However in the past few years, production of oil from Shale rock has increased dramatically. Today U.S. Shale oil production accounts for a significant portion of the total U.S. oil production and even impacts the global oil output.

From a recent report on Shale oil industry in AXA Investment Managers:

The scale and pace of the development are already big enough to modify parts of the US economy. It channelled US$133.7bn worth of investments between 2008 and 2012,1 and hundreds of thousands of jobs in North Dakota and Texas. The result is an unprecedented push in crude oil production, reaching almost 2mbpd (million barrel per day) according to the latest data (Exhibit 2). According to EIA’s central scenario, US shale gas should culminate around 3mbpd by 2020, bringing total US oil output to 8mbpd (10mbpd according to the most bullish estimates, e.g. by BP). Today, US shale oil already represents a very significant 2.2% of global oil output.

Click to enlarge

Whether this surge will continue, fall off or even accelerate remains however an open question.

Source:  Shale fuels (part 2) – US oil: local benefits, global effects, 25th April 2013,  AXA Investment Managers

Related ETN:

iPath S&P GSCI Crude Oil TR Index ETN (OIL)

Disclosure: No Positions

From a 2012 article debunking this theory:

Larry Swedroe, head of research at Buckingham Asset Management, ran the numbers a few years ago using 30-day Treasurys during the off months, and says the strategy is bunk.

He looked at returns through 2007 from six start dates since 1950. “Sell in May” beat “buy and hold” if you started investing in 1960, 1970 and 2000, but not if you started in 1950, 1980 or 1990.

“It’s pure randomness,” Swedroe says. “How would you ever know when to start?”

Then there is the problem with using averages to say anything meaningful about stocks. If you know the average temperature for a month stretching back decades, you can pretty much guess how hot or cold that month will be this year.

But that’s not true with stocks. They move too widely above and below their averages in most years, and in most subsets of years, for those numbers to be used to predict where they’re heading.

Ken Fisher of money manager Fisher Investments says “Sell in May” is “garbage” precisely for this reason. He gives the example of September, which has dropped an average 0.72 percent since 1926. But the month has had many big up and down moves over 85 years. He says if you remove just two of the worst Septembers, stocks break even for the month.

“The average is made up of extremes,” says Fisher, who devotes a chapter skewering “Sell in May” in “Debunkery,” his book on investing myths. “If you steer by averages, you’re going to get thrown off.”

Source:  Why ‘Sell In May’ Doesn’t Work, Huffington Post

However a recent chart post in Canada’s Maclean’s magazine shows that the strategy does work based on investment returns in the Dow Jones Industrials Average:

Click to enlarge

Source: ‘Sell in May then go away.’ It really works, Maclean’s

While traders may follow this concept most investors can ignore it. It would be foolish for an investor to liquidate the entire portfolio in May and then buy back the same stocks later. Some of the issues that such investors should be aware of include taxes on any capital gains realized, losing out on dividends when stocks are not held, losing the “Qualified” dividends status, trading costs, etc.

The answer to my title question is “Sell in May and go away” may work for traders but not investors. This is especially true for long-term investors who are not swayed by the short-term gyrations of the market.

Related ETFs:

• SPDR S&P 500 ETF (SPY)
• SPDR S&P Dividend ETF (SDY)
• Vanguard Mid-Cap ETF (VO)
• iShares S&P MidCap 400 Index Fund (IJH)

Disclosure: No Positions

Click to enlarge

Source: Bloomberg BusinessWeek

It is interesting that the tiny city state of Singapore appears in the above list. Though the country does not any natural resources that China needs, it is a major manufacturing center for electronic goods. It is also a main trading hub due its port and location.

5-Year Return:

Click to enlarge

Long-term Return:

Source: Yahoo Finance

1.Company: DBS Group Holdings Ltd (DBSDY)
Current Dividend Yield: 3.17%
Market Cap: $34.7 B

2.Company: United Overseas Bank Ltd (UOVEY)
Current Dividend Yield: 3.20%
Market Cap: $27.9 B

While recently DBS has performed well, in the long run United Overseas has performed better.

Disclosure: No Positions

Country Rank	Company	Global Rank	City	Revenues($ millions)
1	BP	4	London	386,463
2	HSBC Holdings	53	London	110,141
3	Tesco	59	Cheshunt	103,839
4	Vodafone Group	105	Newbury	74,051
5	Barclays	121	London	68,950
6	Lloyds Banking Group	131	London	67,048
7	Royal Bank of Scotland Group	143	Edinburgh	62,798
8	Aviva	148	London	61,754
9	Rio Tinto Group	153	London	60,537
10	Prudential	162	London	58,527
11	SSE	189	Perth	50,611
12	GlaxoSmithKline	231	Brentford	43,907
13	Centrica	288	Windsor	36,860
14	J. Sainsbury	302	London	35,567
15	AstraZeneca	331	London	33,591
16	BT Group	358	London	30,734
17	Anglo American	360	London	30,580
18	Legal & General Group	373	London	29,366
19	BAE Systems	386	London	28,624
20	Wm. Morrison Supermarkets	392	Bradford	28,276
21	Compass Group	432	Chertsey	25,418
22	British American Tobacco	445	London	24,688
23	Standard Chartered Group	448	London	24,488
24	Imperial Tobacco Group	452	Bristol	24,379
25	International Airlines Group	494	Hounslow	22,390
26	National Grid	499	London	22,067

Source: Fortune Global 500, Fortune

Related ETF:

iShares MSCI United Kingdom ETF  (EWU)

Disclosure: No Positions

The following table shows the full Fortune 500 list for 2013:

Rank	Company	Revenues (in $ billion)	Profits (in $million)
1	Wal-Mart Stores	469.2	16,999
2	Exxon Mobil	449.9	44,880
3	Chevron	233.9	26,179
4	Phillips	66169.6	4,124
5	Berkshire Hathaway	162.5	14,824
6	Apple	156.5	41,733
7	General Motors	152.3	6,188
8	General Electric	146.9	13,641
9	Valero Energy	138.3	2,083
10	Ford Motor	134.3	5,665
11	AT&T	127.4	7,264
12	Fannie Mae	127.2	17,220
13	CVS Caremark	123.1	3,876.90
14	McKesson	122.7	1,403
15	Hewlett-Packard	120.4	-12,650
16	Verizon Communications	115.8	875
17	UnitedHealth Group	110.6	5,526
18	J.P. Morgan Chase & Co.	108.2	21,284
19	Cardinal Health	107.6	1,069
20	International Business Machines	104.5	16,604
21	Bank of America Corp.	100.1	4,188
22	Costco Wholesale	99.1	1,709
23	Kroger	96.8	1,496.50
24	Express Scripts Holding	94.4	1,312.90
25	Wells Fargo	91.2	18,897
26	Citigroup	90.8	7,541
27	Archer Daniels Midland	89	1,223
28	Procter & Gamble	85.1	10,756
29	Prudential Financial	84.8	469
30	Boeing	81.7	3,900
31	Freddie Mac	80.6	10,982
32	AmerisourceBergen	79.7	719
33	Marathon Petroleum	76.8	3,389
34	Home Depot	74.8	4,535
35	Microsoft	73.7	16,978
36	Target	73.3	2,999
37	Walgreen	71.6	2,127
38	American International Group	70.1	3,438
39	INTL FCStone	69.3	15
40	MetLife	68.2	1,324
41	Johnson & Johnson	67.2	10,853
42	Caterpillar	65.9	5,681
43	PepsiCo	65.5	6,178
44	State Farm Insurance Cos.	65.3	3,159.20
45	ConocoPhillips	63.4	8,428
46	Comcast	62.6	6,203
47	WellPoint	61.7	2,655.50
48	Pfizer	61.2	14,570
49	Amazon.com	61.1	-39
50	United Technologies	59.8	5,130
51	Dell	56.9	2,372
52	Dow Chemical	56.8	1,182
53	United Parcel Service	54.1	807
54	Intel	53.3	11,005
55	Google	52.2	10,737
56	Lowes	50.5	1,959
57	Coca-Cola	48	9,019
58	Merck	47.3	6,168
59	Lockheed Martin	47.2	2,745
60	Cisco Systems	46.1	8,041
61	Best Buy	45.1	-441
62	Safeway	44.2	596.5
63	FedEx	42.7	2,032
64	Enterprise Products Partners	42.6	2,419.90
65	Sysco	42.4	1,121.60
66	Walt Disney	42.3	5,682
67	Johnson Controls	42	1,226
68	Goldman Sachs Group	41.7	7,475
69	CHS	40.6	1,260.60
70	Abbott Laboratories	39.9	5,962.90
71	Sears Holdings	39.9	-930
72	DuPont	39.5	2,788
73	Humana	39.1	1,222
74	World Fuel Services	38.9	189.3
75	Hess	38.4	2,025
76	Ingram Micro	37.8	305.9
77	Plains All American Pipeline	37.8	1,094
78	Honeywell International	37.7	2,926
79	United Continental Holdings	37.2	-723
80	Oracle	37.1	9,981
81	Liberty Mutual Insurance Group	36.9	829
82	HCA Holdings	36.8	1,605
83	Delta Air Lines	36.7	1,009
84	Aetna	36.6	1,657.90
85	Deere	36.2	3,064.70
86	Supervalu	36.1	-1,040
87	Sprint Nextel	35.3	-4,326
88	Mondelez International	35	3,028
89	New York Life Insurance	34.3	1,333.20
90	American Express	33.8	4,482
91	News Corp.	33.7	1,179
92	Allstate	33.3	2,306
93	Tyson Foods	33.3	583
94	Massachusetts Mutual Life Insurance	32.9	1,114.60
95	Tesoro	32.5	743
96	Morgan Stanley	32.4	68
97	TIAA-CREF	32.2	2,060
98	General Dynamics	31.5	-332
99	Philip Morris International	31.4	8,800
100	Nationwide	30.4	748.5
101	3M	29.9	4,444
102	DirecTV	29.7	2,949
103	Cigna	29.1	1,623
104	Murphy Oil	28.8	970.9
105	Time Warner	28.7	3,019
106	Halliburton	28.5	2,635
107	International Paper	27.8	794
108	Publix Super Markets	27.7	1,552.30
109	Macys	27.7	1,335
110	Fluor	27.6	456.3
111	McDonalds	27.6	5,464.80
112	Hartford Financial Services Group	26.4	-38
113	Rite Aid	26.1	-368.6
114	Northwestern Mutual	26	783
115	TJX	25.9	1,906.70
116	Travelers Cos.	25.7	2,473
117	Avnet	25.7	567
118	Aflac	25.4	2,866
119	Tech Data	25.4	214.6
120	Northrop Grumman	25.2	1,978
121	AMR	24.9	-1,876
122	Staples	24.7	-210.7
123	Emerson Electric	24.5	1,968
124	Raytheon	24.4	1,888
125	Occidental Petroleum	24.3	4,598
126	Nike	24.1	2,223
127	Capital One Financial	23.8	3,517
128	Alcoa	23.7	191
129	Exelon	23.5	1,160
130	Eli Lilly	22.6	4,088.60
131	Xerox	22.4	1,195
132	U.S. Bancorp	22.2	5,647
133	EMC	21.7	2,732.60
134	Time Warner Cable	21.4	2,155
135	Baker Hughes	21.4	1,311
136	Kimberly-Clark	21.1	1,750
137	Goodyear Tire & Rubber	21	212
138	Union Pacific	20.9	3,943
139	United Services Automobile Assn.	20.7	2,832.30
140	ManpowerGroup	20.7	197.6
141	Arrow Electronics	20.4	506.3
142	PBF Energy	20.1	2
143	HollyFrontier	20.1	1,727.20
144	National Oilwell Varco	20	2,491
145	Duke Energy	19.6	1,768
146	Nucor	19.4	504.6
147	United States Steel	19.3	-124
148	Kohls	19.3	986
149	Qualcomm	19.1	6,109
150	CenturyLink	18.4	777
151	Kraft Foods Group	18.3	1,642
152	Danaher	18.3	2,392.20
153	AES	18.2	-912
154	Whirlpool	18.1	401
155	Illinois Tool Works	18.1	2,870
156	Freeport-McMoRan Copper & Gold	18	3,041
157	Global Partners	17.6	45.5
158	Bristol-Myers Squibb	17.6	1,960
159	Altria Group	17.5	4,180
160	Cummins	17.3	1,645
161	Energy Transfer Equity	17.3	302
162	Amgen	17.3	4,345
163	Jabil Circuit	17.2	394.7
164	Southwest Airlines	17.1	421
165	Colgate-Palmolive	17.1	2,472
166	Progressive	17.1	902.3
167	Apache	17.1	2,001
168	Paccar	17.1	1,111.60
169	General Mills	16.7	1,567.30
170	PNC Financial Services Group	16.6	3,013
171	Southern	16.5	2,350
172	Medtronic	16.5	3,617
173	TRW Automotive Holdings	16.4	1,008
174	Marathon Oil	16.2	1,582
175	Dollar General	16	952.7
176	Computer Sciences	15.9	-4,242
177	AutoNation	15.7	316.4
178	Icahn Enterprises	15.7	379
179	Gap	15.7	1,135
180	Bank of New York Mellon Corp.	15.5	2,445
181	FirstEnergy	15.3	770
182	PPG Industries	15.2	941
183	PG&E Corp.	15	816
184	Community Health Systems	15	265.6
185	American Electric Power	14.9	1,259
186	CBS	14.7	1,574
187	Lear	14.6	1,282.80
188	Loews	14.6	568
189	DISH Network	14.3	636.7
190	NextEra Energy	14.3	1,911
191	Omnicom Group	14.2	998.3
192	Kellogg	14.2	961
193	Baxter International	14.2	2,326
194	Land OLakes	14.1	240.4
195	Coventry Health Care	14.1	487.1
196	eBay	14.1	2,609
197	L-3 Communications	14.1	810
198	Viacom	13.9	1,981
199	US Airways Group	13.8	637
200	Waste Management	13.6	817
201	Yum Brands	13.6	1,597
202	Chubb	13.6	1,545
203	Penske Automotive Group	13.6	185.5
204	Toys R Us	13.5	38
205	Aramark	13.5	138.2
206	Monsanto	13.5	2,045
207	Anadarko Petroleum	13.4	2,391
208	Starbucks	13.3	1,383.80
209	ConAgra Foods	13.3	467.9
210	Dominion Resources	13.2	302
211	Parker-Hannifin	13.1	1,151.80
212	Edison International	13.1	-183
213	Smithfield Foods	13.1	361.3
214	Genuine Parts	13	648
215	J.C. Penney	13	-985
216	Navistar International	12.9	-3,010
217	Dean Foods	12.9	158.6
218	Texas Instruments	12.8	1,759
219	Oneok	12.7	360.6
220	Thermo Fisher Scientific	12.7	1,177.90
221	Ally Financial	12.6	1,196
222	Western Digital	12.5	1,612
223	Chesapeake Energy	12.3	-769
224	PPL	12.3	1,526
225	Textron	12.2	589
226	Consolidated Edison	12.2	1,138
227	Nordstrom	12.1	735
228	Marsh & McLennan	11.9	1,176
229	Ecolab	11.8	703.6
230	Marriott International	11.8	571
231	CSX	11.8	1,859
232	Whole Foods Market	11.7	465.6
233	EOG Resources	11.7	570.3
234	H.J. Heinz	11.6	923.2
235	Lincoln National	11.5	1,313
236	Health Net	11.5	122.1
237	C.H. Robinson Worldwide	11.4	593.8
238	Guardian Life Ins. Co. of America	11.3	265.8
239	SunTrust Banks	11.2	1,958
240	SAIC	11.2	525
241	Huntsman	11.2	363
241	Praxair	11.2	1,692
243	Peter Kiewit Sons'	11.2	290
244	Las Vegas Sands	11.1	1,524.10
245	Stanley Black & Decker	11.1	883.8
246	Mosaic	11.1	1,930.20
247	Norfolk Southern	11	1,749
248	URS	11	310.6
249	Jacobs Engineering Group	10.9	379
250	VF	10.9	1,086
251	BB&T Corp.	10.7	1,979
252	Avon Products	10.7	-42.5
253	Office Depot	10.7	-77.1
254	First Data	10.7	-700.9
255	Automatic Data Processing	10.7	1,388.50
256	Liberty Global	10.6	322.8
257	Unum Group	10.5	894.4
258	L Brands	10.5	753
259	CarMax	10.5	413.8
260	Visa	10.4	2,144
261	Entergy	10.3	846.7
262	Synnex	10.3	151.4
263	Ameriprise Financial	10.3	1,029
264	R.R. Donnelley & Sons	10.2	-651.4
265	Kinder Morgan	10.2	315
266	Xcel Energy	10.1	905.2
267	CDW	10.1	119
268	State Street Corp.	10.1	2,061
269	Tenet Healthcare	10.1	152
270	Liberty Interactive	10.1	1,530
271	Genworth Financial	10	323
272	AGCO	10	522.1
273	Air Products & Chemicals	9.9	1,167.30
274	Newmont Mining	9.9	1,809
275	Reinsurance Group of America	9.8	631.9
276	Public Service Enterprise Group	9.8	1,275
277	KKR	9.7	560.8
278	Ross Stores	9.7	786.8
279	Estée Lauder	9.7	856.9
280	Gilead Sciences	9.7	2,591.60
281	Sempra Energy	9.6	859
282	Sherwin-Williams	9.5	631
283	Western Refining	9.5	398.9
284	Devon Energy	9.5	-206
285	Bed Bath & Beyond	9.5	989.5
286	BlackRock	9.3	2,458
287	Family Dollar Stores	9.3	422.2
288	Hillshire Brands	9.3	845
289	Leucadia National	9.3	854.5
290	Principal Financial	9.2	805.9
291	Rock-Tenn	9.2	249.1
292	MGM Resorts International	9.2	-1,767.70
293	Hertz Global Holdings	9	243.1
294	Discover Financial Services	9	2,345
295	W.W. Grainger	9	689.9
296	Henry Schein	8.9	388.1
297	Owens & Minor	8.9	109
298	GameStop	8.9	-269.7
299	DTE Energy	8.8	610
300	Caesars Entertainment	8.8	-1,497.50
301	Ball	8.7	403.5
302	Applied Materials	8.7	109
303	Centene	8.7	1.9
304	Motorola Solutions	8.7	881
305	Stryker	8.7	1,298
306	AutoZone	8.6	930.4
307	Sonic Automotive	8.5	89.1
308	Dover	8.5	811.1
309	Assurant	8.5	483.7
310	Cameron International	8.5	750.5
311	DaVita HealthCare Partners	8.5	536
312	Crown Holdings	8.5	557
313	Reliance Steel & Aluminum	8.4	403.5
314	NRG Energy	8.4	559
315	Peabody Energy	8.3	-585.7
316	Reynolds American	8.3	1,272
317	Autoliv	8.3	483.1
318	Micron Technology	8.2	-1,032
319	Hormel Foods	8.2	500.1
320	AECOM Technology	8.2	-58.6
321	Ashland	8.2	26
322	Oshkosh	8.2	230.8
323	Republic Services	8.1	571.8
324	Eastman Chemical	8.1	437
325	Thrivent Financial for Lutherans	8	487.6
326	Corning	8	1,728
327	Broadcom	8	719
328	Darden Restaurants	8	475.5
329	TravelCenters of America	8	32.2
330	HD Supply	8	-639
331	Spectrum Group International	8	4.1
332	Becton Dickinson	7.9	1,169.90
333	Sealed Air	7.9	-1,410.30
334	KBR	7.9	144
335	Commercial Metals	7.9	207.5
336	Masco	7.8	-114
337	Universal Health Services	7.8	443.4
338	Campbell Soup	7.7	774
339	Coca-Cola Enterprises	7.6	677
340	Charter Communications	7.5	-304
341	Quest Diagnostics	7.5	555.7
342	Williams	7.5	859
343	Group 1 Automotive	7.5	100.2
344	CenterPoint Energy	7.5	417
345	WellCare Health Plans	7.4	184.7
346	Dollar Tree	7.4	619.3
347	Pantry	7.4	-2.5
348	MasterCard	7.4	2,759
349	Tenneco	7.4	275
350	Avis Budget Group	7.4	290
351	Terex	7.3	105.8
352	Cognizant Technology Solutions	7.3	1,051.30
353	Fidelity National Financial	7.3	606.5
354	Steel Dynamics	7.3	163.6
355	Precision Castparts	7.3	1,224.10
356	Dana Holding	7.3	300
357	Boston Scientific	7.2	-4,068
358	BorgWarner	7.2	500.9
359	Visteon	7.2	100
360	Barnes & Noble	7.1	-68.9
361	Fifth Third Bancorp	7.1	1,576
362	Franklin Resources	7.1	1,931.40
363	Weyerhaeuser	7.1	385
364	Owens-Illinois	7	184
365	Alpha Natural Resources	7	-2,437.10
366	Interpublic Group	7	446.7
367	OfficeMax	6.9	416.8
368	Core-Mark Holding	6.9	33.9
369	Pacific Life	6.9	460
370	Ralph Lauren	6.9	681
371	Agilent Technologies	6.9	1,153
372	Dole Food	6.8	-144.5
373	Ameren	6.8	-974
374	Mylan	6.8	640.9
375	Avery Dennison	6.8	215.4
376	Health Management Associates	6.8	164.3
377	PetSmart	6.8	389.5
378	Dillards	6.8	336
379	Symantec	6.7	1,172
380	Huntington Ingalls Industries	6.7	146
381	Enbridge Energy Partners	6.7	493.1
382	Cablevision Systems	6.7	233.5
383	Jarden	6.7	243.9
384	Hershey	6.6	660.9
385	WESCO International	6.6	201.8
386	Ingredion	6.5	427.5
387	CBRE Group	6.5	315.6
388	UGI	6.5	199.4
389	NuStar Energy	6.5	-226.6
390	McGraw-Hill	6.5	437
391	Vanguard Health Systems	6.5	57.3
392	Casey's General Stores	6.5	116.8
393	American Family Insurance Group	6.5	360.5
394	Mutual of Omaha Insurance	6.4	283.8
395	Mattel	6.4	776.5
396	Celanese	6.4	605
397	Quanta Services	6.4	306.6
398	Level 3 Communications	6.4	-422
399	EMCOR Group	6.3	146.6
400	Starwood Hotels & Resorts	6.3	562
401	Regions Financial	6.3	1,120
402	Northeast Utilities	6.3	525.9
403	Rockwell Automation	6.3	737
404	Ryder System	6.3	210
405	Anixter International	6.3	124.8
406	CMS Energy	6.3	382
407	CC Media Holdings	6.2	-424.5
408	NetApp	6.2	605.4
409	Advance Auto Parts	6.2	387.7
410	Kindred Healthcare	6.2	-40.4
411	Seaboard	6.2	282.3
412	OReilly Automotive	6.2	585.7
413	Foot Locker	6.2	397
414	Windstream	6.2	168
415	CH2M Hill	6.2	93
416	Omnicare	6.2	194.9
417	FMC Technologies	6.2	430
418	SLM	6.1	939
419	CF Industries Holdings	6.1	1,848.70
420	Sanmina	6.1	180.2
421	NII Holdings	6.1	-765.2
422	PVH	6	433.8
423	Molina Healthcare	6	9.8
424	Cliffs Natural Resources	6	-899.4
425	General Cable	6	4
426	Shaw Group	6	198.9
427	Dr Pepper Snapple Group	6	629
428	Expeditors International of Washington	6	333.4
429	Harris	6	30.6
430	AK Steel Holding	5.9	-1,027.30
431	SPX	5.9	259.2
432	Actavis	5.9	97.3
433	Newell Rubbermaid	5.9	401.3
434	Fidelity National Information Services	5.9	461.2
435	Targa Resources	5.9	38.1
436	Booz Allen Hamilton Holding	5.9	240
437	Dicks Sporting Goods	5.8	290.7
438	W.R. Berkley	5.8	510.6
439	Live Nation Entertainment	5.8	-163.2
440	Allergan	5.8	1,098.80
441	NCR	5.8	146
442	Mohawk Industries	5.8	250.3
443	Auto-Owners Insurance	5.7	435.6
444	Laboratory Corp. of America	5.7	583.1
445	Western Union	5.7	1,025.90
446	Joy Global	5.7	762
447	Energy Future Holdings	5.6	-3,360
448	MeadWestvaco	5.6	205
449	Harley-Davidson	5.6	623.9
450	Con-way	5.6	104.5
451	MRC Global	5.6	118
452	J.M. Smucker	5.5	459.7
453	Exelis	5.5	330
454	Biogen Idec	5.5	1,380
455	Erie Insurance Group	5.5	160
456	Celgene	5.5	1,456.20
457	St. Jude Medical	5.5	752
458	Domtar	5.5	172
459	Calpine	5.5	199
460	Susser Holdings	5.5	46.7
461	Clorox	5.5	541
462	Kelly Services	5.5	50.1
463	Consol Energy	5.4	388.5
464	Advanced Micro Devices	5.4	-1,183
465	Graybar Electric	5.4	86.3
466	Big Lots	5.4	177.1
467	Gannett	5.4	424.3
468	Telephone & Data Systems	5.3	81.9
469	Host Hotels & Resorts	5.3	61
470	Insight Enterprises	5.3	92.8
471	Western & Southern Financial Group	5.3	137.7
472	Andersons	5.3	79.5
473	Priceline.com	5.3	1,419.60
474	United Natural Foods	5.2	91.3
475	Spectra Energy	5.2	940
476	Owens Corning	5.2	-19
477	Avaya	5.2	-344
47	8Wynn Resorts	5.2	502
479	Bemis	5.1	173.8
480	NiSource	5.1	416.1
481	MetroPCS Communications	5.1	394.2
482	Facebook	5.1	53
483	Pepco Holdings	5.1	285
484	United Stationers	5.1	111.8
485	American Financial Group	5.1	488
486	J.B. Hunt Transport Services	5.1	310.4
487	SanDisk	5.1	417.4
488	Charles Schwab	5	928
489	Pitney Bowes	5	445.2
490	Allegheny Technologies	5	158.4
491	Jones Financial	5	555
492	Frontier Communications	5	136.6
493	Timken	5	495.5
494	Yahoo	5	3,945.50
495	JetBlue Airways	5	128
496	Old Republic International	5	-68.6
497	Simon Property Group	4.9	1,434.50
498	YRC Worldwide	4.9	-140.4
499	CA	4.8	951
500	Nash-Finch	4.8	-93.9

Source: Fortune

Download:

The entire list can be downloaded in Excel format by clicking here.

A few observations:

• The revenues of Wal-Mart and Exxon Mobil is almost double that of the third ranked firm Chevron.
• Apple’s (APPL) revenue was high enough to earn it the 6th position.
• Not all Fortune 500 firms are worth investing in. For example, Best Buy(BBY) stock collapsed with a negative total return of about 47% in 2012.
• For years, equity investments in tech giants like Microsoft(MSFT), Cisco(CSCO), Intel (INTC), etc. have been “dead money”.

To download the Fortune 500 lists from 2013 to 1955 in Excel go here.

Disclosure: No Positions

1.Company: Bank of Ireland (IRE)
Current Dividend Yield: N/A
YTD Change: 49.08%
Country: Ireland

2.Company: Sumitomo Mitsui Financial (SMFG)
Current Dividend Yield: 2.66%
YTD Change: 26.70%
Country: Japan

3.Company: Mitsubishi UFJ Financial (MTU)
Current Dividend Yield: 2.21%
YTD Change: 23.62%
Country: Japan

4.Company: Credit Suisse (CS)
Current Dividend Yield: 0.36%
YTD Change:21.46%
Country: Switzerland

5.Company: Westpac Banking (WBK)
Current Dividend Yield: 5.63%
YTD Change: 19.80%
Country: Australia

The Five Worst-Perfroming Exchange-listed Foreign Bank Stocks YTD are listed below:

1.Company: Royal Bank of Scotland (RBS)
Current Dividend Yield: N/A
YTD Change: -14.09%
Country: UK

2.Company: Banco Macro (BMA)
Current Dividend Yield: N/A
YTD Change: -17.14%
Country: Argentina

3.Company: Grupo Financiero Galicia (GGAL)
Current Dividend Yield: N/A
YTD Change: -17.37%
Country: Argentina

4.Company: BBVA Banco Frances (BFR)
Current Dividend Yield: N/A
YTD Change: -17.50%
Country: Argentina

5.Company: National Bank of Greece (NBG)
Current Dividend Yield: N/A
YTD Change: -26.82%
Country: Greece

Source: BNY Mellon

Note: Dividend yields noted are as of May 10, 2013. Data is known to be accurate from sources used.Please use your own due diligence before making any investment decisions.

Disclosure: Long BMA

It should be noted however high-school education is still free and publicly-funded. Only when a student tries to get into college tuition becomes mandatory no whatever which college they go to. Not all the students are born geniuses to get a scholarship or skip college altogether and start their own business. In fact,  a recent article in Bloomberg discussed how colleges soak poor students to offer aid to rich students.

Much of the soaring college tuition can be attributed to the   government involvement in offering cheap and easy student levels. While the idea has noble intentions, in reality schools have figured out how to milk the system and dump as much as debt possible on unsuspecting students and their parents. Hence the little “angles” who run thousands of universities and colleges across the country as able to spend lavishly on everything mentioned above by increasing the tuition year-after-year like clockwork. Since students take out loans to pay tuition and not pay from their own pocket it seems like free money to them until they graduate.

I posted the following chart late last year showing how college tuition has been increasing relative to  other expense categories of a typical American:

Source: Bloomberg BusinessWeek

As college tuition increases the outstanding student loans continue to rise as well as shown in the chart below:

Click to enlarge

Apparently the Federal government is considering a plan to help students with their student loans according to a recent piece in The Wall Street Journal. From the article:

The White House proposes that the government forgive billions of dollars in student debt over the next decade, a plan that cheers student advocates, but critics say it would expand a program that already encourages students to borrow too much and stick taxpayers with the bill.

The proposal, included in President Barack Obama‘s budget for next year, would increase the number of borrowers eligible for a program known casually as income-based repayment, which aims to help low-income workers stay current on federal student debt.

Borrowers in the program make monthly payments equivalent to 10% of their income after taxes and basic living expenses, regardless of how much they owe. After 20 years of on-time payments—10 years for those who work in public or nonprofit jobs—the balance is forgiven.

Under the program, most borrowers with loans issued since October 2007 are eligible to participate. The budget proposal—which requires congressional approval—would let all borrowers with pre-2007 loans participate and would make tax exempt any debt forgiven through the program. (Loan forgiveness can be considered taxable income.)

Source:  Cutting Down Student Debt, The Wall Street Journal, May 10, 2013

The article noted that one student raked up  $300,000 in student loans to get a law degree. One thing that shocked me was that student loans seem to be an easy option Uncle Sam offers to students to use for all kinds of living expenses, even to fund a luxurious lifestyle such as spending on home improvements. This particular student apparently took “emergency student loans” to spend on home repairs, unexpected medical costs, health-insurance bills, etc. While spending on medical expenses is understandable it is not clear how student loans can be used to make home improvements. It appears that this Federal student program is riddled with plenty of loopholes. Obviously wise students are taking advantage of it while the going is good.

A recent article in Fidelity Viewpoints discussed about the Chinese economy’s transition from investment-led to consumption-driven and some emerging market consumer stock picks. From the article:

In 2000, China produced about 10 million tons of steel each month. Last year, that number had grown to more that 60 million tons—a six-fold increase in a little more than a decade. The growth was dramatic, but it was also just one small example of how infrastructure construction drove demand for raw materials and helped shape the investment landscape in emerging markets during the last decade.

But a massive shift is underway in China that could change that investment calculus. With many of the highways, skyscrapers, and ports now built, China is trying to navigate a shift from an infrastructure-led economy to a consumer-driven one. Add to that rising wages, and emerging-market investors may benefit by shifting focus from commodities to consumers.

Source:  Can consumer stocks lead?, Fidelity Viewpoints, 5/8/13

As China moves to a consumption-based economy with much of the basic infrastructure already built the demand for commodities will decline. The Fidelity article noted that energy and materials make up more than 23% of the MSCI Emerging Markets Index. However these two sectors have been laggards in recent years relative to consumer staples and consumer discretionary sectors as shown in the chart below:

Click to enlarge

Some of the ways to profit from the growth in emerging market consumer sector are: invest directly in domestic companies operating in the sector, invest in Western multinationals which have a big presence in these countries with popular brands, invest via ETFs that focus on this sector, etc. For investors who prefer to invest via individual stocks, the best option is go with developed stocks with high exposure to emerging markets. This way investors can avoid issues related to emerging companies such as accounting, lack of transparency, government ownership and control, majority ownership by powerful dynastic families all too common in these countries, etc.

Ten Western multinationals with high exposure to emerging market consumer sector are listed below for consideration:

1.Company: Nestle SA (NSRGY)
Current Dividend Yield: 3.12%
Sector: Food Products
Country: Switzerland

2.Company: Unilever PLC (UL)
Current Dividend Yield: 3.02%
Sector: Food Products
Country: UK

3.Company:Colgate-Palmolive Co (CL)
Current Dividend Yield: 2.25%
Sector: Household Products
Country: USA

4.Company:Procter & Gamble Co (PG)
Current Dividend Yield: 3.05%
Sector: Household Products
Country: USA

5.Company: British American Tobacco PLC (BTI)
Current Dividend Yield: 3.70%
Sector:Tobacco
Country: UK

6.Company: adidas AG (ADDYY)
Current Dividend Yield: 1.63%
Sector:Textiles, Apparel & Luxury Goods
Country: Germany

7.Company: The Coca-Cola Co (KO)
Current Dividend Yield: 2.66%
Sector:Beverages
Country: USA

8.Company: Henkel AG & Co KGaA (HENKY)
Current Dividend Yield: 1.48%
Sector: Household Products
Country: Germany

9.Company: Heineken NV (HEINY)
Current Dividend Yield:
Sector:Beverages
Country: The Netherlands

10.Company:SABMiller PLC (SABMY)
Current Dividend Yield: 0.81%
Sector:Beverages
Country: UK

Related ETFs:

• iShares MSCI Emerging Markets ETF (EEM)
• Vanguard MSCI Emerging Markets ETF (VWO)

Note: Dividend yields noted are as of May 10, 2013. Data is known to be accurate from sources used.Please use your own due diligence before making any investment decisions

Disclosure: Long HENKY

Country Rank	Company	Global Rank	City	Revenues($ millions)
1	Toyota Motor	10	Toyota	235,364
2	Japan Post Holdings	13	Tokyo	211,019
3	Nippon Telegraph & Telephone	29	Tokyo	133,077
4	Hitachi	38	Tokyo	122,419
5	JX Holdings	41	Tokyo	119,258
6	Nissan Motor	42	Yokohama	119,166
7	Honda Motor	64	Tokyo	100,664
8	Panasonic	66	Osaka	99,373
9	Nippon Life Insurance	74	Osaka	90,783
10	Sony	87	Tokyo	82,237
11	Meiji Yasuda Life Insurance	96	Tokyo	77,463
12	Toshiba	97	Tokyo	77,261
13	Mitsubishi	115	Tokyo	70,492
14	Tokyo Electric Power	127	Tokyo	67,751
15	Mitsui	132	Tokyo	66,512
16	AEON	134	Chiba	65,989
17	Mitsubishi UFJ Financial Group	144	Tokyo	62,706
18	Dai-ichi Life Insurance	145	Tokyo	62,462
19	Seven & I Holdings	151	Tokyo	60,668
20	Fujitsu	166	Tokyo	56,582
21	Marubeni	168	Tokyo	55,604
22	Itochu	172	Osaka	54,093
23	Nippon Steel	180	Tokyo	51,812
24	Sumitomo Mitsui Financial Group	191	Tokyo	49,967
25	Idemitsu Kosan	199	Tokyo	48,828
26	MS&AD Insurance Group Holdings	209	Tokyo	47,684
27	Mitsubishi Electric	214	Tokyo	46,094
28	KDDI	220	Tokyo	45,241
29	Canon	224	Tokyo	44,631
30	Tokio Marine Holdings	236	Tokyo	43,264
31	Sumitomo Life Insurance	239	Osaka	43,086
32	Sumitomo	247	Tokyo	41,301
33	Mitsubishi Chemical Holdings	252	Tokyo	40,632
34	Softbank	253	Tokyo	40,559
35	JFE Holdings	256	Tokyo	40,104
36	Denso	259	Kariya	39,954
37	NEC	271	Tokyo	38,462
38	Bridgestone	276	Tokyo	37,943
39	Mitsubishi Heavy Industries	299	Tokyo	35,727
40	Kansai Electric Power	301	Osaka	35,607
41	NKSJ Holdings	306	Tokyo	35,343
42	Medipal Holdings	310	Tokyo	34,832
43	Mizuho Financial Group	316	Tokyo	34,394
44	Cosmo Oil	329	Tokyo	33,672
45	East Japan Railway	347	Tokyo	32,070
46	Suzuki Motor	350	Hamamatsu	31,817
47	Sharp	354	Osaka	31,104
48	Chubu Electric Power	356	Nagoya	31,020
49	Alfresa Holdings	371	Tokyo	29,551
50	Aisin Seiki	379	Kariya	29,183
51	Showa Shell Sekiyu	389	Tokyo	28,497
52	Fujifilm Holdings	400	Tokyo	27,804
53	T&D Holdings	413	Tokyo	26,649
54	Maruhan	418	Kyoto	26,333
55	Sumitomo Electric Industries	422	Osaka	26,082
56	Japan Tobacco	427	Tokyo	25,759
57	Mazda Motor	428	Hiroshima	25,749
58	Komatsu	436	Tokyo	25,099
59	Sumitomo Chemical	446	Tokyo	24,670
60	Ricoh	461	Tokyo	24,108
61	Kobe Steel	467	Kobe	23,617
62	Suzuken	469	Nagoya	23,556
63	Nomura Holdings	471	Tokyo	23,453
64	Daiwa House Industry	472	Osaka	23,415
65	Yamada Denki	477	Takasaki	23,246
66	Nippon Yusen Kabushiki Kaisha	481	Tokyo	22,896
67	Mitsubishi Motors	482	Tokyo	22,890
68	Tokyo Gas	496	Tokyo	22,218

Source: Fortune Global 500, Fortune

Related ETF:

iShares MSCI Japan Index ETF (EWJ)

Disclosure: No Positions

Shares of the 64 companies that compose the Ibovespa index are trading at roughly 11 times earnings, compared with a price/earnings ratio of about nine at the start of 2012.

Some investors point out that the poor performance of Brazil’s main stock index masks healthy demand for exposure to specific sectors, namely retailing and financial services. Even with slow growth, Brazil’s unemployment rate is near a record low and salaries have surged in past months.

The following three charts shows some of the positive factors of the Brazilian economy:

Click to enlarge

Source: Economic Chart Pack, April 2013, Banco Central Do Brasil.

In short, a strong case be made for Brazil based on the factors such as the three shown above. The manufacturing sector of the economy recently had the highest ever domestic auto production showing the demand for local sales and rising exports.

Ten Brazilian companies trading on the US markets are listed below for consideration:

1.Company: Itau Unibanco Holding SA (ITUB)
Current Dividend Yield: 3.29%
Sector: Banking

2.Company: SABESP (SBS)
Current Dividend Yield:  2.27%
Sector: Water Utilities

3.Company: Banco Bradesco SA (BBD)
Current Dividend Yield: 3.04%
Sector: Banking

4.Company: Ultrapar Participacoes SA (UGP)
Current Dividend Yield:  2.18%
Sector: Oil, Gas & Consumable Fuels

5.Company: Embraer SA (ERJ)
Current Dividend Yield: 1.16%
Sector: Aerospace & Defense

6.Company: Braskem SA (BAK)
Current Dividend Yield: 3.35%
Sector: Chemicals

7.Company: Light SA (LGSXY)
Current Dividend Yield: 14.48%
Sector: Electric Utilities

8.Company: Banco do Brasil SA (BDORY)
Current Dividend Yield: 6.66%
Sector: Banking

9.Company: Companhia Energetica de Minas Gerais Cemig (CIG)
Current Dividend Yield: 11.40%
Sector: Electric Utilities

10.Company: Cielo SA (CIOXY)
Current Dividend Yield: 3.61%
Sector: IT Services

Note: Dividend yields noted are as of May 8, 2013. Data is known to be accurate from sources used.Please use your own due diligence before making any investment decisions.

Disclosure: Long ITUB, BBD

Here is an UBS analyst’s take on Aussie banks:

In a research note titled Welcome to the great bank bubble of 2013 sent on Wednesday, UBS analyst Jonathan Mott said banks were low growth companies, heavily exposed to a housing market downturn and unemployment.

“As with all asset bubbles, they can go higher and for longer than many expect,” Mr Mott said. “As Chuck Prince [former chief executive of Citigroup] famously said ‘As long as the music is playing, you’ve got to get up and dance’. All we can say is buyer beware.”

It was “fundamentally flawed” for investors chasing yield to compare dividends from more risky bank stocks to lower rates on much safer term deposits and government bonds, he said.

The share prices of Australia’s banks have reached a record high at an average of 14.9 times earnings, despite subdued demand for lending.

The market capitalisation of Commonwealth Bank of Australia and Westpac have surpassed $100 billion and the big four are ranked among the world’s top-11 by market capitalisation.

Click to enlarge

Quantitative easing by central banks around the world, where their bond buying has pushed global interest rates down, have led investors to select alternative assets offering higher yields.

Combined with falling term-deposit rates and the tax advantage of franking credits in Australia, investors have jumped into banks because of their track record of producing excellent earnings, high dividends, sound management and prudent regulatory structure. Bad debts remain benign, housing markets stable and the unemployment rate of 5.6 per cent is relatively low although edging up slowly.

Australia is also leveraged to the fastest growing region in the world, Asia.

Source:  Banks enter bubble zone: analysts, Australian Financial Review

Hat Tip:  The great Aussie bank share price bubble, FT Alphaville

Related ETFs and Stocks:

• iShares MSCI Australia EFT (EWA)
• Australia and New Zealand Banking Group Ltd (ANZBY)
• Westpac Banking Corp (WBK)
• National Australia Bank Ltd (NABZY)
• Commonwealth Bank of Australia (CMWAY)

Disclosure: No Positions

Country Rank	Company	Global Rank	City	Revenues($ millions)
1	Manulife Financial	181	Toronto, Ontario	51,548
2	Suncor Energy	255	Calgary, Alberta	40,231
3	Royal Bank of Canada	282	Toronto, Ontario	37,233
4	Power Corp. of Canada	335	Montreal, Quebec	33,277
5	George Weston	338	Toronto, Ontario	32,735
6	Magna International	385	Aurora, Ontario	28,748
7	Toronto-Dominion Bank	403	Toronto, Ontario	27,590
8	Bank of Nova Scotia	409	Toronto, Ontario	27,091
9	Onex	419	Toronto, Ontario	26,168
10	Husky Energy	466	Calgary, Alberta	23,623
11	Sun Life Financial	485	Toronto, Ontario	22,831

Source: Fortune Global 500, Fortune

In this post, let us take a quick look at the performance of Canada and Mexico using the country specific ETF as a proxy for the two equity markets of these countries. In all the three periods shown below, the Mexican ETF easily beat the Canadian fund. Over the five year and long term the difference in returns is substantial.

1. 1-year return of Canada vs. Mexico ETF:

Click to enlarge

2. 5-year return of Canada vs. Mexico ETF:

3. Long-Term return of Canada vs. Mexico ETF:

Source: Yahoo Finance

The iShares MSCI Canada ETF (EWC)  and the Shares MSCI Mexico ETF(EWW) has dividend yields  2.12% and  1.01% respectively.

Disclosure: No Positions

Click to enlarge

Source: Yahoo Finance

The Australian economy is a resource-based economy similar to Canadian and South African economies. The country is called the “The Lucky Country” for the weather, lifestyle and history, it can also be said that the country is lucky due to the vast amount of natural resources available that can be exploited. For example, some of the major commodity exports of Australia are: coal, iron ore, gold, meat, wool, alumina and wheat.

Until last year, the Australia enjoyed 20 years of continued economic growth as a result of the boom in commodity and energy demand from Asia especially China according to CIA’s The World Factbook. During the 20 year period economic growth averaged 3.5% a year. The services sectors accounts for 70% of the economy with the rest split between manufacturing and agricultural sectors.

An economy based on simply digging up stuff from under the ground and selling to other countries has two major risks. First there must be demand for the stuff. Secondly the prices that buyers are willing to pay must be high enough to make a profit. If  the demand declines and/or prices plunge then the economy will adversely impacted. The Australian economy is facing this scenario. The Australian’s economy’s high dependence on China makes it vulnerable to any slowdown in China’s growth.

Though the Australian equity market has been on a upward trend for many years now the chances of a strong correction are high. When corrections do occur they can be very violent. The chart below shows that the FTSE Asfa Australia All-Share Index plunged 50% or more with little prior warning:

Click to enlarge

Source:  Australian exposure: an interesting opportunity?, Gray Issue, April 26, 2013, Allan Gray, South Africa

Hence investors in Australian equities have to be cautious and monitor their investments. However depending on an investor’s profile and goal, a moderate to low exposure to Australia in a well-diversified portfolio would not hurt.

Five Australian stocks trading on the US markets are listed below for further research:

1.Company: Westpac Banking Corp (WBK)
Current Dividend Yield: 4.88%
Sector:Banking

2.Company: Australia and New Zealand Banking Group Ltd (ANZBY)
Current Dividend Yield: 4.72%
Sector:Banking

3.Company: National Australia Bank Ltd (NABZY)
Current Dividend Yield: 5.27%
Sector:Banking

4.Company:Commonwealth Bank of Australia (CMWAY)
Current Dividend Yield: 4.98%
Sector: Banking

5. Company: BHP Billiton Ltd (BHP)
Current Dividend Yield: 3.37%
Sector:Metals & Mining

Note: Dividend yields noted are as of May 3, 2013. Data is known to be accurate from sources used.Please use your own due diligence before making any investment decisions.

The iShares MSCI Australia ETF (EWA) offers a simple and easy to invest in Australian stocks. The fund has total assets of over $2.60 billion and a distribution yield of 5.02%.

Disclosure: No  Positions

In order to fully gain the benefits of diversification it is important to hold a mixture of stocks and bonds of various types. An article by T.Rowe Price quoted an in-house study showed that a well-diversified portfolio easily outperformed a basic portfolio by a significant margin. The basic portfolio held just U.S. large cap stocks and investment-grade bonds.

From the Spring, 2013 edition of T.W.Rowe Price Report:

Over the entire 13-year period, the total annualized return of the more diversified portfolio was 5.1%, compared with just 3.8% for the basic portfolio.

That 1.3-percentage-point annual gap in performance meant that $100,000 invested in each of these portfolios at the start would have grown to $190,609 with the more diversified portfolio, compared with $162,086 for the basic portfolio.

In other words, greater diversity would have translated to a total gain of roughly 46% more than that of the more basic portfolio.

Click to enlarge

Even when the study period was extended to all the way to January 1994 when all the index data was available, the well-diversified portfolio generated a total annualized return of 7.8% versus 7.3% for the basic portfolio.

The well-diversified portfolio also outperformed the basic portfolio in both bull markets and in one of the two bear markets as shown in the chart below:

Source: T.Rowe Price Report, Spring 2013, T.Rowe Price

Related ETFs:

• SPDR S&P 500 ETF (SPY)
• Vanguard Dividend Appreciation ETF (VIG)
• SPDR S&P Dividend ETF (SDY)
• iShares Dow Jones U.S. Select Dividend ETF (DVY)
• SPDR Gold Shares (GLD)
• iShares iBoxx $ Invest Grade Corp Bond (LQD)
• SPDR KBW Bank ETF (KBE)
• SPDR KBW Regional Banking ETF (KRE)

Disclosure: No Positions

Source: Fortune Global 500, Fortune

The current dividend yields of some of these firms trading on the US markets are shown below:

1.Company: Petrobras (PBR)
Current Dividend Yield: 6.44%
Sector: Oil and gas

2. Banco do Brasil SA(BDORY)
Current Dividend Yield:  6.86%
Sector: Banking

3.Company: Banco Bradesco SA (BBD)
Current Dividend Yield:  3.10%
Sector: Banking

4.Company: Vale SA (VALE)
Current Dividend Yield: 4.86%
Sector: Metals & Mining

5.Company: Itau Unibanco Holding SA (ITUB)
Owns Itausa-Investimentos
Current Dividend Yield: 3.44%
Sector: Banking

6.Company: Ultrapar Participacoes SA (UGP)
Current Dividend Yield: 2.23%
Sector: Oil, Gas & Consumable Fuels

Related ETF:

iShares MSCI Brazil Capped Index (EWZ)

Disclosure:  Long ITUB and BBD

• DAX: 4.0%
• FTSE 100: 9.4%
• CAC-40:  5.9%
• S&P 500: 11.0%
• Dow Jones Industrial Average: 12.2%
• IBEX 35: 3.1%
• Swiss Market: 15.9%

Note: Except the U.S. and UK markets, the rest of the markets were closed on May 1st for Labor Day holiday.

I wrote an article about investing in Japanese stocks back in January. Since that time the Nikkei has surged to outperform the U.S. indices.

The chart below shows the 2-year performance of  Nikkei against the S&P 500 and Dow Jones indices:

Click to enlarge

Source: Yahoo Finance

A significant portion of the gains in the Japanese equity markets can be attributed to foreign investors. After the asset bubble burst in the early 90s,  domestic investors avoid stocks have continued to avoid stocks and the country has one of the lowest stock market participation among developed countries.  Due to the steep rise of Japanese stock prices this year, investors may want to tread cautiously before initiating any new positions. In the past two decades Nikkei rallied many times only to lose all the gains.

The best way to gain exposure to Japan is via ETFs. The iShares MSCI Japan ETF (EWJ) is the country-specific ETF for Japan. It has an asset base of over $10.0 billion and  total holdings of 313 companies. The other two Japan-focused iShares ETFs are iShares Japan Large-Cap ETF (ITF) and iShares MSCI Japan Small-Cap ETF (SCJ).

Update:

From Mrs. Watanabe Strikes Out, The Wall Street Journal (May 3, 2013):

Japanese stocks have been on a tear; the Nikkei index rose about 50% between November and mid-April. That is thanks to the pledge by newly elected Prime Minister Shinzo Abe to reform the country’s economy and more importantly the central bank’s plan to stoke 2% inflation.

But it isn’t clear Japanese investors are confident the good times will last. While foreign investors bought a net $77 billion of stock during that period, Japanese individuals and institutions sold a net $74 billion, according to the Oriental Economist. (emphasis added)

Disclosure: No positions

Since the split in January, the stock has mostly remained stable and reached a high of $49.05 in March. However unlike the last time when the stock was split when the price hit over $90.00 , this time the stock was split into 3 for 1 on Apr 30, 2013 when the price was in the low 40s. After closing at $42.06 on April 29th, SBS opened at $14.03 the next day on a split-adjusted basis. Today it closed at $14.31.

The following chart shows the 2-year returns:

Click to enlarge

Source: Yahoo Finance

Currently SABESP has a market cap of $9.80 Billion and a dividend yield of 2.27%.

Disclosure: No Positions

The table below shows vehicle density in select countries:

Click to enlarge

Source: Russian and CIS automotive industry overview, March 2013, Ernst and Young

A few interesting points to note from the above table:

• BRICs have lower vehicle density than developed countries such as the U.S. and Germany.
•  With 260 cars per 1,000 people Russia has the highest vehicle density among BRICs and India has the lowest rate.
• Brazil ‘s vehicle density per 1,000 people is higher than India and China’s rates.
• The U.S. has the largest vehicle fleet size and density among developed countries due to the lack public transportation in much of the country.
• Though the U.S. population is roughly double that of Russia’s population, the total light vehicle fleet is about six times that of Russia’s.
• Since the vehicle density is only in the double digits in India and China, automakers have a  huge market potential in these countries.