A group of 5 countries – Brazil, Russia, Australia, Canada and China – will flourish by controlling essential and ever scarcer natural resources, leading, in turn, to strong currencies. All investors should have stakes in these powerhouses. These BRACC countries are growing far faster than the rest of the world, mainly because of torrid growth in China and to a lesser extent in Brazil. Resource producers will benefit from rising resource prices, which, in turn, will further bolster the currencies of their countries. Five such stocks, BHP Billiton, CNOOC, Newcrest Mining, Petrobras and Potash, are in our Growth or Income picks. TCI newcomer pick is Brazil’s Vale S.A. (VALE 20.06 NYSE – yield 1.40%), the world’s largest iron ore producer and second-largest producer of nickel. Both metals are critical in manufacturing steel, which makes Vale essential to just about every infrastructure project in the world. With more than 5.5 billion people living in developing countries where infrastructure growth will outpace overall economic growth, Vale is assured of strong long-term growth. Expect volatility, as the stock will swing with the inevitable ups and downs in commodity prices. But as long as global growth is ascendant, Vale will be a strong performer, and in a decent worldwide economy it could easily double in the next 24 months. It’s on the short list for new additions to our Growth Portfolio.
Stephen Leeb, The Complete Investor
