In today's Financial Times newspaper, there appears an article reviewing the last five year's of economic and financial turmoil in Argentina. To those of us who have followed events ( political and financial ) in Argentina for a very long time, there is nothing particularly new here; however, for those who are arriving late to the party, the article is worthwhile for a close reading. Comments by M. REDRADO, President of the Argentine Central Bank are worth noting.
Maybe next time you can paste the article if possible because for those of us in China who don't get the FT everyday it's diffilcult see, some articles are free and others aren't on the FT website.
On economic matters, what last May and June did for me is not so much scare me in terms of the correction, but in terms of how much correlation there is between markets these days. I thought that by having a lot of international stocks, I would achieve more diversification- actually, the positive relation between what is happening in the US and how it effects other markets was astounding, at least in the short term.
I am only 31 so my interest in stocks has only been evidenced in the past few years- since I have had money! but I do see some parrellels between the Russian crash and the Argentine crash- not that Argentina is being pumped up by oil- simply the resulting recovery is having a profound and long lasting effect on the economy having gained a newly found competitiveness after devaluation.
If history can repeat itself in just a slightly similar way, the argentine economy can find itself invigorated and as price controls come off we should see the economy blossoming even more- that is unless they are fiscally profligate as have been in the past.
On a micro level, the banking sector should be one of the key beneficiaries of this shift and I see BFR as having a key advantage in that it has the value of being backed up and managed- to a certain extent, by a major international banking group.
Despite the fact that BBV never seem to reply to emails requesting information, I see them as having or giving a certain cache in terms of a management premium.
Longer term, being the next 5 years, we should see BFR in the mid 20's to 30's. I see myself having ample time to wait this one out as we wait for the macro economic flower to bloom.
However, we have seen false dawns before and should this flower start to wilt, I will drop it like a hot potatoe. After all, momentum is a two edged sword.
By the way, I figure that last years earnings for BFR were approximately $1.20. Is that your understanding as well?