iBankCoin
The first hit is always on the house.
Joined Aug 2, 2009
1,824 Blog Posts

EYEBANGING BRAZIL

The names $EWZ, $PBR and $VALE have come up recently in discussions about Emerging Markets.

I have no desire to have any exposure to Europe right now, despite Barron’s telling me what a great and crowded long this is in the market right now.

Speaking of which, I closed out my Feb $FXE long yesterday.

I do like Brazil though, and today’s action seems like the perfect reason to step up and invest.

I’m rooting for a market selloff into the weekend. If that’s the case, I’ll start with some shares of $VALE for the long term.

Anyone buying into this stuff today?

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30 comments

  1. ferd

    Sold ABEV and PBR near recent highs before the meltdown …may look to get back into both. Held VALE through this flush and it still looks to be in aversion on weekly.

    Added SM to oils, bought CLF this AM. Bought V puts.

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  2. Formergeek

    Probably going to regret not picking up a little $SID today, trying for $1.75

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  3. heckler

    More power to you for anticipating the reversal but do you ever just stick to stuff thats trending up OA?

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    • Option Addict

      I own a fuckload of China shit going to the fucking moon.

      With investment dollars, why is it so taboo to buy things going down? Fuck, I feel like I am in the wrong room or something.

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      • Heckler

        I think it’s probably I that’s in the wrong room because I’ve never traded an option only shares, never had to fuck with expiry and that kind of shit. So for me, having been in Europe and FXE, I don’t know why I’d fuck with a trend that looks good.

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        • Option Addict

          It’s not an option thing at all. It’s a stock thing. I’m a stock picker. I’m pretty solid at it. I use options as a substitute so I can control more stock.

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  4. tnapearson86

    $VALE looks good. Eyeing some $GGB. Another steel name.

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  5. john_galt

    The only thing Brazilian I would buy right now is $PUSSY

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  6. tonka

    When Brazil bottomed $VALE and $PBR went up ~400%. $EWZ went up ~100% in the same time.

    Today $VALE falls 6% while $PBR and $EWZ fall 16%.

    Something doesn’t add up here. I usually want the shittiest stock in the worst market. If you can get the market at a bigger short term discount, why buy $VALE?

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    • Option Addict

      It sounds like you’re confusing your methods and mine.

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      • tonka

        No doubt I am. Just a weird dislocation that is making me question my usual methods. You’ve always struck me as wanting the most momo regardless of timeframe.

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        • Option Addict

          So relative strength here is a good thing, no?

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          • tonka

            If this is gonna V-shape bounce, the shit will float, no?

            I’m actually more inclined to think today’s move in $EWZ is the price that is wrong. It looks like the “safe” bet, but you shouldn’t be able to get the market for a better price than the underlyings. It’ll probably continue to move about 1/4 the amount of the underlyings, just like in the past. Today is just an aberration. Just takes me a while to sound this stuff out.

            I’ll probably end up going with $PBR. Travelled $2-$12-$8 just like $VALE, with the added bonus of being down 7 months in a row.

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          • Option Addict

            Nooooo….shit floating is at the top of a move, not the bottom. Quality at bottoms, shit at tops.

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          • tonka

            Yes, shit floats at the top. But if it doesn’t rocket out of the turn at the bottom, every long only manager that bought quality to outperform on the way down would also outperform on the way back up. And that certainly hasn’t been my experience. This seems like almost too basic of a point to argue. Maybe we’re just speaking different languages. Risk adjusted it makes sense…3/4 the alpha for 1/2 the beta.

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          • Option Addict

            Like I said in my first reply, sounds like we experience different stuff. I have zero desire to argue either, so how about a 👍

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          • tonka

            Sounds good. I feel like there’s probably​ an “I told you so” coming my way in the near future. These longer term positions have a way of testing how long I’m willing to suffer.

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  7. Goober

    OA,

    Right there with you on this Brazil thing. I bought the bottom in Brazil before their last political crisis last year and stopped out in April when the ugliness started again (there were a few minor riots in late April that I think got blown out of proportion). That was one of my best trades of the past few years. EWZ has a high correlation with oil. I’ve been raising money today selling off my Santander options from the French election and my EFA paper and other recent european trades as well as a few of my old piece of shit value traps that aren’t working. It’s not always smart to buy blood and catch knives. But if you can identify the floor in something and you know commodities are bottoming, global macro picture slowly grinding along to a better place, then rewards begin to outweigh risks. Brazil isn’t Greece in 2011. Global markets are in an uptrend now – they were downtrending then.
    Also – central banks engineered a V bottom in global equities and oil in 2016. Compared to that difficulty – it should be no trouble to V bottom Brazil in 2017, right?

    Jose Zitelmann is the best stock picker in Brazil. His fund at BTG Pactual routinely beats the shit out of EWZ. He’s only down a few cents a share on his fund today in spite of the spanking that the Brazilian markets got. I’ll find out what he’s holding and do a pre-screen over the weekend for technicals as best I can. Sunday night I’ll e-mail you some GDR/ADR cheapies down there to maybe play as small stock trades. Not sure if these will be actionable next week as much as later on. The more liquid stuff that you’re already aware of is probably more actionable near term. But its worth taking a look.

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  8. Rough Lcky 11

    BITA boom

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  9. jtjudah

    $CLF. Love it.

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  10. thomasjefferson
    thomasjefferson

    I am currently holding several crushes:

    $ERII
    $JBLU
    $TOUR
    At least one more Brazil to go with $ERJ. Maybe $SID. I wish I would have checked $ITUB yestereday. It bottomed at the perfect spot.

    I think I may just buy the whole summer on those and close the damn grid.

    My two May bio’s, $BMRN and $ONCE both also look to be in fairly interesting positions if one were to zoom out.

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  11. og

    $WB $SINA looking a bit toppy? $CYOU $BABA seem to be holding strong though.

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