas producer Cadence Energy Inc. has accepted its sweetened buyout offer of 410 million Canadian dollars ($407.8 million). The stock is a safe haven and a bet on the rising gold price. It is a BUY.

NII Holdings (NIHD) rose slightly this week on anticipation of its earnings announcement today. George Soros is betting this turnaround play will pan out. The stock is a BUY.

Transocean (RIG) shares remain near a 52-week high despite lower crude oil prices. The firm’s price-to-earnings ratio stands at just 9.59x current earnings and 8.97x future earnings, despite strong quarter-over-quarter and year-over-year growth rates. The company also has very little long-term debt. It also has strong cash flow and is owned primarily by institutions. As a result, many analysts insist that Transocean remains undervalued. The stock is undervalued and a BUY.

Petrobras (PBR), the Brazilian oil giant, found traces of oil and gas in an offshore well in the Espirito Santo Basin. Petrobras also found more oil in a second onshore well in the ES- T-364 block in Espirito Santo state. Petrobras is working hard everyday to exploit its huge offshore oil reserves. Use the short-term weakness in the stock to BUY.

Elements Rogers International Commodity ETN (RJI) fell this week as energy prices corrected. This diversified ETN has the least exposure to the energy complex, and any weakness is a good time to add to your position. It is a BUY.

P.S. I invite you to join me for the 30th anniversary celebration at The Money Show San Francisco, August 7-10, 2008. Hear from 50+ world-class experts in more than 150 FREE workshops at the San Francisco Marriott, where you will be given every opportunity to refresh your perspective and prepare yourself for the uncertainty that may lie ahead. Meet face-to-face with 150+ investment companies and evaluate the products and software designed to help you improve your market performance. Call 800/970-4355 and mention priority code #009613 or visit The Money Show San Francisco’s Web site to register FREE today!

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