(By Horacio Marquez ) Nearly one year ago – Oct. 27, 2008 – I recommended buying the iShares MSCI Brazil Index (NYSE: EWZ). That week, the exchange-traded fund (ETF) reversed its decline and rallied 31%.  Today it is about 110% higher than our original entry point, which pretty much marked the bottom. 

In that article, I highlighted two top Brazilian companies that would lead the recovery: Petroleo Brasileiro (NYSE ADR: PBR) and Vale (NYSE ADR: RIO). And a few months later I specifically recommended Petrobras in "Buy, Sell or Hold" column.  It has since rallied 66%.

Now that circumstances and valuations have changed dramatically, we must revise those forecasts.

My initial recommendation was in a market that had priced in an end-of-the-world, doomsday scenario. I expected massive measures to be implemented by central banks and governments to contain the crisis. 

In Brazil, specifically, my recommendation hinged on the structural strengths that government had painstakingly built into the nation's economy. I was focused on fiscal and monetary discipline and the country's decades-long successful struggle to wean itself from imported oil.  And it doesn't hurt that this commodity powerhouse has just about everything the world needs to grow – other than lithium.

I also highlighted the highly professional central bank, which, independent of political pressures, kept real interest rates high in the Brazil's commodities-crazed bonanza years. That restraint kept the economy from overheating, built a rock-solid cushion of international reserves to be deployed precisely in a crisis like the one we experienced last year, and resulted in a healthy internal banking system.  The recommendation of EWZ worked like clockwork.

The inevitable critics, many of who laughed at the concept of decoupling, have been proven wrong.  Brazil was the last Latin American economy to go into recession and the first one to come out.  Brazil posted a second-quarter growth of 1.9% and next year it will grow almost 5%.  The economy has added 1 million jobs, which replaced the 800,000 jobs lost during the crisis.