Colombia is Popping Up on My Radar

My current scenario for global equities has them selling off over the summer, then a rebounding led by emerging markets starting sometime in the fall. In that case, you want to start building short lists of high growth countries to pile into, once the turn comes.

I would be including Colombia on any such list. It enjoys that sweet spot of being an oil exporting, emerging country whose shipments hit an all-time high of 884,000 barrels a day, about half the quantity that Libya once shipped. The quality of the government has improved dramatically over the last decade. It is a narco state no more, although public and investors' perceptions lag deeply. The country has seen upgrades by leading credit agencies. Billionaire Carlos Slim, the world's richest man, has recently been seen as a major investor.

The country also enjoys one of the world's most favorable demographic pyramids. A young, upwardly mobile workforce is producing a rising tide of consumers and a burgeoning middle class, while expensive seniors requiring social services and medical care are few and far between.

Columbia was the world's best performing equity market in 2010, bringing in gains of over 100%. That was how the country ETF (GXG) performed. Is history about to repeat itself?

Like most emerging stock markets this year (EEM), Colombia has been beaten like a red headed step child. That makes it a prime target for a rotation, should another leg to the "RISK ON" market develop later in the year, as I expect. They also make great coffee. Just ask Juan Valdez.