According to the “Cyclically Adjusted Price Earnings” metrics, the Brazilian stock market appears cheaper than most others around the world (see table below). Here’s more from Jim O’Neill:

“… according to one of the more cautious valuation techniques I have learnt to follow, so called CAPE (Cyclically Adjusted Price Earnings), the US market is certainly not cheap today, and neither are Australia nor Mexico (see table below). Such a cautious approach does not mean these or any markets will stop rallying but it is a sign to be careful and that these markets could be especially vulnerable to disappointing and surprising news. Many other markets do remain quite cheap, including the other seven of our so-called Growth Markets, as well as Japan and much of continental Europe. This explains why, as I have been suggesting, I would still concentrate my bullishness there.”

Source: Goldman Sachs

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3 Responses to Is Brazil’s Bovespa becoming cheap again, or it’s just a “bull trap”?

  1. frank stein says:

    He should visit the North_South railway, the transposition of Sao Francisco river and fly commercial airlines in Brazil to get the monumental incompetence running (and ruining) the country.

  2. Sano says:

    In the words of Admiral Ackbar:

    “It’s a Trap!”

  3. Ranghora says:

    For sure Brazil’s realestate bubble is one of the biggest in the world and in process of bursting in the near future. In addition to the large inventory construction companies carry in their books, there is an amazing high number of people trying to get rid of their properties, which they bought during contruction, seen that after taking delivery of the property they face large finance payments on top of the always out of control maintenance levies (condominio). People just do not have the money to pay for all those RE expenses on top of private schooling, private health insurance, and all that goes with being middle class in Brazil. Expect bubble to burst by 1st half of 2014 at the latest.

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