Brazilian equities look uninvestable as the political shift toward socialism threatens to make an already poor inflation-adjusted long-term bet worse. The Brazil ETF's sharp decline after the political outcome illustrates the concern, though individual winners remain possible. x.com  x.com  x.com 

Lula's fourth mandate has dealt Brazilian equities a political shock, with a risk of deeper losses after the initial selloff. EWZ fell about 18% overnight and 27% by morning; the intraday recovery does not settle what comes next, given the much deeper falls after Argentina's 2019 primary-election shock. x.com  x.com  x.com 

Political fear after Lula election wins is a buying opportunity in Brazilian stocks, including EWZ, MercadoLibre and Nu Holdings. In USD, the table shows 12-month gains of 115% after 2002, 76% after 2006 and 18.5% after 2022, though shorter-term returns varied. x.com 

Brazilian equities could take months to absorb exits by funds unwilling to hold stocks under Lula, despite single-digit P/Es. The Bovespa looks to be putting in a 3.5-year cycle peak, and EWZ looks lower over the next few weeks or months. After a failed breakout, EWZ likely returns to the bottom of its consolidation near $26 weekly demand, though a short-term bounce may come first. x.com 

Crowded Brazil and EWZ longs are exposed after Lula's surprise election win, as reported by negligible_cap. MercadoLibre and many others are going to get absolutely nuked tomorrow. x.com 

Brazilian equities remain a strong opportunity against other global emerging markets because fiscal easing, rate cuts and Brazil's critical-minerals edge survive election results. Brazil is down only 6% for the month after an earlier rally and remains near its four-month range. Lula's terms have been net positive for EWZ; this is a bet on Brazil's outlook, not on who wins the presidency. x.com  x.com  x.com 

Lula's election-time promise of student payments is not free and weighs on Brazilian equities. The proposed college benefits total R$9,500 annually per eligible student, alongside expanded high-school payments; EWZ down 25%. x.com 

Brazil's election results have turned the iShares MSCI Brazil ETF's Stage 2 continuation breakout into a Stage 4 breakdown. x.com 

Brazilian equities are early in a reversal that has only just started. Emerging markets are running in an opposite cycle to the US market and have begun to turn, and Brazil looks the strongest of them and serves as a safe haven. x.com 

MercadoLibre and Nu Holdings have massive runways and have thrived across political backdrops, so they do not need tax cuts or deregulation to keep winning. Both have performed extremely well in Brazil under Lula since 2023, even in a fragile macro backdrop. The election-driven selloff left these cream-of-the-crop businesses at lower multiples, and more near-term selloffs are possible. x.com  x.com  x.com  x.com