Coffee, soccer, and the world’s skimpiest bikinis are what global money manager Selwyn Ortz would have thought of at the mention of Brazil five years ago, he tells me. No more. Today, his focus is on an economy on the move, a more than a 75% drop in the rate of inflation over the past five years (to 3.4%), a significant rise in the standard of living, a hot new market for luxury cars, a very appealing equities market, and what he believes are plenty of stock gains in the offing.

As a result, Brazil — whose credit rating has been upgraded to its highest level in decades by leading credit agencies— now accounts for about 2.5% of the assets of Mr. Ortz’s $98 million stock portfolio, the country’s highest representation ever. Brazil is not growing as fast as China and India, but it has a lot of good things going for it, and its stocks are a lot less expensive, Mr. Ortz, a principal of Hong Kong-based HK Investments Ltd., said.

Given some impressive economic and market performance numbers, his enthusiasm is understandable. The Brazilian stock market, as measured by its Bovespa Index, is percolating, up 21.7% so far this year, following a 32.9% gain in 2006. In large measure, that’s an outgrowth of an expected 4.5% growth in gross domestic product this year, well above the 2% to 2.5% growth in American GDP that many economists are forecasting.

Clearly, the world’s financial community likes what it sees in Brazil, as indicated by the country’s ballooning currency, the real, which over the last three years has appreciated roughly 35% relative to the dollar. It has also gained against a host of other currencies, including the euro, the Swiss franc, the British pound, and the Japanese yen. In fact, so far this year, the real is the world’s strongest major currency.

Two other Brazil bulls, investment newsletter editors Gregory Dorsey and Michael Larson, think the real’s run is far from over, with Mr. Larson, an associate editor of the Safe Money Report in Jupiter, Fla., citing Brazil’s surging trade with China, India, and other major consumers of raw materials, its having the largest trade surplus in the Americas, and its making the most progress of any major country toward a balanced federal budget.

Another benefit is broad investor approval of President Lula da Silva’s initiation of fiscally conservative policies. For example, tax receipts are up and public sector debt has been reduced markedly in recent years. Interestingly, when Mr. Lula da Silva was elected president five years ago, it was widely feared he would wreck the economy and destroy Brazil’s currency. He did precisely the opposite.

Mr. Dorsey, the editor of the New York-based Emerging Investments newsletter, figures “some of the best values in the world right now can be found in Brazil,” where the average stock, though up strongly last year, sells at a reasonable 10.7 times the forward year’s earnings. In contrast, Shanghai shares sport p/e multiples in excess of 40.

Here’s a rundown of Mr. Dorsey’s top Brazilian picks, all of which trade on the New York Stock Exchange:

• Companhia de Bebidas Das Americas, a manufacturer and distributor of beer, soft drinks, and nonalcoholic products throughout Latin America.
• MSCI Brazil Index Fund, an exchange-traded fund that owns a broad spectrum of Brazilian shares.
• Embraer-Empresa Brasileira de Areonautica, a commercial and military aviation manufacturer.
• Gol Linhas Aeras Inteligentis, Brazil’s second largest airline.
• Petroleio Brasileiro, an integrated oil company.
• Companhia Vale do Rio Doc, one of the world’s largest mining concerns.
• Banco Brodesco, Brazil’s discount bank, with more than $23 billion in revenue.

Mr. Larson’s best bets are:

• CPFL Energia, a Brazilian power utility.
• MSCI Brazil Index Fund.

The bottom line from our trio of bulls: Rio de Janeiro is rocking and investors should rock along with it by partaking of its potential for solid capital gains.

dandordan@aol.com