The Energy Play Hiding In Plain Sight

We touched on Brazil last time around, specifically how it was one of the cheapest stock markets on the planet.

That was before the incursion into Iran lit a fire (pun intended) under energy markets. Now, you might be asking: what does a Middle East flare-up have to do with Brazil?

As it turns out, quite a lot. Because Brazil isn't just cheap as chips. It also happens to be among the least exposed countries to energy shocks of any major economy on the planet, as the following chart shows (h/t @jackprandelli)...

And some more context...

Now, cheap assets can always get cheaper. Over the years, Brazil has tested the patience of more than a few investors.

But when the valuation case is this compelling and the macro setup starts moving in your favor, it’s worth taking a closer look. And also, when one of the greatest macro investors alive is putting real money behind the same thesis… well, that's not nothing:

Also, a shameless plug: if you're an accredited investor looking to capitalize on rising energy prices through deeply undervalued assets, our Argentina private equity deals were built for exactly this environment.