- Great investment returns come from buying things nobody wants to touch with a ten foot pole.
- Argentina might be such a case.
- The MSCI Argentina ETF is definitely not the way to get exposure to the Argentinian bargains.
A look at the Argentinian stocks traded on the NYSE shows how there are good businesses there.
Figure 1 Argentinian stocks traded on American exchanges
Mott Capital Management 4Q20 Commentary
Mott Capital Management commentary for the fourth quarter ended December 31, 2020. Q4 2020 hedge fund letters, conferences and more We survived and flourished in 2020. That is the good news. For the year, the Mott Capital Management Thematic Growth Composite climbed by 25.4% net of fees and transaction costs, easily beating the S&P 500 Read More
Source: Author’s data
Most companies are directly related to the Argentinian economy which has recently been re-categorized as an emerging market. That is the first sign of a possible rebirth. However, Argentina still has lot’s of issues like political risk, currency problems and economic stagnation. But, to reach great investment returns it is better to buy when there is blood on the streets. I think that there is still plenty of blood on the streets to offer positive asymmetric risk reward investing opportunities.
Nevertheless, investing in Argentina is not an easy straightforward process. A look at the holdings of the iShares MSCI Argentina ETF (AGT) shows how Mercadolibre (MELI) makes 24% of the index while Tenaris (TS) 17%. The two companies, the first a LATAM growth promise story and the second a global steel pipe maker, are certainly not the way to Invest in Argentina. An investor can get much better exposure by carefully selecting specific stocks with lower valuations, better book values and revenues actually coming from Argentina.
Enjoy the video where we give a quick overview on 10 stocks that might give you some research and investing ideas.