So we have the latest reports: inflation is off the charts, housing prices are dropping at record rates, consumer confidence is extremely pessimistic, bond insurers are teetering on the edge of losing their AAA bond rating and the market is......going UP?!
I have no clue what's going on, apparently bond insurance rating is more important than consumer outlook and inflation! On the brightside, I found an interesting company during my research of this market freakyness.
The company, CPFL Energia S.A. (CPL), is a utility company in Brazil. YES, Brazil. I recently read an article about Mr. Buffett buying the Brazilian Real since he was bearish towards the U.S. dollar. Let's face it Bernanke is letting inflation out of control and the market will soon respond. But I'm not going to get into that. Basically, in order to hedge the U.S. market going sour, I've decided to play the Brazilian economy. Yes, they have been through many crises in the past, but they have since turned the economy an entire 180 degrees. Inflation rate in Brazil has gone from 25% to less than 5% in the past 6 years!
With ever increasing energy prices, a growing economy, and high barriers to entry, this Brazilian utility should be an excellent play. Not to mention their PEG ratio is just under 1.10!
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