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This 'Bad to Less Bad' Trade Has Hundreds-of-Percent Upside

By Dr. Steve Sjuggerud
Monday, May 9, 2016

Brazilian stocks rose 900% from 2002 to 2007.
 
Think about that for a minute...
 
I'm not talking about a single stock. The entire country's stock market soared 900%.
 
It's hard to imagine a country's stock market rising that much. But it really did happen in Brazil.
 
And right now, Brazilian stocks could be ready to rise by hundreds of percent again...
 
The story is simple: Brazil soared... and then crashed.
 
Yes, it went up 900%, dramatically outperforming emerging markets in general. But the way down was equally dramatic... The iShares MSCI Brazil Capped Fund (EWZ) fell from around $100 a share in 2008 to around $17 a share this past January.
 
Sometimes it's more helpful just to see it... So let's quickly look at some charts of the up... and then the down...
 
On the way up, Brazil led a great rally in emerging markets:
 

The way down was just as extreme. It felt like the crash accelerated in recent years...
 
Brazilian stocks are down more than 50% since oil prices peaked in 2014. Take a look...
 

After a move down like this, you can imagine how bad sentiment is...
 
I'll be honest with you, the story in Brazil has been bad. Corruption scandals, impeachment, a severe recession, the Zika virus, you name it. If it ain't one thing, it's two things.
 
Investors have given up. And that is actually what I like to see.
 
As regular DailyWealth readers know, this is a classic "bad to less bad" opportunity. In short, the biggest gains in investing come when things go from "bad" to "less bad."
 
The news out of Brazil has been bad... but Brazilian stocks are going up this year.
 
Could this be the start of the next triple-digit move in Brazil? Yes, it could.
 
A month ago, I recommended buying Brazil in my True Wealth Systems newsletter. The trade is up 19% since that recommendation.
 
But after an 80%-plus fall, and with hundreds-of-percent upside potential ahead, you haven't missed anything yet.
 
Consider buying in for the upside potential... and make sure you use a trailing stop to limit your downside risk.
 
Check out Brazil today...
 
Good investing,
 
Steve




Further Reading:

Individual investors are worried about U.S. stocks today. And as Steve recently noted, history suggests that's a good thing. Get the details here: Stocks Reach a Hated Extreme... Big Gains Ahead.
 
While things are looking up for Brazil, they're looking dire in Venezuela. "Venezuela is a disaster, and about to descend into chaos," Steve writes. He has explained recently that the country doesn't have enough money to print money... and it's all out of beer.

Market Notes


NEW HIGHS OF NOTE LAST WEEK
 
McDonald's (MCD)... fast food
Molson Coors Brewing (TAP)... beer
Pilgrim's Pride (PPC)... chicken
Post Holdings (POST)... cereal
Sysco (SYY)... food products
Clorox (CLX)... consumer goods
Colgate-Palmolive (CL)... consumer goods
Prestige Brands Holdings (PBH)... consumer goods
Baxter International (BAX)... medical devices
Becton Dickinson (BDX)... medical devices
Welltower (HCN)... health care REIT
Barrick Gold (ABX)... precious metals
First Majestic Silver (AG)... precious metals
Iamgold (IAG)... precious metals
Kinross Gold (KGC)... precious metals
Newmont Mining (NEM)... precious metals
NovaGold Resources (NG)... precious metals
Pan American Silver (PAAS)... precious metals
Silver Wheaton (SLW)... precious metals
Cablevision Systems (CVC)... cable television
Charter Communications (CHTR)... cable television
Time Warner Cable (TWC)... cable television
Lockheed Martin (LMT)... "offense" contractor
Northrop Grumman (NOC)... "offense" contractor
American Water Works (AWK)... public utilities

NEW LOWS OF NOTE LAST WEEK
 
American Airlines (AAL)... airlines
Nokia (NOK)... telecom giant
Twitter (TWTR)... social media
Sears Holdings (SHLD)... struggling retailer
Western Refining (WNR)... oil refiner
Western Digital (WDC)... data storage
SunPower (SPWR)... solar energy

premium teaser

How to buy Brazil with the biggest upside...
 
In my True Wealth Systems service, we take big risks – at the right times – to make the biggest returns. And that's exactly what we're doing in Brazil right now.
 

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