LatAm Isn’t One 'Play'; It's Thousands

In the last two weeks I have highlighted a few stocks and other things you can trade. The range of things is worth considering, because LatAm is still considered by many investors as a single block play, and the trader who breaks this simplistic view will have their hands on a significant trading advantage. So let's have a look at what's happened to the last two weeks’ worth of ideas since posting.

1) In this post dated 11th March there weren't any specific stocks mentioned, but four LatAm sectors I like right now. I know which stocks I was thinking about of course (and you don't...ha!), but so far the stocks that fall under these headings have been flat to slightly negative. Worst sector is the services (que sorpresa, huh?) and the best has been agro (one of my recos popped a sexy 15% last week, but I'm not telling you what it is...so tough).

2) In this post dated 12th March I talked about how to filter junior miners in the hope of finding an undiscovered gem. I used Nilam Resources (NILR.OB) as the example, a junior operating in Peru. Since then, NILR.ob has gone to U$2.25 and back to the U$2.15 starting point, but one thing to note is how it's been promoted in a paid newsletter service twice since the 12th. Be careful out there dudes, and don't swallow the hype. (Read the note to see what I think about NILR.OB).

3) In this post dated 13th March, the subject was the raw deal Venezuela gets from the financial press (and before you start we're talking economics here, not politics. Now feel free to climb back down from that soapbox, yeah?). Since then the Venezuelan currency has traded flat (as predicted). Mind you, there's not much chance of trading the VEF unless you live in Venezuela, so this one is kinda academic.

4) In this post dated 14th March the reco was a short on the Chilean ETF (ECH). Since then it's gone from U$51.34 to U$50.47 at time of writing, a drop of 1.7%. Not spectacular, but it's on the right side of the trade. Volume has been thin. The reco hasn't changed since then, and I still think it's worth shorting. The Chilean peso has been pretty weak since this note and the currency arbitrage says that ECH will drop compared to the local market prices.

5) In this note dated 18th March the reco was "buy Southern Copper (PCU)". Pretty cool so far, as it was U$102.20 and it's now U$105.54, that's a 3.3% profit and a good start. (Dude, I'll take 3.3% a week for the rest of my life without batting an eyelid.) But as I said before, micromanaging this one is not worth your time. Buy it...hold it...retire with it.

6) In this note dated 19th March, I said Ecuador's bonds were cheap and a good buy. And hot damn!, since then the bighitting raters at Fitch agreed and hiked Ecuador's sovereign rating two notches. That's a seriously good call, and I'm tooting my horn on this one, ok?

7) In this note dated 20th March, I told you how stupid the copper and commodities sell-off was and how copper and friends would rebound. And then in this note I showed you how ignorant the "professionals" are about the whole subject. Since then copper's up 3.3%. Nuff said.

So far so good, then. The call on Ecuador bonds couldn't have been timed better with a Rolex, and PCU is looking strong. Shorting ECH is at worst a good hedge in a regional portfolio and at best a killer play to clean up with on any energy shortage issues in April. Copper has bounced and totally confused the fruit flies who predicted the end of commodities world.