An update...

I have not posted for a month since I've been busy with work and relocation from Bellevue -> Redmond (btw, moving is a bitch!)

I have also been quiet with my trading, I am still overweight on Brazil with the remaining vested in China. A lot has happened since my last post a month ago. We saw oil at record highs and just today I filled up my Audi with at 4.50 a gallon (1. I was at Chevon and 2. I pumped 92 octane... don't ask why). I think it's time to make regular drives to Costco for my gasoline! Bernanke in a surprising move spoke about the dollar yesterday (I say surprising because he rarely talks about the dollar directly).

"We are attentive to implications of changes in the value of the dollar for inflation and inflation expectations and will continue to formulate policy to guard against risks to both parts of our dual mandate, including the risk of an erosion in longer term inflation expectations"

It pretty much says "We are done printing money, lets get the dollar backup!". Commodities swiftly reacted as most of the hard and soft commodities have traded significantly lower. This brings me to my next topic, OIL.

There's no doubt that we are in a OIL bubble. But this bubble isn't one without strong fundamental. Today , Oil corrected back to 122 amidst demand concerns. Has 4.00+ gas really effected the way you live so far? Yes I agree its painful but so far I have not changed my spending habits. Oil has corrected and the oil bears are out with every possible way to sell crude. Reasons I have heard why crude will crash

1) USD dollar rising
2) CFTC stepping in to crush speculators
3) Demand drying up as oil hits record highs

While the USO (ETF tracking Crude) was over bought a week ago, the correction in the past few made crude over sold (I am too lazy to put the chart). On the note of CFTC eliminating speculators, I peronsally feel the impact will be limited. During this correction. I have been adding to my stake more PetroBras.

PetroBras fudmentals continue to be improving with news tonight that Fitch upgrading it's credit rating to BBB-. This past month, PetroBras has also secured 80% of the oil rigs in preparation for which could possibly be one of the largest discoveries since 1973.

For those who are interested or has a vested interested

Current Exploration Concessions
Off Shore Rig Stats
Block Relinquishment Schedule

The above three links should give you a good idea as to where the next discovery will be. On a more bearish front, the costs to exploit the new discoveries could cost near 240 billion dollars
I also added UBB (UNIBANCO BRASILRS SA) and X (US Steel) to my portfolio.

One of my favorite guru investor Ken Heebner was voted America's hottest investor (article below). Lets hope he lives forever because I do own shares in CGMFX :)
http://money.cnn.com/2008/05/23/magazines/fortune/birger_americas_hottest_investor.fortune/

I love Brazil :)

The S&P tonight raised Brazil's investment grade for the first time. Brazil's sovereign debt is now at BBB- up from BB+. This ultimatley lows funding costs and makes Brazil even more an attractive place for BIG money to invest. Bottom line, this is HUGE for brazil and I think it's only the beginning.

All brazilian stocks were on fire today, I'd be buying on any weakness

Brazilian exposure in my portfiolo:

RIO, PBR, FLATX, CGMFX

Looking to buy:

UBB, ITU

Adding to Petrobras / China

PBR:

Bought another 50 shares of PBR adding to my entire holdings to ~200 shares. Gotta love these pullbacks!

CAF:
Bought another 100 shares of CAF

POT:
Waiting for pullback to 170 before buying

Microsoft, Potash, the Dollar, and Taiwan

Microsoft:

As a employee, my opinion is ofcourse biased but I dont think the results were that bad. If you compare revenue against deferred vista / office revenues from last year, yeah its a drop. Factor them out and you have a solid company trading (as of right now) with a forward PE of around 13. I was happy to see XBOX in the green for the quarter and service continues to pick up momentum. What makes me shed a tear how MSN continues to bleed money..

Potash:

For those lacking confidence recently on the company, you should read their latest 10Q. It states a 6 -7 paragraph which confidently says "those who own our stock, buy more. For those who don't, buy our stock you dumbass". :)

Dollar:
The dollar continues to rally as hopes that BEN will take a break from printing money. This might pressure commodities prices but I seriously doubt it (although I feel rough rice will make a HUGE correction soon rather than later). The safest place to park money is still in the Yuan in my opinion

Taiwan:

more improving signs that things are improving between Taiwan and China

From scmp.com

"A top envoy for Taiwan’s president-elect was expected to meet with local officials in Shanghai on Friday in the latest sign of improving relations.
Chiang Pin-kung was appointed by Ma Ying-jeou, whose new government takes office May 20, as chairman of the Straits Exchange Foundation, a quasi-governmental body that has held talks in the past with a mainland counterpart. China and Taiwan split amid civil war in 1949.

Expectations have risen for a resumption of dialogue between the foundation and China’s Association for Relations Across the Taiwan Straits after a decade-long break."

Can the Red Dragon breath fire again

I was delighted to see my Chinese stocks light up this morning (CHL, LFC). Shanghai rallied 4+% percent last night making a huge reversal from the open. I believe we have seen a short term bottom from a very painful correction (painful is an understatement, the shanghai index dropped some 50% from peak!). Is all this buying pure speculation that the government will step in and stop the hemorrhage ahead of the olympics? It could be ... but I bet we'll see more bargin hunting even if we were to see lower lows.

I remain bullish of Taiwan:

http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSTP26206620080423
http://afp.google.com/article/ALeqM5gmTM58C0oFJXLpmnfHUw2ZIqkH1Q
http://www.iht.com/articles/ap/2008/04/22/business/AS-FIN-ECO-Taiwan-China-Investment.php


Looking to buy: CAF [Morgan Stanely A Shares China mutual fund]

Putting money in Taiwan

When Jim Rogers speaks, I listen and listen very carefully. Jim rogers recently has been bullish on Taiwan near the end of the Taiwan election when speculation that Ma Ying-jeou would win by a landside. With Ma taking over on April 20th, relationships between Tawian and the Red Dragon China are already improving. Vice-president-elect Vincent Siew met with President Hu Jintao of China on the sidelines of the Boao Forum. Ma called the meeting a success saying "Of the big icy mountain, only a small piece of ice is melted," This was considered the highest contact both countries had in more than six decades. China is also considering lifting visa restrictions for Hong Kong residents wanting to travel to Taiwan. Then were also rumors that China had removed missiles that were aimed at Taiwan. Tourism stocks have surged since the victory of Ma. I expect more economy prosperity for local businesses in Taiwan. It can only get better.

Disclosure: 700 shares of EWT (Taiwan ETF)

Could Petrobras be producing oil on a middle eastern scale?

Yesterday, the head of National Petroleum Agency Haroldo Lima made a statement regarding a potential oil find near Carioca field. He estimates that the area could potentially have reserves somewhere near the 33 billion barrels. If confirmed, the new deep-water sub-salt field off the coast of Sao Paulo state would be the largest find in the world in the past 30 years. The stock reacted, skyrocketing ~8%. Petrobras is my largest holding and I was happy to see any appreciation in this stock. This find if confirmed dwarfs the last time PetroBras discovered in Tupi. However, this news was widely known and many had widely speculated that huge amounts of oil in near the Caroica field existed. Is the market late to the game? Who knows. I do know that the managment at Petrobras is extremely conservative. When this is confirmed, it definitely puts Brazilians state owned Petrobras on the top 10 oil producing countries. Brazil to join OPEC ??? :)