In the past few years, the Brazilian economy has witnessed its deepest ever recession. It 2016 only, it shrunk by a whopping 3.6%. By January 2017, the economy was about 8% smaller than it was at the end 2015. Despite this deep-cutting recession, there is a man who still believes that Brazil is the ideal investment destination. Furthermore, he is one of the few Brazilian investors who stayed afloat throughout the recession. His economic tenacity can be attributed to his education and many years of experience in the financial sector. This man is Igor Cornelsen.
Early life and Education
According to About.me, Cornelsen was born on 4th November 1947 in Curitiba, Brazil. His childhood dream was becoming an engineer. At the age of 18, he joined the Federal University of Parana to pursue that dream. However, after just two years in the engineering college, he switched to economics at the same university. Gaining admission to the Federal University of Parana’s school of engineering was an achievement in itself. At the time, it was the only university offering engineering courses in Santa Carina and Parana states. The admission process was, therefore, very competitive. He eventually graduated with an undergraduate degree in economics in 1970.
After graduation, Cornelissen started working as an investment banker at Multibanco right away. Multibanco was a stable investment bank at that time. He attributes the ease of finding the job to his mastery of compound interest calculations at a time when computers and calculators were rare.
At Multibanco, it did not take long for Igor’s star to shine. In 1974, he was named the best performing investment banker in his cohort of recruits. This exemplary performance earned him a promotion to the company’s board of directors in the same year. In 1976, he was appointed the CEO of the company. Cornelsen held the position of CEO until 1978 when Bank of America acquired Multibanco. Though he was requested to continue serving Multibanco, he decided to look for a new challenge.
He later joined Unibanco, an established Brazilian investment firm. He worked there until 1985 when the inflation rates rose exponentially. After leaving Unibanco, he joined London Merchant Bank as an investment advisor. London Merchant Bank later re-branded to Libra Bank PLC. His stint at Libra Bank was a success. The Standard Chartered Merchant Bank noted his accomplishments at Libra and offered him a seat on the company’s board of directors. He held the position for about seven years. During that period, he also served as the company’s representative in Brazil.
In 1995, Cornelsen founded Bainbridge Investment Inc. The company is based in The Bahamas. It identifies viable investment opportunities and comes up with long-term investment strategies. Today, Cornelsen works at Bainbridge. Besides providing leadership, he identifies and tracks investment plans. Thorough the company, Igor passes his expertise and experience to potential investors. Prominent US companies such as Burger King are among his clients.
Cornelsen’s duties at Multibanco and Unibanco involved dealing with stocks. Perhaps that explains why his investment strategies revolve around the stock market. Most investors prefer investing in well-performing companies. On the contrary, Igor encourages his clients to invest in damaged stocks. He believes that damaged stocks present a perfect investment opportunity as they can be acquired at a low price. The shares can then be resold for a significant profit when the company stabilizes. It is also the reason why Igor prefers buying assets in countries experiencing economic instability.
Having spent most of his career in Brazil, Igor urges investors to invest more in new markets such as Brazil and China. He is a resourceful consultant for investors planning to invest in Brazil. Igor hints that the Brazilian market is different from other economies such as the USA and Europe. He, therefore, urges investors to familiarize themselves with the business environment before investing in Brazil.
Cornelsen also advises investors on WordPress to pay special attention to the currency exchange rate. He insists that shopping around for the most favorable forex rates can make the difference between successful and non -successful investors. Igor is not mean with his investment secrets. Sometimes, he freely reveals them in seminars and media interviews.
At times, Igor Cornelsen holds views that most of the other investors disagree with. For example, In 2010, the Brazilian government introduced sweeping economic changes. Most investors regarded this as a buying signal because they thought the changes would spur economic growth. Cornelsen maintained that the changes were insufficient. He predicted that they would have calamitous results. He sold his assets in Brazil when other investors were buying. The 2015-2016 Brazil economic recession proved him right.
Cornelsen also took a firm stand regarding the future of the Euro. In the wake of the European sovereign debt crisis and the resultant economic recession, most investors predicted that the Euro would crumble. Igor maintained that the Euro would remain until it is replaced by another international currency. Now that the Euro is steadily strengthening against the US Dollar and the Pound Sterling, he will probably be proved right in the fullness of time.
Where does Cornelsen get his investment ideas?
Igor Cornelsen was exposed to finance at a very young age. His extensive experience is, therefore, the source of many of his ideas. He says that part of the success comes from his ability to identify an upcoming market trend before other investors.
Furthermore, Cornelsen is a proficient researcher. He spends considerable time analyzing data from financial websites. However, he warns investors to select their sources of financial information carefully. He says that sourcing economic data from biased sites can cause terrible investment errors.
Cornelsen keeps a track of all countries with rising investment assets. He also notes countries experiencing economic or political difficulties waiting to pounce on an opportunity. Finally, he consults his business partners and financial experts.
Investments Igor Keeps An Eye On
In 1960, Brazil’s gross domestic product output was $15 billion. In 2011, the GDP number hit $2 trillion. Brazil is now the 7th largest economy in the world in spite of serious economic turmoil over the past three years. Brazil is filthy rich in natural resources, but it is also rich in corrupt politicians. In fact, Lulu, one of Brazil’s most loved past presidents tried to run for president this year even though he’s behind prison bars. Running for president while serving a prison term doesn’t happen in other countries, but in Brazil, anything goes when it comes to politics.
Brazil extensive offshore oil fields, and its vast supply of natural resources, as well as iron-ore production, make the country an attractive trading partner. In fact, Brazil supplies the world with more ethanol than Europe and Asia combined. The country produces a plethora of consumer products, like shoes, clothes, and clever household items. And the country’s relationship with China keeps getting stronger after China’s economy took a nose-dive in 2016. Brazil and China along with Russia, India, and South Africa make up the BRICS emerging market union. Those reliable trading partners buy Brazilian natural resources and products, but they also invest in Brazil’s tech startup industry as well as other investment opportunities.
But just like other emerging markets, investing in Brazil is always a “risk vs. reward” proposition. In the past ten years, Brazil’s stock market has under-performed in relation to the S&P by almost 100 percent. And political stability is a hard thing to find in Brazil. Brazil depends on its export industry, and the country relies on external financing. And that makes some investors nervous.
There are several ways to invest in Brazil and feel the excitement that vibrates through the largest country in Latin America. Many investors stick with U.S. Exchange-Traded Funds (EFTs) and securities listed on the Brazilian stock exchange. Investing in EFTs is a safe way to get started in the Brazilian market.
Other investors who know how the banking industry works in Brazil invest in Itaú Unibanco, the largest private bank in the country. Other investors like Banco Bradesco, the second largest private bank because of the bank’s executive team. Investors also believe Petrobras, Brazil’s giant oil company, is a good investment even though Petrobras dealt with corruption issues in the recent past. Ambev is another investor favorite. Ambev is the largest beverage maker in Brazil. Brazilians love their beverages especially those big bottles of Brazilian beer. Embraer, the third largest jet maker in the world, is another good investment. But if a recession develops in the U.S. or Europe, that investment may not perform as planned. Other investors like Brasil Foods because it is the largest food company in the country. Russia buys a lot of food from Brasil Foods.
Even though the commodity sector of the Brazilian economy is still coming out of a painful recession, investors see the potential in investing in Brazilian commodities. One reason for the interest is the U.S. trade war with China. China is buying more soybeans and corn from Brazil. If Trump intensifies that war, Brazil will be China’s main source of those products as well as other products that fall under Trump’s heavy tariffs.
Investing in Brazil is always a nail-biting experience for some investors. But the country has a lot to offer investors at the moment. But the main fly in the investment ointment right now is the upcoming Brazilian election. A Trump-like candidate is leading in the polls, and if he’s elected, Brazil may become more nationalistic in terms of political and economic decisions.
Igor Cornelsen spends most of his time in either Sao Paolo or South Florida. When he is not solving tough investment puzzles, Igor plays golf. His day kicks off early in the morning when the European stock market opens. Follow him on Facebook for more investment insight.