Michael Shulman

Emerging Markets: Buy Now, Short Later

by Michael Shulman   06/04/09

Free Trading Guides

Banking data -- many of the banks are publicly held here and in other real stock markets -- must be close to the truth.

And, in Q1 2009, state banks loaned more money than they did in all of 2008. Much of that money is under mattresses, went into the stock market or went to build more industrial capacity that will sit unused.

How to Invest in the Emerging Markets

Our fake rebound plus their fake rebound means three things:

1. Treasuries are tanking in expectation of inflation. (Find out how to play this.)

2. Commodity prices are rising as the U.S. dollar falls alongside Treasuries.

3. Because the BRIC countries produce a lot of commodities, a second wave of money is heading their way.

How long will all this last? Long enough to create another bubble.

So play the trend short term by going long now, but be ready to short emerging markets once they blow up.

What stocks should you buy for the short-term play? Check out Enter the Dragon: 8 China and Emerging Markets Plays.

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Michael Shulman is the editor of ChangeWave Shorts. To learn more about him, read his bio here.