Let me make two quick points:
First, as you consider whether to invest in Latin America, please don't make the mistake of casting all of our Latin Neighbors in the mold of Hugo Chavez's Venezuela. When you think of Latin America, please don't be dissuaded by sensational media coverage of drug wars and corruption. As you'll see by reading on, in most of South America, nothing could be farther from the truth.
Second, while I'm long term bullish on the US economy, this is not the time to sit on even the best that Wall Street has to offer. If, like most individual investors your 401K is down 40%... 50%...even 60% or more and the equity in your home has taken a similar beating – you need to break free from the incestuous grasp of Wall Street and fatten up on far-greener pastures.
I've got news for every bloodied and bruised investor who's fallen prey to the current, inexcusable financial fiasco. Wall Street is so egotistical, it can't stand the thought that it's not the center of the financial universe. There are those who would rather spew gloom and doom than admit that just to the south of our borders are countries and economies that are experiencing phenomenal economic growth and prosperity.
Do What Wall Street Does
and Keep Getting the Same Results!
I'll let you in on a little secret: Harvard University has the world's biggest endowment fund – $36.9 billion as of June 2008 – has returned more than 15% per year over the past decade. If those market-beating numbers remind you of Bernie Madoff, let me assure they're totally on the up and up.
What's Harvard's secret? Simple: they diversified away from holding US stocks and bonds and limited its portfolio to no more than 15% US investments!
Ditto the endowment funds of Stamford and Yale (up an average of 17.4% for each of the past 10 years).
And look at this: during a recent period when the S&P dropped 15%, Harvard's non-US portfolio gained 8.6%, while Stanford tacked on a 6.2% gain and Yale added 4.5%.
The obvious point being, that...
- If the idea of investing in stable, well-capitalized, well-regulated, corruption-free markets appeals to you...
- If you're interested in making back what you've probably lost in the US stock market over the last 12 months and tripling or even quadrupling your money in the next 18-24 months...
...then I encourage you to read the compelling arguments that follow and to then accept a FREE copy of a more detailed Special Report, Greatest Riches in Latin America.
There are three mega-trends reshaping Latin America.
Certain stocks will benefit the most:
Mega-Trend #1: POPULATION EXPLOSION
Latin America is undergoing a monumental population boom. Within the next decade, Brazil and Mexico's combined population will be larger than that of the United States. With 180 million people, Brazil is now the fifth most populous country in the world.
Throughout Latin America, “mega-metros” are booming. More people are living in central urban cities today than ever before. Currently, Latin America has five mega-metros, with over eight million people each, including Mexico City, São Paulo, Buenos Aires, Rio de Janeiro and Lima. Many people come to the cities in search of employment, education and higher standards of living.
A growing middle class spurs ever-increasing demand for more goods and services, especially from the telecom industry!
With this migration comes the need for more fresh water, renewable electricity, affordable housing and clean air. Whole new industries and profit-making opportunities are emerging to fill these needs.
Meanwhile, higher incomes are fueling personal spending. The emergence of the middle class in Latin America is driving increased demand for more cars, more computers, more luxuries and consumer goods in general.
One of the biggest beneficiaries of these developments are the telecommunications companies. Their services are becoming a necessity with demand for cellular, Internet and cable services soaring.
Unlike industrialized nations, emerging economies can leapfrog directly into state-of-the art wireless networks. Already, 45% of the region's population uses cell phones.
But with new 3G networks becoming more widely available, sales of the new smart phones are exploding. A comparison with smart phone penetration in other parts of the world implies sales of another 30 million smart phones units as Latin countries catch up!
Why is demand so high?
Availability – In most Latin countries, it takes way too long to get a land line. Many of the traditional fixed land line companies still have substantial installation backlogs. Compare that to the same-day type of service which has become the norm for cell phone users.
Accessibility -- More phones mean more calls. Argentina, Brazil, Chile, Columbia, Mexico and Peru represent 78% of the total regional phone market ... and as the cell networks grow, so too should the utilization levels.
Affordability -- With equipment production improving and competitive pricing, the average price of a mobile phone has come down substantially, making it possible for a greater number of consumers to purchase service bundles ranging from low volume pre-paid to high volume post-paid packages.
In your FREE Special Report, you'll find my latest specific recommendation for cashing in on this Latin cell phone bonanza including the telecom that expects a 22% growth in broadband users and a 30% increase in mobile customers for 2009. Clearly, Latin Americans have caught "cell phone fever."
More Latin Americans making more phone calls can put more money in your retirement account! It's that simple.
Mega-Trend #2: ENERGY
The inevitable return of much-higher oil prices will increase demand for ethanol-generated power! And Latin America is the only region that is producing ethanol at a competitive cost. Unlike corn-based production in the U.S. our Latin neighbors are able to produce ethanol at far less cost using sugarcane.
Let's face it, despite the recent short-term dip in crude oil prices, there's not much serious debate that we're in for a trading range of $50-$80 a barrel in the near future. Oil at these levels creates a huge demand for ethanol, the only viable alternative fuel available.
The global market for ethanol is already 46.5 billion liters. Ethanol as a fuel accounts for 30.6 billion liters, or 67% of total ethanol production. Right now, gasoline/ethanol consumption represents just 2.6% of the market. An increase to10% of the automotive market represents an extra 118 billion liters of ethanol.
Here's why that's good news for Latin investors who understand the economics of producing ethanol from sugarcane:
- Latin America has the largest potential arable land per capita, of which only 13.9% is currently being farmed.
- Fact: Thirty-three percent of the world's internal renewable water resources are concentrated in Latin America.
- Fact: The United States and Brazil now account for 90% of the world's ethanol production used for fuel -- the U.S. supply comes from corn; Brazil harvests its abundant sugarcane crop. And while Brazil is exporting ethanol to Europe and the rest of the world, U.S. production can't even keep up with domestic demand.
Now, add in this fact: Ethanol fuel use in the U.S. is just starting to scale up. From 1980 onward, new North American cars have been able to run on a mixture of 10% ethanol and 90% gasoline. Select flex-fuel models with E85 (85% ethanol) have been available for sale in the U.S. since 1991 on a special order basis. These now account for only five million vehicles on American roads today. Government fleet vehicles are important users of E85, many sporting logos promoting this alternative.
But even greater usage changes are on the horizon!
The US Congress recently passed a bill to increase the alternative fuel production requirements nearly fivefold. Thanks to this measure, America is now committed to 10 billion gallons of renewable fuels in 2009 and 36 billion by 2022.
Even though America now leads in ethanol production, the U.S. is unable to meet domestic demand and is now importing ethanol. One of the most important ethanol producers in the U.S., ADM (NYSE:ADM), just announced that U.S. ethanol production was down 21 percent, from some 12.9 million gallons in mid-late 2008 to 10.2 million.
That's one of the reasons why President Obama met recently with Brazil's President Lula to discuss energy and the vital role Brazilian ethanol will play in helping the US with its coming energy shortage.
That's why imports of Latin-produced ethanol are about to explode and why Brazil has become the world's ethanol powerhouse...- Brazil has lower costs. Its ethanol is about 30% less expensive than gasoline. According to the World Bank and other estimates, it's about 50 cents cheaper per gallon to produce sugarcane ethanol. And although ethanol gets slightly less mileage, it's still cheaper on a per-mile-driven basis than gasoline.
- It has scalable operations. Brazil produces about five billion gallons of ethanol annually using sugarcane, which is less costly than the corn used to produce ethanol in the United States. That's good news since the fuel has gained importance in recent years. Concerns about energy demand and global climate change have made alternative, renewable fuels -- including ethanol, solar and wind -- more attractive to investors.
- It has a strong domestic market that supports volume production. Brazil has a history of using ethanol in automobiles. When first introduced in the late '70s, the cars were designed to run 100% on ethanol. Now with flex-fuel technology, a car can run on gasoline, ethanol or any blend of the two. At present, more than 80% of new Brazilian cars sold are of this type. Vehicle sales stats for January and February 2009 show that total Brazil auto sales remain robust. So Brazil's internal demand for ethanol keeps rising.
- Brazil is ready to export now. Brazilian producers are aggressively working to increase ethanol production capacity. The sugar and alcohol producers in Brazil (UNICA) point to 89 new sugar distilleries being built -- with 20 of these becoming operational this year -- as a sign of their commitment to delivering additional supply. The country's production capacity is set to grow to 25 billion liters (4.75 million to 6.6 million gallons) of fuel alcohol by 2010 up from 22 billion liters in 2009.
Brazil's ethanol shipments abroad jumped 45% from 3.5 billion liters in 2007 to 5.1 billion liters in 2009, which keeps Brazil at the top in global ethanol exports. Brazil is also number one in sugar exports, with 19.4 million tons in 2007 and a slightly better 19.5 million tons in 2008.
Ethanol is finding advocates everywhere, in addition to the United States, in China, Japan and even the European Union where governments have taken steps to introduce ethanol as a required component.
Ecuador, Italy and others have also reached agreements with Brazil on ethanol trade and technology. In response to the world's growing demand for ethanol, many international companies are eyeing both acquisitions and new investments in Brazil.
For example, the second-largest oil company in Europe, British Petroleum (NYSE:BP) plans to invest between $5- $6 billion in ethanol production over the next five to ten years. BP estimates that by 2030, bio-fuels will answer for up to 19% of the global fuels market for transportation.
Naturally, the outlook for ethanol is tied to the cost of crude oil. but with oil once again in the $50-$80-a-barrel range, and on its way back to $100 and higher, ethanol producers and distributors have a major role in fulfilling our energy requirements for as far as I can see.
Mega-Trend #3: MATERIALS
Despite the recent sell-off in commodities, global long-term demand for metals can only increase as the world's swelling consumer class clamors to buy more "things." And this growing demand can only be met with the help of South America's vast, untapped mineral wealth.
The region holds some of the world's largest and most competitive deposits of alumina, bauxite, copper, iron ore, nickel and zinc, as well as massive gold and silver mines. And that's an enviable position, given that a return to pre-crash prices for commodities of all types is inevitable in the not-too-distant future!
Look what's happened to copper, for example.
Worldwide copper supplies are limited and concentrated in the hands of a small number of producers with the capital and distribution clout to ship to global markets. The world's largest producer of copper is in Chile and the third largest is in Peru.
On credit fears and drops in demand, copper prices went into freefall plunging 69% from $4 in March of 2008 to $1.25 at year end.
In response, copper companies slashed production and cancelled orders.
The tactic worked and copper prices are now up 33% from lows of a few months ago and likely to climb much higher.


But more price upside is expected as the large stimulus plans take effect over the coming year. The 787 billion U.S. dollars stimulus package in the United States will include expenditure on copper-intensive projects such as public transport and school buildings. China too has a stimulus package of 568 billion dollars to boost the infrastructure market, which is also copper-intensive.
In your FREE Report, Greatest Riches In Latin America, you'll discover the #1 best way to invest in the unstoppable demand for copper.
It’s the same story in gold. Central America is re-emerging as a top destination for mining companies, with governments encouraging mineral exploration and mining.
In your FREE Report, you'll find all the details about this giant mining company that is expected to produce more than 2.3 million tons of gold this year.
In Mexico, the company is about to initiate one of the largest gold mining operations in the world at a site estimated to contain 17.4 million ounces of gold and 1 billion ounces of silver. It also has plans in the Dominican Republic for a new gold mining venture where it expects to recover 12.2 million ounces of gold. The company also plans to develop still another mine in Guatemala where it already has operating mines.
The stock price was up 6% in 2008 versus a drop of 33% for the Dow Jones Industrials Index.
With the recent surge in gold prices to nearly $1,000 per ounce, this one is likely to head for the skies.
The list of recent mining deals and projects is long and growing. Here are just a few you'll find covered in your FREE Report Greatest Riches n Latin America:
According to Mining Deals 2008, an annual review by PricewaterhouseCoopers:
- The total value of all South American mining deals rose dramatically from $8.7bn in 2007 to $22.8bn in 2008. Brazil claims $17.7bn of the region’s mining deals– up nearly fivefold from the $3.6bn in 2007.
- Mining deals involving Chinese buyers rose fourfold from $6.7bn in 2007 to $25.5bn in 2008. This trend is continuing and, in fact, increasing in 2009 with deals announced in February by Chinalco (a $19.5 billion transaction with Rio Tinto), China Minmetals (a $2.5 billion bid for Oz Minerals) and Hunan Valin ($0.9 billion investment in Fortescue).
While the credit crunch has slowed recent announcements, more opportunities are already on the planning boards of several major global corporations. According to management consulting firm McKinsey & Co., Latin America will account for more than one-quarter -- some 28% -- of global investments in new mining projects over the next five years. Smart investor money follows these new profit opportunities.
There’s Never Been a Better Time to Invest
In Latin American Stocks!
The picture is clear: Latin American stocks have changed from a specialty asset class to investments that everyone should consider owning. Their long-term performance will continue to be driven by favorable demographics, easy access to scarce natural resources, and a rapid technology transfer across several major sectors.
Here’s why appreciation in my favorite Latin stocks will continue ...
- While the Global economy is in the grip of the worst financial crisis in over 100 years, GDP growth of the 19 countries that make up the Latin economy is projected to come in at a very healthy 3.2% in 2010.
- China, already responding to Beijing's massive stimulus program is now the second-largest trading partner for Peru and Brazil ... the third largest for Chile ... and the fourth largest for Argentina, according to data from the Inter-American Development Bank. It will play an increasingly important economic role, effectively adding more stability to the region.
- Latin America is facing its own energy crisis. Electric power brown-outs are common and getting worse. By 2020, there will be more people in Latin America than in all of Europe. In line with this, demand for clean alternative fuels will also continue to grow -- pushing investment into ethanol, hydroelectric and other power projects.
- Strong corporate balance sheets are fueling continued merger and acquisition activities.
Could there be some volatility?
Of course! Every prudent investor knows that there are no guarantees. Occasionally, short-term events could cause some sleepless nights. It’s easy to imagine external events like politics, pandemics and power shortages changing the direction of stock markets. Short-term currency fluctuations can also play havoc with foreign stocks.
As far as I’m concerned, the biggest risk is not investing some of your money in Latin America.
You can not afford to be out of this dynamic market if you are looking to build wealth, because emerging markets have far better prospects than U.S. stocks over the next few years.
If you want a way to track Latin American investments, take a look at the stocks in the LCM Latin Beat Index in the Appendix. This is a subset of the stocks I follow for institutional investors at LatinCapitalMarket.com and contains 60+ stocks with an average market valuation of $3 billion at today’s distressed prices.
The LCM Latin Beat Index average forecast earnings growth is 15% over the next 12 months. While the stocks in this index are down 7% year-to-date (versus a 17% decline in the MSCI World Index), current valuations of 11 times 2009 earnings and 10 times 2010 forecasts are still quite reasonable.
Still not seeing the difference? I constructed an illustration using the equal weighted index of all the Latin American stocks I follow. It shows the spectacular past movement in the LCM Latin Stock Beat Index versus other global stock benchmarks since the November low, about four months ago.
Latin American stocks rose 23% since then and clearly beat other alternatives.
As you can see, it decisively beat the major U.S. stock average, the S&P 500 ... It also beat the major ADR average, the S&P ADR . And it even beat the international MSCI EAFA Index (which covers Europe, Asia and the Far East) ... These past performance differences are simply too large to ignore!
Why should you believe me and why should
you invest on my say so?
Let's face it, Latin stocks are not currently high on Wall Street's hit parade. My brand new advisory, Latin Stock Investing, is the new kid on the block, and unless you've been active in the world of wealth-management, you probably never heard of me.
My 30-year career has been with three high-profile Wall Street firms. My job was conservative wealth management and at one time, I was responsible for tens of billions of client money.
After a stint as Director of Research at TheStreet.com Ratings – where I was responsible for stock, mutual fund and ETF investment research – I struck out on my own and now make a very comfortable living using my special knowledge of Latin markets to provide actionable trading recommendations to a handful of large institutional clients.
By way of demonstrating that I know what I'm doing and am making my institutional clients some very nice profits, here are the actual verifiable results of just a few of my clients' trades made when they acted on my recommendations:
- 73.20% gain in just 61 days on a Brazilian bank BUY rating.
- 66.40% gain in just over 4 months on a Mexican steel company recommendation.
- 63.40% gain in just 127 days on my Brazilian Telecom play
- 62.3% gain in just 127 days on my Brazilian Utility stock call
- 45% gain in just 45 days on my Mexican Cement alert.
One of my institutional clients recently reported a one-day gain of 5% on their entire portfolio as a result of my recommendations. Granted they have millions invested and they have the staying power for these types of swings in performance.
Some of My Money is Where My Mouth is!
Oh, I guess I should tell you that I've got skin in this game. YES! I do trade some of my recommendations with my own money. And that should make you feel confident about my recommendations. I assure you. I play by the rules and never place a buy or sell order for any equity I recommend in Latin Stock Investing, until I've emailed my subscribers in advance and alerted all to what I'm about to do with my own money.
My Promise to you:
Because, Latin Stock Investing is a newly-launched advisory, I'm happy to offer you a trial subscription on a limited-risk basis – sign up now as a Charter Subscriber and not only will you activate an immediate 50% discount (save $150 off the regular one-year rate) but...
...if at any time you ever feel you're not getting 1,000 times your money's worth, you get your money back – all of it, the entire caboodle outstanding on your service, whether it's in six months or in six years, no questions asked, no ifs, no ands, nor any small-print buts!
I know I can make you a ton of money and I want you to feel comfortable taking a shot at my new advisory.
Claim Your FREE Special Report Now and Discover:
- Why talks with China over a $10 billion deal are your signal to load up now on the stock of this Latin oil producer. It's under-valued stock is down some 60% from its 52-week high and poised for liftoff.
- How to triple and quadruple your money from the global food crisis and this Latin country's ability to harvest soybeans three times per year. Thanks to its climate there is suddenly an explosive need for fertilizer, farm machinery and seed stocks.
- The Latin wireless company that reported January 2009 was its second best month ever in terms of subscriber growth. You can pick up its ADR at less than $30 a share and I'm looking to sell it within 12-18 months for better than $40!
- Why you can't go wrong investing now in one of the five strongest banks in the Latin system that now control 65% of Brazil's money.


- The Peruvian mining company that's among the biggest gold and silver producers in the world and has joint venture agreements with Newmont and other big international players.
- The #1 best way to cash in on the manufacture and sale of sugar and ethanol in Brazil.
Don't Wait For Wall Street to Repair the Damage! The Healing Has already Begun in Latin America.
To begin your limited-risk Charter Subscription, to claim your FREE copy of Greatest Riches In Latin America, and to activate an immediate 50% discount, just click on the link below:




Latin Stock Investing (12 months) - $149 
