Reversal of fortune
Making money in the stock market usually takes a lot of hard work and patience. Not so over the last month or so, however. That's been easy money -- too easy.

About six weeks ago, Mr. Market's mania sent lots of stocks down the tubes, especially the foreign companies I love. I went shopping. Five and a half weeks later, my average gain on those investments is well over 30%.

The biggest and the best
Keep in mind, I wasn't dabbling in overly speculative stuff here. The craziest it got was purchases of Motley Fool Global Gains recommendations GigaMedia and Grupo Aeroportuario del Centro Norte (NASDAQ:OMAB), known as OMA. In fact, you didn't have to shop for small-cap beta-bait to earn major money over the last month. Even sleeping giant Nokia (NYSE:NOK) tacked on 20% over the period.

But here's what's truly amazing: My performance pales next to the gains posted over the past five and a half weeks by other big, well-known foreign companies trading on U.S. exchanges.


Market Cap ($000,000)

Price Change




Aluminum Corp. of China (NYSE:ACH)



Sinopec Shanghai Petrochemical (NYSE:SHI)



Companhia Vale do Rio Doce (NYSE:RIO)



Vimpel-Communications (NYSE:VIP)



*Screening and data from Capital IQ.

And these companies weren't the only ones to make big moves. When I ran a screen to take a look at how foreign winners compared to U.S. ones overall during this time (all greater than $250 million in market cap, all trading on major U.S. exchanges), I was astounded by what I found.

% of U.S Stocks

% of Foreign Stocks

Gain >15%



Gain >20%



Gain >30%



*Companies with market caps greater than $250 million, all trading on major U.S. exchanges. Screening and data from Capital IQ.

More than 300 foreign-based companies -- 43% of the total -- posted gains of 15% or better. That's hundreds of foreign companies that gave investors a year's worth of market-beating gains in just over a month.

Legends of the fall
Figuring out exactly why foreign stocks outperformed like that isn't easy. Personally, I look to that big August swoon. While overall markets were tanking, a lot of foreign issues I track were taking it on the chin much worse than they deserved. The ones I bought looked to be trading at 20% to 25% discounts. All they had to do was claw their way back, and there would be great gains.

The subsequent rebound was both faster and bigger than I expected, and I think we owe that to the Federal Reserve. As I -- and my colleague Bill Mann -- have observed, those falling interest rates in the U.S. have prompted investors to re-evaluate the long-term fate of the greenback. And for right now, they seem to agree that it will continue to wither, meaning investment in foreign cash flows and global commodity producers makes an awful lot of sense.

Foolish bottom line
Profits are rarely this fast or easy, and no one should invest hoping for that kind of quick return. The stocks above could give those gains back in an instant, because, in the short term, anything's possible. (I took a little off the table for just that reason.)

But I firmly believe these recent returns teach us a lesson about long-term value: It's never a mistake to buy the best at great discounts, and if the bargains are overseas, that's where you should invest. As other world economies take on greater importance, global investing should be a part of everyone's portfolio, even those who don't think the dollar is doomed. So keep your shopping list full, and don't be afraid to take advantage of Mr. Market's next easy-money holiday. If you could use a few new foreign ideas, my colleagues at Motley Fool Global Gains serve them up, two per month. They'd be happy to let you try out the service for free.

At the time of publication, Seth Jayson, a top 10 CAPS player, had shares of GigaMedia and OMA, but no positions in any other company mentioned here. Fool rules are here.