Holy Land Update

Since starting our position in Israel on December 1, 2009, Israel has gained 12.5%. The S&P 500 gained 6.4% over the same time period. We added to our position on January 21, 2009 and posted about Israel the next day on the blog. Since Jan. 21 Israel is up 8% compared to 7.8% for the S&P 500. We are still bullish on Israel in the upcoming months.

Latin America

In the summer of 2009, BFIA was extremely bullish on Latin America. Well, Latin America was the top performer in 2009. The average Latin American mutual fund outperformed all other market funds. The question is will Latin America keep outperforming over the course of 2010?

Our allocation in the summer of 2009 was 26%. Latin America was our largest exposure. Currently our behavioral model indicates a 13% allocation to Latin America. A pretty significant reduction. Therefore, we believe in there are other markets out there that will become the outperformers for 2010. Wait to see if our behavioral model is correct again.

Paul Samuelson

Paul Samuelson and Robert Solow are Nobel Prize winning economists. I am fortunate to participate in the same volume as the nobel laureates and many other very distinguished colleagues.

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Update

From mid to late January we saw a pull back in the global stock markets. Some pundits said this was a double dip recession where we would begin to pullback to numbers not seen since October of 08. However, our model suggested this was just volatility meaning traders taking profits and not an inflection point. As of today, markets have rebounded some. What is our long-term view. We are cautious of course on Europe, US, and now Asia. We are bullish on Israel, India, and South Africa.

Volatility or Inflection Point

This past week the major indices were down more than 5%. What does this mean. Does it mean we are in for a downturn in the financial markets? Or is it just volatility meaning there is no substance behind the selling?

My model indicates we are just seeing volatility. The next several weeks will determine if we are correct.

The Holy Land

The BRIC markets have made headlines in the last several years as the markets to invest in. How about now? Are the BRIC markets still the markets to beat? My quantitative model says that Israel is the market to be bullish on over the next year or two.

China

Well my index spoke loud and clear about China. Weeks well before China announced contractionary measures my index was signaling bearish sentiment on China. See post from December. More to come on China.