Correction, at the 7:54 mark I said "oversold", meant "overbought."
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Thanks for this great video! I am 100% agree that timing is everything. I continue to like the Euro and Brazil markets more and more each day as I read about them. I don't think anything will be meaningful until the election is determined in Brazil by the end of October.
ReplyDeleteTake Care. Have a great weekend and a great vacation!
My pleasure Sam! And thanks, looking forward to a few disconnected days. Regarding Brazil, I'm very bullish, actually, regardless of the election outcome. Instinctively, investors may fear Lula, but, believe it or not, the Brazilian markets actually performed quite well under his prior regime. I've learned over time that the incentives and constraints that politicians operate under are far more important than their respective preferences. What Brazil has going for it currently is its resource-driven economy and its present macro setup. With regard to equities we're looking at a 5 p/e multiple and a 9% yield, amid a policy interest rate of 13.25% (they've been aggressively attacking inflation), against a latest inflation read of 11.7% (i.e., unlike the developed world they're ahead of inflation). They can ease policy a ton (a potentially huge boost for their very cheap stocks) as inflation comes off the boil... Of course inflation will persist, but not at a 12% rate...
DeleteOf course, in the meantime, and this may be what you're referring to, it appears as if Bolsinaro, fearing defeat, will claim voter fraud and challenge the election (potentially aggressively)... Yes, that could prove volatile for markets if/while it lasts...