Lula Could Be a Good Friend to Brazil Investors
The new president presided over a huge rally in his prior term in office, and everything is lining up just right for a repeat. Also, November may be another good month for stocks and an unhappy anniversary.
Investors in Brazil may about to be very happy.
Photographer: Antonio Scorza/AFP via Getty Images
“Brazil is the country of the future,” President Charles de Gaulle of France once commented before cruelly adding: “And it always be.” Sure enough, more than a half century later, Brazil is still a country of the future. And it has just entrusted that future to Luiz Inacio Lula da Silva (universally known as Lula), who was making his sixth run for the presidency, and his third successful one. He’s now 77 years old, and has spent time in prison since the end of his eight-year term a dozen years ago. A veteran union leader, who leads Brazil’s Party of Labor, he is not the kind of steward that investors would normally want to entrust with running a country.
Except, the last time he ran Brazil, his election proved to be one of history’s greatest ever buying opportunities. And almost all of the wealth he helped to create has now drained away. This is the extraordinary performance of the Brazilian stock market since he was first elected in 2002: