A Country That Will Help Lead the 21st Century (is Not the One You Think)

One of the best economies in the world right now is not China or Saudi Arabia or some other far-off place. It’s right next door, in Mexico.

My Global Resource Hunter subscribers took a round of gains on the iShares MSCI Mexico Capped Investable Market Index Fund (EWW) earlier this year. We grabbed it again recently and the position is showing an open gain.

There are fundamental reasons why, but a picture is worth a thousand words  …

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So, let me show you a chart …

(Updated chart)

Looking at the chart, we can see a couple of things. Clearly, the iShares Mexico Index, which tracks a basket of Mexico’s best stocks, is channeling upward.

Plus EWW pushed above overhead resistance last week. I think it should zig-zag its way to $99 — maybe higher.

Here are some of the fundamentals driving this move  …

Government Reforms: A pro-business, reform-minded politician, President Enrique Pena Nieto, took charge in Mexico in December. He is opening Mexico’s telecom, television and energy markets — and creating opportunities for investors.

Higher Sovereign Rating: Thanks in part to Nieto’s reforms, Standard & Poor’s upgraded the outlook for Mexico’s sovereign credit rating to positive from stable. This signals a possible upgrade in the next 18 months, which is attracting foreign investment.

Good Neighbors are Good for Business: Thanks to the North American Free Trade Agreement, Mexico’s economy is leveraged to U.S. economic growth — and the U.S. economy is growing thanks to our energy boom and other factors.

Mexico became a place where U.S. companies outsourced their labor. Manufactured goods represent 71% of Mexico’s total exports, with 79% of its total exports going to the United States.

Demographics: More than 55% of Mexicans are 30 years old or younger. This is a generation that is growing wealthier than their parents, and they want to buy cars, eat, dress well and invest.

For a while, Mexico lost business to China. But now manufacturing is shifting back to Mexico due to rising labor costs in China and increased transportation costs.

EWW tracks a basket of leading Mexican companies including mining-and-materials giant Grupo Mexico (GMBXF), beverage firms including Coca-Cola Femsa (KOF) and Grupo Modelo (GPMCF) and retail companies including Wal-Mart de Mexico (WMMVY).

These are companies whose shareholders should benefit as Mexico rides a new capitalist boom and benefits from increasing consumer purchasing power.

Does Mexico have problems? Yes. The drug war is still going on, and there are parts of Mexico that I wouldn’t go to, and neither should you. But there is also tremendous opportunity, and an investor would be foolish to ignore it.

My Global Resource Hunter subscribers received my previous buy recommendation on EWW, and my recommendation to grab gains. I told them when they should buy the fund again, and I’ll let them know when it’s time to exit down the road.

If you’re doing this on your own, do your own due diligence. But if you’d like to get my picks when the opportunities are at optimal buy and sell points — click here to join us!

The markets are trending higher. Pullbacks are buying opportunities. This is not a time to sit on your hands.

This is a time to get busy and make the most of the opportunities in front of you. And I think a very good opportunity lies south of the border.

All the best,

Sean

P.S. Know what else you can find south of the border? Some pretty explosive gold and silver mining plays.

But don’t take it (just) from me — one of the premier precious metals investing managers in the country, Rick Rule, agrees with me.

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Your thoughts on “A Country That Will Help Lead the 21st Century (is Not the One You Think)”

  1. I was just wondering whether you were using the latest idea in predicting commodities (of the type that are dependent on the weather) using the services of Piers Corbyn?

    With all the nonsensical anti-investment aura of global warming, courtesy of Gore who ought to be knowing what his handiwork is going to do which makes me think that he’s is either CIA-hollywood-dazzled or he’s really demonically devious, maybe you’re averse to dabbling in those commodities? Are you?

    Because Corbyn has shown that the CO2 stuff is a myth, how? Well the Israelis noticed a correlation between longterm sunspot history and the archeological indications of past seasonal extremes in weather… Corbyn has used this idea to blow away the acknowledged experts in London’s high tech weather prediction fraternity and he’s been putting his money on the line and winning the rather public bets, to the annoyance of the fraternity (in bed with Gore’s ideas and using global warming models) .. So we think you’d really like to see what we saw at IndyMichael’s coverage of that phenomena.. There’s only a couple of the blogs on Sandy Hook so far, so you should easily spot the one on Sunspots… Are you game to look if you haven’t seen this yet?

    Being from Cincinnati, we were impressed to see what IndyMichael.net did to confirm his own idas on whether to believe in Corbyn or not.. so enjoy it..

    I am certain that you will be impressed with Corbyn’s ability to project the ups and downs of seasons over their expected patterns, which would give the special field of commodities a serious EDGE which is something we would be interested in knowing about from your perspective… wouldn’t you think that would make an excellent shake-up idea.. ttyl.

Comments are closed.

Sean travels far and wide to seek out small-cap values in the natural resource sector. His journey started in New England. As a youth he worked on Mt. Washington, on the cog railroad that runs to the summit.