BRIC BRAC.

Stephen Leeb makes the interesting suggestion that we re-think "BRIC" - Brazil, Russia, India and China and substitute "BRAC" - Brazil, Russia, Australia and Canada, i.e. substitute emerging countries with resource rich countries.

I like the idea for diversification as well. You never can tell who's about to nationalize, seize, go carbon-bonkers, or drink themselves silly (that would be the Australians, though come to think of it the Russians also qualify).

There are some well run, resource rich stocks in BRAC, among them Petrobras, Lukoil, Woodside Petroleum, Santos, Suncor, Canadian Natural Resources, Imperial Oil, or, as the article highlights, the country ETFs: EWZ, RSX, EWA and EWC.

istockanalyst: Changing BRIC for BRAC.

Quotes:

"The currencies of countries rich in essential resources—oil and other fuels, metals, agricultural products—are in strong demand," says long-standing market expert Stephen Leeb.

The editor of The Complete Investor explains, "Brazil, Russia, Australia, and Canada are awash in natural resources. And in a world of growing shortages, these countries can't miss."

"The acronym 'BRIC—standing for Brazil, Russia, India, and China—is in vogue as shorthand for the emergence of the developing world.

"But we’re herewith proposing an emended version: 'BRAC'—standing for Brazil, Russia, Australia, and Canada.

"That’s because these four countries are the ones most brimming over with essential natural resource, with each one a net exporter of fuels and other natural products. In a world where resource shortages will only get worse, these countries will stand out from the pack.

"Don’t get us wrong. China and India remain the largest and fastest growing emerging economies and still face exceptional futures.

"But their major resources are cheap labor, which will become less cheap as their economies keep growing. Indeed, labor costs in these countries already have begun to rise relative to the rest of the world.

"Meanwhile, continued gains in commodities mean that Australia and Canada are gaining relative to the rest of the world. It’s hard to overstate just how important relative resource independence is in a world where resources are becoming ever more scarce and expensive.