Dear rss free blog,
When
you’re wounded and left on Afghanistan’s plains,
And the women
come out to cut up what remains,
Jest roll to your rifle and blow
out your brains
An’ go to your Gawd like a soldier.
(Rudyard
Kipling)
As
a New Yorker with friends who died in the Twin Towers, I am not
against the Afghanistan War; I think the US had no choice but to
take on the Taliban and Mullah Omar. Iraq was a distraction and I
would have focused on Afghanistan alone after the 2001 9/11 attacks,
had Pres. George W. Bush asked my advice.
But
remember that the Hindu Kush and the Pushtuns who live there defied
and defeated invaders well before the Soviet Union. Britain
throughout the 19th
century advanced and retreated from what is now Afghanistan.
If
the current coalition countries are going to try to clean up that
nest of terrorists, we had better be sure we have the stomach for
what it takes. It will not be easy or pleasant, and cannot be
undertaken with insouciance, as Lady Florentia Sales explained to
Britons a century and a half ago.
After
the men were slaughtered, this Victorian lady, riding side-saddle,
led the women and children on their retreat from Kabul. In those
days, the observant Muslim Pushtuns did not attack women and children
as they do today. Only the doctor was spared, to return to what is
now Pakistan to spread the news.
Gold
hit another new high. The exchange-traded funds are buying the
precious metal. But they may not be the best placement for investors.
An
Asia reader criticized my failure to whoop and holler about the new
Japanese CB measures (mistakenly called quantitative easing by the
Japanese) in yesterday’s blog. Rhett Butler in Gone with the Wind
is whom I would quote about
this, except this is a family newsletter. For political reasons,
Japan is trying to control its exchange rate and expansion, but
half-heartedly. It will have to go with the flow of the rest of the
industrial world. Much of the exchange rate intervention is Kabuki
theater.
I
also do not think there is much significance in the
beggar-my-neighbor exchange rate cut for the Vietnamese currency.
Vietnam is not exactly a major player but it is being hurt by the
renminbi from over the border in China sinking faster than its local
dong. Unless this starts a trend.
According
to Citi, in Nov.
worldwide, depositary receipts went up 4.87% while the S&P 500
rose 5.74%. This reversed a trend for the year to date where DR
shares did better than US ones. However, there were a few bright
spots, notably Latin America, where DR shares rose 10.21%;
Asia-Pacific ex-Japan where the rise was 8.67%; and Asian emerging
markets where it was 7.71%. We discuss how to play this below for
paid subscribers.
More
follows for our elite readers (who pay for stock information
follows), including a Japan idea and some gold stocks.
*Japan’s
NTT sub DoCoMo
is the likely beneficiary
and only way in for the unlisted Tata Teleservices
launch in India, which today announced three further areas for its
GSM systems in southern India. That brings Tata to 19 of the 22 areas
of the country. Tata uses DCM technology and DCM owns 16% of the
Indian firm.
Latin
America whose economies are more closely linked to the USA has
boosted gains more sharply than Asian emerging markets. This new
trend is good for shares we recommend.
*Cemex,
expected to benefit as US recovery leads to more money flows from
foreign workers to Mexico and Central America, used to build homes;
and more cement demand here CX also supplies. CX is recovering from a
disastrous foray into world cement-making which took it deeply into
debt for ventures in Britain and Australia. It will now stay closer
to home under the refinancing deal.
*BNS,
Scotiabank, is a major provider of financial services to Latin
America, with a good regulator in Ottawa. While outfits like WalMex
are going into credit cards and financial services for their
shoppers, I think Mexicans and South Americans will eventually move
to real banks where fees are much less onerous.
*Banco
Latino
of Panama will finance increasing trade south of our borders. BLX is
the stock I always tell people about when I am at parties where after
being introduced I am asked for a stock tip. It scares the
questioners off. But the conglomeration of export-import banks,
private banks, and shareholders is excellently managed and pays a
nice dividend. Unusually for Latin banks, it observes US reporting
requirements, admittedly not a guardian of probity in the current
market, except that in Panama they do it more seriously without
off-balance-sheet stunts.
*Post-merger
Perdigão dominates
the Brazilian meat-packing industry. It will benefit from prosperity
leading to more demand for poultry. BRF is a major exporter but I am
waiting for more demand within Latin America. Drought and locusts in
Argentina may force the land where you eat steak three times a day to
consider an occasional paradilla of chicken.
*SBS
is
awkward when dealing with its non-State of São Paulo shareholders
like us, but it is a key player in cleaning up São Paulo sewage,
providing drinking water, and now also electricity. These are
desperately needed. Thanks to Brazil’s receipts, it is raising money
locally to finance projects, better than tapping US markets.
*With
gold up again, my preference is not to buy physical gold, although
ETFs are the generator of higher prices for the precious metal. Mines
are the way to go. UBS today raised its estimates for Iamgold
to $20.50 from 18.50, a nice boost for IAG. Natch after an
initial jump the price fell back because of profit-taking. This is a
small and illiquid stock.
*Also
boosted, this time with less international impact, was the rump
Orezone, which Canaccord now expects will double from current
prices to C$1.60 (Its earlier estimate was C$1.) ORCZF.PK is even
more illiquid.
*More
gold. To play goldmines with a fund, ASA is probably the best
way to do this easily. It pays a $1.30 dividend per share to boot.
Like most closed-end funds, it trades at a discount to NAV, something
you never get with a gold ETF.
*Teva
and British pharma co. Shire
plc settled their
latest lawsuit and Shire will now let Teva do an authorized generic
of attention deficit drug Adderall XR. No money will change hands. As
I keep saying, Teva, besides being the largest independent generic
company in the world, has the best legal eagles in the generic
industry. Both these facts give it an edge.
*Sampo,
the Finnish insurer, reported 9-mo pretax profits up 21% to euros 47
bn. While Nordic banking is consolidating, its new CEO said SAXPF
will not take stakes of more than 22-23% in Nordica
of
Denmark. Financial consolidation will require other players. It
already holds a stake in Top-Denmark
as well. It plans to boost its dividend to close to 6% which is good
news for shareholder.
*Some
trading notes. First, now that it is linked to the NYSE via Euronext,
I have restored the Dutch REIT Wereldhave
NV to a full position
in the model portfolio, for yield. It does not yet trade here but
that will come shortly. Its ticker symbol is WEHA on Euronext. (It is
wrongly given in the model portfolio; I misread my notes.)
*Again
I am trying to convert the Delek
Group ordinary shares
into the 10:1 ADRs now created. Delek is an Israeli conglomerate with
some resemblance to Berkshire
Hathaway, as it too is
funded by a diversifying insurance company placing premium income.
The ADR is trading as DGRLY; the Israeli stock, DLKGF, now appears to
be dormant on US market.
*After
telling reader LM yesterday to think hard about buying BCE,
the Canada telco beaten down because of a failed buyout, I noticed
that I misstated its yield in the model portfolio. It pays 6% not 9%
as shown. This is a nice dividend and safer than houses. It is a
yield play not a buy and hold, my error.
*Frida
Ghitis weighed in with an opinion that Congressional reforms may
boost Cryptologic,
a victim of Republican legislative self-righteousness. If you did not
sell CRYP.Q, or if you want to buy back the Irish Internet gambling
share, it has fallen further since we put a sell on it mainly because
I got bored watching the promise of profit not being fulfilled.
