Studying Foreigners

Extra Credit- Foreign Stocks

BLX

Source: money.cnn.com, April 30, 2007, 10:30am

Reason for Selection:  I chose Banco LatinoAmericano since it relates a lot to what we have been talking about in class.  From what I understand, this bank is the central bank for many Central American and Caribbean countries.  This stock has a relatively low price and any price change will make a large difference in the portfolio.  Also, BLX has been on an upswing for last week and I hope the stock will continue with that trend.

SCIX

Source: money.cnn.com, May 1, 2007, 3:15pm

Reason for Selection:  Scitex hit a three-year low in March with the lowest prices since I was born in 1981.  In the last month the stock has begun to climb back up.  I believe the stock is on an upswing and will continue to rise.

Even more, the stock competition is an all or nothing deal.  I thought about creating a diversified portfolio of five stocks from different countries and different industries to reduce unsystematic risk.  Yet, there is a five-point bonus for first place, while second place receives no bonus.

I then decided that the riskier the portfolio, the better.  Since Scitex is a tech company and tech companies traditionally have a higher systematic risk, I chose them.  I will either receive big gains and hopefully win, or big losses and be just another face in the crowd.