I'll give my 2 cents. I got in ARCO right after the IPO. I dumped near the highs but still following the stock as I have friends that work for the company in Buenos Aires.
I still watch it from time to time. It caught my radar with the big down draft and looking to maybe jump back in on the long side if it goes down a bit more.
They are doing well but you still have to remember the type of risks in many countries in South America. Especially in Buenos Aires, Argentina where this company is based. You have risks there that you don't have in first world countries. Many of you reading this probably have never been in South America let alone lived there.
I lived there for many years and I also own several companies in South America. Let me tell you that in some respects countries like Argentina are still like the wild west. For example, imagine having to pay your employees a mandatory 27% a YEAR raise year after year after year. That is what happens there in Argentina with the unions. My salary costs were doubling every 3 year or less! Some places can raise their prices to match the true 25% to 30% a year inflation going on in Argentina but many places can't. McDonald's is one of those places. They can't raise their prices for a Big Mac 30% a year even though their costs are increasing year over year.
Also, the operating costs at each location should continue to go up each year in places like Argentina. Not only because of these government mandated huge yearly raises but also because of the wicked inflation going on in Argentina. The government has also ended subsidies in the electricity, gas, water sectors. Businesses are probably less affected vs. the business sector as they didn't get as many subsidies but still my electricity bills went up 300% overnight. I do agree they were too low to begin with and artificially low due to the government's meddling with the utility companies.
But you still have to factor in all of these increased costs due to the inflation in some of these countries in South America. Brazil had a change in law increasing the salary and they probably can implement some more mandatory raises which make it very difficult to control your bottom line and expenses heading into the future.
Some other countries in Latin America are the same way. So you have to keep these kinds of things in mind when investing in a company which has all it's activities in Latin America.
You are exactly right. You are one of the few people here that has an idea about risk, other than xstacyman. These other people are braindead and they should never be in the markets at all. They have no idea what they are doing.
I see your EEG has flatlined. It's no secret ARCO is long term. You're not going to make a bundle in a week. Lamentably, the trolls have arrived. If you don't like the stock, sell, or don't buy, and just go away. Those of us who are long term, and are willing to hold into the future, aren't listening to you anyway.
But it's not just a matter of "management knowing what it's doing". You can have the most competent of managers and executive staff and Board of Directors.... The thing is countries like Argentina are a beast of it's own. The best and most talented management can't account for run away inflation, internal turmoil and corrupt governments in place.
I've owned and managed very successful companies in South America but you can't imagine how complicated things are in a given country unless you have actually ran a fairly big company in Argentina or other countries in South America.
It's a nightmare. I'm not saying this to scare anyone. I'm just telling it like it is.
My point is you have to account for these uncontrollable things. I think long term ARCO should be fine but still these things that I'm mentioning you have to understand and also factor into the equation.