I started trimming my Banco Bradesco (BBD) position today. This is a strategic decision: I decided to sell this position. Of course, I'm doing it in stages.
This was an attempt to make money on one of BRICs.
The main reason I'm selling this position: political situation in Brazil. Bad (for business) news are coming from there. Government more and more interferes with business decision. Last news: government tries to increase share of state banks in financial sector. Other news include plans to direct banks to increase lending. Brazil government more often finds itself in agreement with government of Venezuela, which is even more worrisome. I don't know if Lula wants to be Chavez, but you I can't completely ignore such possibility.
Another reason: Brazil economy is in situation of investment bubble. Real (local currency) appreciated a lot since beginning of year. Government even tries to slow down foreign investments: Brazil nuts? The country’s new capital control.
Third reason: Brazil economy mostly depends on export of raw materials and food. So far commodity prices are growing this year. But I have my doubts, especially because one of main export materials, iron ore, is in a bubble by itself. So much bubble, that China, main importer, uses less ore than it imports, stockpiling a lot of ore in ports (look here).
These factors make Brazil stocks way too risky for my taste. I will continue cutting down this position.
Full disclosure: at the time of publication author had a long position in BBD. Positions can change any time.