The complete list of Brazil ADRs traded on U.S. exchanges is listed below:

Wednesday on CNBC, Jim Rogers insisted that China and Brazil are the only BRIC countries worth investing in. Despite an election conducive to more capitalistic policy, India's ritualistic culture discourages competition, greed and other growth drivers. Russia is still in a newly liberated economic state, in which citizens have so much incentive to enjoy previously denied economic freedoms that they will make frivolous financial decisions until enough time passes or national policy encourages productivity and saving.

China's case is well documented and will not be rehashed here, as I believe Brazil is the only market worth investing in today. Brazil is the only nation with an immediate future of increased production and consumption. Unlike China, Brazil has provided more developed economies things they need, not things they want (sorry if I underestimate the value of your Pokemon cards, Playstations and Beanie Babies). The death of the American consumer only affects Brazil if it is a literal one, meaning Americans no longer need sugar, bananas or oil.

At the end of each trading week, Hillbent scans for the equity market for potential anomalies which exhibit extremely oversold and overbought conditions. Past observations have revealed that such candidates may experience reversal corrections to the upside or downside once the market reconfirms that their fundamentals remain solidly intact or relatively poor. From a contrarian perspective, these lists may also serve as a precursor to changes in institutional sentiment and underlying fundamentals.

(The purpose of this report is not to provide specific recommendations, but instead serve as a time-saving reference tool and starting point for investment ideas as the upcoming trading week unfolds. Of course, the results generated are not always perfect and users are strongly encouraged to perform their own due diligence on these names. Note that overbought and oversold conditions are based upon proprietary algorithms and quantitative models instead of conventional technical analysis indicators. As a supplement to this report, please refer to our ETF Trends Report to determine if market direction trends support a bullish or bearish investment bias over short-term, intermediate, and long-term timeframes.)

At the end of each trading week, Hillbent scans for the equity market for potential anomalies which exhibit extremely oversold and overbought conditions. Past observations have revealed that such candidates may experience reversal corrections to the upside or downside once the market reconfirms that their fundamentals remain solidly intact or relatively poor. From a contrarian perspective, these lists may also serve as a precursor to changes in institutional sentiment and underlying fundamentals.

(The purpose of this report is not to provide specific recommendations, but instead serve as a time-saving reference tool and starting point for investment ideas as the upcoming trading week unfolds. Of course, the results generated are not always perfect and users are strongly encouraged to perform their own due diligence on these names. Note that overbought and oversold conditions are based upon proprietary algorithms and quantitative models instead of conventional technical analysis indicators. As a supplement to this report, please refer to our Market Condition Summary to determine if market direction trends support a bullish or bearish investment bias over short-term, intermediate, and long-term timeframes.)

Water: A Defensive growth sector

In Part I of this series, I discussed some of the global trends in freshwater availability and drinkability. It is nothing less than amazing to me that somehow 6 billion people sustain life on the roughly 1% of the earth’s water that is not salt water or brackish water (comprising about 97.5%) or encased in polar and glacial ice (about 1.5%).

An important industry has developed around this fact to treat, clean, and transport this water from its various sources to where people drink it, shower in it, irrigate their fields with it, and use it in literally thousands of manufacturing and agricultural applications. Because of the limited supply, much of this “waste” water is then purified, cleaned, and recycled for use again. But we can only refresh, re-use, and recycle so much.

Some sector indexes have lost 10% or more in the last week, but the word "oversold" is not one I've heard recently. Maybe it has something to do with markets having gained 40% in just over two months, or some sort of "brude awakening" to sky high P/E ratios, but value is by no means in apparent abundance.

Telecommunications companies are generally seen as sustainable and growth oriented, and pay frequent dividends to boost cash flow and maintain a strong share price. Verizon (VZ) and AT&T (T) are not up anywhere near 40% from March lows, however they have reported negative growth (losses for AT&T) and were not hit nearly as hard as other sectors to begin with.

At the end of each trading week, our market direction radar scans the Hillbent 3000 universe (minimun average daily volume of 100k and largest 3000 market capitalization stocks) for the top 3 and bottom 3 sectors based upon aggregate performance and analyzes their winners and losers.

Using this weekly sector report on a regular basis allows Hillbent.com’s readers to efficiently monitor sector rotations and investor sentiment biases.

Some months ago during the difficult moments of the financial crisis, Morgan Stanley (MS) (Snapshot Report) issued a report forecasting a GDP contraction of 4.5% for Brazil in 2009. We always had a more benign view on emerging markets in general and Brazil in particular.

We had been stressing that: (i) the Brazilian banking system remains sound, (ii) domestic interest rates have huge room for cuts and (iii) Brazil is still a "closed" country which does not rely overly much on exports and imports. All this together points to a more positive economic environment in Brazil in 2009, if compared to more developed economies like those in Europe, the U.S. and Japan.

1. Demand: According to the history of an all-encompassing market known as "life," demand for water is more inelastic than that for any other commodity. Companhia de Saneamento do Estado de Sao Paolo (SBS) provides clean water and treates waste water for South America's largest city's drinking, farming, industrial and cleaning needs. Brazilian stocks like PBR and VALE are dependent on international demand for oil and steel, respectively, and fluctuate with the prices of those commodities. Fundamentally, SBS is subject only to the volatility of Sao Paolo residents' "desire to live."

2. Dividends: The Company returns profits to shareholders. 18% institutional ownership is massive for a South American company valued in the billions. Corruption has always been an issue in Brazil, but the share distribution (less than 1% of the remaining float is short) and an accelerating yield over 10% in the last 20 months are very reassuring.

If I was money on the sidelines, I sure know where I'd be heading Thursday. Mardi Gras, anyone?

With commodities markets selling off hard on Wednesday, commodity rich countries took major hits. Russia, in my opinion, has risen with oil despite major weakness in all other sectors. Brazil is a different story. Overal production and consumption grew in 2008 and have continued in 2009, not to mention a world leading resource portfolio.

By Claudio Freitas

As we expected, yesterday the Brazilian real went through the psychological barrier of BRL/US$ 2.00 without major problems. The continued acquisitions of dollars by the Brazilian Central Bank were not strong enough to prevent the appreciation of the Brazilian currency.

By Claudio Freitas, CFA

Most international investors believe Brazil is a commodity play and only pay attention to commodity stocks. In fact, around 50% of the Brazilian Bovespa Benchmark is pure commodity plays -- oil, mining and steel companies.

The list below was largely inspired by two Seeking Alpha articles I read recently, "Dividend Investing vs. Trading" and "Altria, Value Play or Value Trap?" In the former, author Dividend Growth Investor reminds us that long-term holding and reinvesting dividends from industry leaders is the historical "holy grail" of investment strategies. Equally influential were many of the comments made in response to the article, which were overwhelmingly in concordance with the author's sentiments. My other reference, written by Ryan Vanzo, warns investors of the risks associated with a high-yielding, financially sound company with signs of negative growth in the future.

Currently, about half of my stock portfolio is comprised of dividend payers in what I consider safe and growing industries. The other half is deep value growth plays, such as profitable China smallcaps trading at under half their book value. The gambler in me is very fond of the latter, and in no way has my confidence declined in any of my holdings. I do, however, have a family history of high blood pressure, not to mention a strong appreciation for sleeping at night. Either way, 6 months from now I intend for some combination of the companies below to make up 85%+ of my holdings.

As we have said last week, the Brazilian real is heading on a one-way street up against the U.S. dollar; we see this as a lasting trend and not as a short-term correction. As we also said here, the Brazilian Central Bank policy of accumulating reserves is a very good one, but it will not prevent the appreciation of the Brazilian real.

In the next few days, the Brazilian currency will test the psychological level of BRL/USD 2.00, and we expect it go through it without major problems. Yesterday the Brazilian BRL/USD reached 2.02 and it did not go further because the Brazilian Central Bank did all it could to prevent a major appreciation.

Since the last time I wrote about my portfolio, things have been volatile. Here are my actions since then:

New Buys

Foreign utility stocks have performed well off the lows seen in March this year, similar to the financial sector. While the financial sector gets most of the media attention due to the stress-tests in the US, as well as bailouts and other events, I wanted to find out how the foreign utility sector was performing since the March lows. The results of my research are displayed below in table form.

Performance of foreign utilities since March lows:

As I wrote this detailed analysis, I must confess to being relieved living in Oregon [USA] nearby the “Cascade Mountains” that hold one of the largest underground clean water supplies in North America. In good faith, I will also disclose as of this article's completion date; I did not hold any financial interests in the companies listed, rather it is an in-depth unbiased global report.

With all of the furor over the past quarter, I did not update my actions on my portfolio. Today I do so.

New Buys