Portfolio +27.7% YTD, 2.4x the market since inception. TSM’s 2025 story just got stronger and valuation higher. Argentina’s latest downturn shows why waiting for conviction often pays best.
Regarding the Argentina update, your timing on exiting and preparing for re-entry is truly insightful. It makes me wonder how you model thise cyclical market resets; is it more pattern recognition or a very deep analysis of current fundamentals that drives such precise calls?
To be honest the timing this time was pure luck, not always it is so precise (in the cycle previous to that one I left lots of money on the table when I exited YPF too early as I explained in the SUPV article).
But I tend to enter when I start hearing the first couple of good news after a down cycle (so for example for the last cycle, inflation was already dropping for more than a couple of periods) and the market started recovering (in the last cycle I entered when the Argentine market was +100% up from when Milei started his administration).
I got out :
1. when the valuations were at its highest and comparable to developed countries.
2. Also, the sentiment to invest in Argentina was at its highest.
3. I heard from locals (I still have friends in Argentina I call from time to time) that Milei was losing support from the low-middle/middle class as it was getting hard getting to the end of the month and unemployment was increasing (later it was confirmed as unemployment in Q1 2025 was 7.9% vs 6.4% for Q4 2024)
So for this cycle I will be watching for similar indicators. Recovery in the merval and indicators such as unemployment.
Regarding the Argentina update, your timing on exiting and preparing for re-entry is truly insightful. It makes me wonder how you model thise cyclical market resets; is it more pattern recognition or a very deep analysis of current fundamentals that drives such precise calls?
To be honest the timing this time was pure luck, not always it is so precise (in the cycle previous to that one I left lots of money on the table when I exited YPF too early as I explained in the SUPV article).
But I tend to enter when I start hearing the first couple of good news after a down cycle (so for example for the last cycle, inflation was already dropping for more than a couple of periods) and the market started recovering (in the last cycle I entered when the Argentine market was +100% up from when Milei started his administration).
I got out :
1. when the valuations were at its highest and comparable to developed countries.
2. Also, the sentiment to invest in Argentina was at its highest.
3. I heard from locals (I still have friends in Argentina I call from time to time) that Milei was losing support from the low-middle/middle class as it was getting hard getting to the end of the month and unemployment was increasing (later it was confirmed as unemployment in Q1 2025 was 7.9% vs 6.4% for Q4 2024)
So for this cycle I will be watching for similar indicators. Recovery in the merval and indicators such as unemployment.
Very likely I will miss the first run up.