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Investing in Argentina and Argentina Stocks

Discusses *smart* ways of investing in Argentina, primarily thru ADRs on NYSE and NASDAQ. Covers companies like Grupo Galicia, GGAL, Banco Frances, BFR, IRSA(the biggest Real Estate Company in Argentina) IRS, Tenaris (TS), etc. UPDATED SEVERAL TIMES A MONTH.

Tuesday, March 14, 2006

Argentina is Improving, and is a Contrarian/Value Investor's Dream Buy

After the crisis of 2001, Argentina is on it's path to recovery. However, the general sentiment of Argentines toward their country is very pessimistic-they don't trust the banking system, and are hesitant to hold money in banks. Many of them want to hold hard assets like land, or sometimes, do have cash stashed under their mattresses.

Businesses in Argentina are conservative. They invest carefully-they know that the dollars and pesos they have today are precious.

The contrarian/value investor loves this scenario. I like it when businesses are conservative, the general population has a mistrust in the Government and the Banking system. Argentina is basically being treated by the Argentines themselves as some undeveloped (not developing) country and this will change. If you travel in South America today, Colombians and Bolivians seem to more upbeat than Argentines!

Argentina will catch up and be par with Mexico. and Brazil, comparing PPP and GDP/Capita, etc.. It probably has a long way to go before it becomes as efficient as Chile, the true star of South America, but still, a recovery or Argentina is guaranteed, the Financial system will mend itself, and this is the time to be IN Argentina.

You can pick a bunch of Argentine ADRs which trade on the NYSE and Nasdaq. Some good ones are BFR, GGAL, YPF, IRS, TAR, TEO, CRESY, and MGS.

I personally am long BFR, GGAL and IRS in my portfolio. I expect the Merval (the benchmark Buenos Aires Index) to keep going up for years to come, and bank stocks like BFR and GGAL continue to gain in the coming years (annualized returns of 20-30% is my expectation).

Argentina is hopelessly undervalued, and presents the best opportunity for Investing in Latin America.

Sanjay John G.

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