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The Stocks Billionaire Contrarians Are Buying

By Stansberry Research Interview Series
Monday, October 8, 2007

It's almost too simple.
 
Time and time again, I've written that you can be a fine investor simply by following what the top investors in the world are doing with their money. Because large investors like Warren Buffett, Charles Brandes, and the like have to file their stock purchases with the SEC, you can basically manage your own portfolio to mirror theirs. And you don't have to pay a cent in fees.
 
Just look at my April essay on Charles Brandes.
 
Brandes is a billionaire contrarian investor. Since 1987, his Global Equity Fund has returned average annual gains of 14%, outperforming the MSCI World Index by an average of 6% a year.
 
With these kinds of returns, Brandes has become one of the most sought-after asset managers in the world. As of June 30, Brandes Investment Partners had $125 billion under management.
 
Back in April, we noted that he had put nearly a quarter of his portfolio into telecom stocks, particularly global fixed-line operators. If you chose to follow Brandes into any of his top telecom holdings, you've made good money.
 
Company
Symbol
Price in April
Price Today
Gain
Telefonos
TMX
$34.99
$35.90
3%
Telefonica
TEF
$66.95
$80.20
20%
Deutsche
DT
$17.02
$19.25
13%
KT (Korea)
KTC
$22.20
$25.40
14%
 
Today, the telecom sector continues to heat up both domestically and abroad. Both Verizon and AT&T recently hit new 52-week highs. The dogs of the last five years are quickly becoming some of the best stocks to own. My colleague Porter Stansberry has been bullish on U.S. telecom since early 2006. His readers are already up 59% on Verizon.
 
However, I'm more interested in international telecom. In the last 20 years, many formerly state-owned telecom companies have become available for public investment. Almost all of these companies are former monopolies. Most have large moats around their business, since telecom is a capital-intensive industry.
 
So it's little surprise that Charles Brandes' latest quarterly filings reveal his positions in a number of other international telecom companies.
 
Company
Symbol
Brandes' Position
Telecom Argentina
TEO
$213 million
Telecom of New Zealand
NZT
$165 million
Telecom Italia
TI-A
$1.02 billion
Telecom Brasil
TBH
$451 million
 
You don't bet this big unless you expect big gains. Brandes is used to making them: Remember, he's averaged 14% a year since 1987.
 
It's time to own telecom, and it's time to go global.
 
Good trading,
 
Graham




Market Notes
A global stock boom… South Korea, South Africa, Russia, Taiwan, China, Australia, Canada, Germany, Spain, Brazil, India, and Singapore at new all-time highs.
 
The infrastructure rally continues… New highs for Jacobs Engineering, McDermott, KBR, Foster Wheeler, and Fluor.
 
World's largest producer of oil rigs, National Oilwell Varco hits an all-time high.
 
Telecom takes another step higher… Emerging Markets Telecom Fund at all-time high.
Market Watch
Symbol Price
Change
52-Wk
S&P 500 1221.53 +1.3% +10.1%
Oil 38.31 +1.4% -0.6%
Gold 138.07 +2.1% +16.3%
Silver 28.60 +2.4% +53.6%
US-Dollar 80.67 -0.8% +8.1%
Euro 1.32 +0.6% -12.1%
Volatility 18.01 -7.1% -19.8%
Gold Stocks 581.56 +3.0% +17.0%
10-Year Yield 3.02 +0.7% -10.7%

World ETFs
Symbol Price
Change
52-Wk
USA 122.89 +0.3% +11.3%
Canada 30.50 +0.2% +16.2%
Russia 21.94 +1.4% +18.1%
India 37.85 +0.3% +22.3%
Israel 16.69 +1.3% +10.8%
Japan 10.64 +0.6% +6.5%
Singapore 13.73 -1.1% +18.8%
Taiwan 14.78 +0.4% +19.2%
S. Korea 57.31 +1.3% +23.4%
S. Africa 71.87 +1.4% +28.2%
China 44.42 -1.4% -0.6%
Lat.America 53.17 +0.7% +8.4%

Sector ETFs
Symbol Price
Change
52-Wk
Oil Service 137.59 +1.0% +18.9%
Big Pharma 64.14 +0.0% -3.2%
Internet 72.07 -0.1% +23.4%
Semis 16.22 +1.2% +29.4%
Utilities 31.28 +0.2% +1.5%
Defense 18.52 +0.1% +10.6%
Nanotech 10.03 +0.4% +1.6%
Alt. Energy 10.08 +1.3% -3.3%
Water 18.49 +1.0% +14.5%
Insurance 16.14 +0.4% +21.1%
Biotech 20.54 -0.2% +28.1%
Retail 19.70 +0.3% +30.2%
Software 24.79 +0.8% +25.9%
Big Tech 53.87 +0.3% +22.7%
Construction 13.10 +0.9% +15.7%
Media 13.64 +0.5% +26.0%
Consumer Svcs 67.39 +0.2% +24.5%
Financials 55.04 +0.3% +7.4%
Health Care 64.30 +0.1% +2.0%
Industrials 63.54 +0.5% +21.0%
Basic Mat 74.35 +1.1% +25.3%
Real Estate 55.32 +0.1% +25.0%
Transportation 91.77 +0.7% +26.9%
Telecom 22.59 +0.5% +17.8%

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