There is also the “Draghi Put,” or the belief that ECB President Mario Draghi will live up to his word to do “whatever it takes” to keep the euro intact. This, more than anything, has been what has stabilized the Eurozone over the past nine months.And finally, don’t underestimate the effects of “crisis fatigue.” After three years of crisis, these sorts of headlines simply don’t have the ability to move the market like they used to. Things could still get very ugly very fast in Europe if the feared contagion finally does happen. But for now, it looks as though this too shall pass. Cyprus may choose to leave the Eurozone before this is over or may well become a Russian client state; anything is possible at this point. But I don’t see any of these outcomes changing the direction of events. The Eurozone will undergo deeper integration. With or without Cyprus, the rest of the Eurozone will sink or swim together. This makes things a little awkward for non-Eurozone EU members like the UK, Sweden and Demark. But even as the cumbersome, confusing mess it is, the Eurozone will muddle through. How are we to invest in this environment? I'm using any sell-offs to accumulate shares of some of Europe’s finest companies. One in particular I like at current prices is Spanish telecom giant Telefonica (NYSE:TEF). Telefonica is quietly paying down its debts, and I expect the company to reinstate its dividend within the next 1-2 years. In the meantime, I believe it's an excellent way to gain exposure to the growing markets of Latin America, where it obtains more than half its revenues. Image: LaRezistance The investments discussed are held in client accounts as of February 28, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.
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