Why Brazil is NOT Greece and How to Invest Without Fear

The Greek debt drama continues.

Greece received a 14.5 billion euro ($17.9 billion) emergency loan from the European Union today. This is just the first payment on the 110-billion euro aid package that Greece has received from the European Union and the International Monetary Fund.

Will the cash reduce investor fears about Greece’s default and that of other countries?

Stocks mentioned include:
• SABESP (NYSE:SBS)
• Vale (NYSE:VALE)
• Telefonica (NYSE:TEF)
• Banco Santander (NYSE:STD),
• Petrobras (NYSE:PBR), and others.

If Brazil’s Finance Minister is correct, the EU bailout should certainly make investors less nervous about emerging market countries such as Brazil. He points to the economic miracle that has transformed Brazil and how things have changed in the last decade.

Brazil is now one of the richest countries in the world. With $250 million in foreign exchange reserves, the seventh largest balance in the world, Brazil is not Greece.

Brazil’s President Lula has also been making the rounds speaking out about the benefits of aid packages but more important he says are real free trade practices that help countries earn their way to prosperity.

“When we wanted to become exporters the market was not as free as they said, which can only be described as the cruel side of the capitalist myopic approach to these challenges.”

Brazil is now the third largest global exporter of agricultural and food products.

• It’s the largest exporter of soybeans.
• It’s the largest exporter of sugar.
• And let’s not forget it’s also the largest exporter of coffee and orange juice.

This list includes even more agricultural export products, like beef, poultry and oilseed. The exports also include other natural resources. Almost on a daily basis we are reminded how important Brazilian iron ore exports are to steel production and the whole global economy.

With a large and growing agricultural, mining, manufacturing and service sectors, Brazil’s economy now ranks highest among all the South American countries.

And the best news of this is the surge in personal income is fueling a boom in consumer spending, in huge contrast to what is happening in the rest of the world.

Here are some trade ideas to take advantage of this current misunderstanding.

Stocks mentioned:
SABESP (NYSE:SBS), Vale (NYSE:VALE), Telefonica (NYSE:TEF), Banco Santander (NYSE:STD), Petrobras (NYSE:PBR), and others.