As fate would have it, our discussion with Zacks senior Latin American markets analyst Claudio Freitas, CFA is being published on United Nations Day, according to our calendars. What can investors expect from Latin stocks going forward?

Latin America is widely regarded as a growth play in the equity markets. As long as economic growth remains intact, Latin markets will keep on moving. The explanation for this view is that the region is a commodity producer: agricultural goods in Brazil and Argentina, metals in Brazil, Chile and Peru, oil in Venezuela and Ecuador, natural gas in Bolivia, etc.

Is that how you see things?

In general that's a fair vision. However, it must be better understood that not all commodities are the same and not all countries have the same economic policy or the same stage of development Oil and gas producers like Venezuela, Bolivia and Ecuador have an unstable political environments and a very oil dependent economy. Those countries are expected to suffer more, including political and social unrest. Argentina has been going through a difficult political and economic moment even before the crisis -- for sure things can only get worse.

Where are the strongest Latin American regions, in your view?

Chile is by far the most developed nation in the region, with a good macroeconomic position; it should recover fast in the following quarters. Mexico has strong ties with the U.S. and should follow Uncle Sam down for a while. The biggest economy in the region, Brazil, deserves a better look.

Brazil has sound macroeconomic policies and a stable fiscal situation. It also has more than US$200 billion in international reserves and a very solid banking system. Nevertheless, falling prices of metals, steel and other commodities are a matter of huge concern.

So let's stay focused on Brazil a moment. What's your outlook here?

I have said before that the fate of Brazil is linked to that of China. Most of the commodities that Brazil exports, like iron ore and carbon steel, are products related to infrastructure investments not consumption products. Thus it is important to understand what will be the effects of the crisis in emerging Asia, particularly China and India.

Asia's development has been complementary to U.S. growth; while U.S. provides consumption and need for investments, Asia provides cheap industrial goods and huge savings at low rates. This symbiotic relationship is over. Asia will have to develop its own internal market in order to keep on growing.

This situation reminds me what happened to Brazil after the 1929 crisis. Prior to 1930, Brazil was a country whose economy was based in the export coffee to U.S. and Europe, just that. After the crisis, coffee prices collapsed Brazil had to focus on the internal development and industrialization, and this was the beginning of the development of an internal market in Brazil. Between 1930 and 1973, Brazil had the fastest growing economy in the world. This trend ended after the first U.S. oil crisis, in the 1970's.

Most of the time, crisis also represents opportunities. There is a considerable chance that this crisis will lead to the emergence of a huge consumption market in Asia in the medium-term.

Speaking of opportunities, do you have any Buy recommendations for us today?

There are some bargains that must be considered. Brazilian electric utilities pay high dividends, generate lots of cash and are trading at very low valuations. I would recommend Cemig (CIG) and Copel (ELP). Telecom operators are also interesting -- genuine cash cows with low exposure to the downward economic cycle. Tele Norte (TNE) and Brasil Telecom (BRP) are great alternatives.

Aggressive investors can start to consider some commodities stocks, even though the recession expected for the following quarters. Some of those companies are trading at very low levels and have great long-term potential, like Petrobras (PBR), or are companies that are linked to the government infrastructure investments in Asia like Rio Tinto (RIO). This is an aggressive medium-term bet, but if one is willing to follow Warren Buffett's lessons, they would make a lot of sense.

What types of Latin American companies would you advise investors stays away from?

At this point I would avoid stocks that are directly connected with the U.S. housing market, like Cemex (CX), and stocks that have posted huge losses in the Brazilian currency depreciation, like Aracruz (ARA). I would also avoid stocks that have been posting weak results even before the crisis, like Tim Participacoes (TSU).

Claudio Freitas, CFA is a senior analyst covering the Latin American markets for Zacks Equity Research.