“The time to buy is when blood is running in the streets”.—Baron Rothschild

It feels much better to buy assets while they’re rising, but it’s usually smarter to buy after they’ve been fallen for a while.”— Howard Marks

According to the Ivy Portfolio the median country returns from 1903 to 2007 is 10.65% (all years), and 14.9% after three down years in a row.

Recent data by Dimson, Marsh, Staunton database showed a median country returns of 8.74% (all years) and 15.94% after 3 down years in a row, both suggest that you will double the median return of all years if you own a country etf that is down 3 years in a row.  It’s a very rare occasion that only happens 3% of the time.

Currently Brazil $EWZ is down multiple years in a row and is the only candidate right now to possibly double the median country return.  I bring this up now because recently there has been massive put buying in $EWZ and just today Standard and Poors lowered their rating on Brazil to a negative.  The ETF responds by bouncing from the 2008 lows, printing a hammer on the daily chart, and possibly a failed breakdown on the weekly chart, all which I believe has bullish implications in the short term.


With $EWZ down 47.76% from its 52 week high, 20% below its 200 day moving average, down 13.78% in the last month, -22.58% in the last 3 months, and 61% in the last 5 years.  If time is on your side and you have the stomach for it you may want to consider this ETF.  I’m sure it won’t be an easy ride.

p.s on a adjusted close basis EWZ was up in 2012.

fzorrilla@zorcapital.com   @Zortrades