Hot market lures new generation of Brazil investors

By Stuart Grudgings

RIO DE JANEIRO (Reuters) - When Paolo Portinho meets up with his musician friends for a night out in Rio de Janeiro, they jam a few tunes and knock back some beers -- but only after having a serious talk about the stock market.

Brazilians' long-held suspicion of stock investment, born out of years of rampant inflation and economic instability, is evaporating in the face of a Sao Paulo market that has more than tripled in 4 years on the back of a booming economy.

The number of individual investors in Brazil has risen six-fold in the past five years and more than doubled since 2006 to nearly 490,000. In 5 years, the daily amount they trade has soared to 1.8 billion reais (560 million pounds) from 120 million reais (37 million pounds).

At a time when many Americans and Europeans are fretting over their jobs and houses as recession looms, magazine covers here are full of pictures showing grinning investors being showered in cash from their stock market exploits.

Despite a pullback in recent days, the market's Bovespa index is up 1 percent this year, compared to a 44 percent surge in 2007.

That compares to a 10 percent fall in the U.S. Dow Jones index and double-digit losses in several major European stock markets.

"I've been trading stocks since I was 18 but I never saw anything like this," said Mauricio Bastter Hissa, a 44-year-old who has written several best-selling books on investing here.

Hissa, a triathlete often found walking his German Shepherd dog near Rio's Leblon beach, gave up his job as a doctor last year to meet growing demand for his workshops and investment advice on his website.