One place where the markets and the CEOs are in total agreement is the turn in Latin America. Each CEO I interviewed off-camera last Friday said that business in Mexico is roaring and Brazil is coming back fast.
For Mexico, that's nothing new. Mexico's been on a pretty steady rebound for five years now. But Brazil is nothing short of miraculous. Every one of these CEOs who told me Brazil was coming back expressed surprise, if not shock, that this area could come back so strong so fast. Not one was tentative. All felt that Brazil could return as a growth market by the fourth quarter. We don't celebrate enough economic miracles around these parts. The turn in Korea is still relatively unheralded, even though Korea is a huge trading partner of ours. Now the same thing is happening in Brazil.
Last month, I
wrote about how I thought Brazil would surprise people to the upside, and all I got were negative emails about how Brazil had already happened and that it was too late to invest. That was only about 25% ago. Time to flog this story again. It is a remarkable turnabout from three months ago, all because a
-like central banker has taken control of the nation's finances.
I think there are much more gains to be had in Brazilian telephone, banking and cable issues. Brazil is operating off a very low base. When it gets it right, the country can pull a huge amount of weight. And pull in a huge amount of capital, much, much more than it has to date.
I know, for example, I am long
, betting that at its meeting Friday, management will say the same things I heard the
chiefs say to me: "Brazil is back and you can make money there again."
Throughout the tug-of-war period when the .coms wavered, the cyclicals advanced and the growth stocks got crushed, Mexico and Brazil have been nothing but up. If this pattern continues, funds that are invested there will lead the pack for the quarter. They will then get more money in.
And the virtuous cycle will continue.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Xerox, although positions can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at