Very quick post: IBOV finally took off. On one of my last posts I highlighted the importance of breaking the resistance at 52k points (IBOV was trying to break it since the beginning of Dec/14 and broke it in the end of March/15). I mentioned that the next resistance was at 56k and it was going to be fast. IBOV achieved 56k points in just 3 weeks and did a minor correction last week closing above 56k, which is really important.
Corruption case in PETR4 is being solved (not yet) but at least shows to investors that Brazil is trying to solve corruption. Because of that PETR4 had a huge increase (of course, after having a huge loss in the last months).
Stocks that we have 30% of what we previously bought are going very well and I will comment them on my next post.
One last thing I want to say is the opportunity I see on Brazilian Bonds. LFT is paying 13.25% / year (Yes, Brazil has one of the highest interest rates in the world to control inflation). BUT, for a foreigner, who lives in a country with practically zero inflation, this is an amazing opportunity. First: LFT is risk-free (there is no chance Brazil will default). Second: Real is depreciated versus dollar (good moment to send money to Brazil). Third: You can always hedge Real vs Dollar to be more relaxed about currency exchange.
Currently, I'm finishing my MBA and have a huge loan to pay... If I had extra cash now, I would invest in LFT and would be very happy with 13.25% per year... This rate can change, but it usually moves 0.25% up or down every 45 days. Since inflation is not controlled, I don't think it will go down very soon... But, I would be very happy with any value risk-free above 10%.
Thanks for reading the blog and have a great week!
Leo.
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