of babies are thrown out with the bathwater. Fundamentally solid companies are sold along with those that deserve to plummet... And valuations, along with share prices, fall to multidecade lows. It’s sell first, ask questions later. So I recently visited Buenos Aires, Argentina’s capital, to find those babies. Because if history is any guide, there’s enormous opportunity in Argentina’s crisis. GROWN-UPS AND PERONISTS Cycles of crises have been behind a long, slow fall from grace for a country that just a century ago was one of the 10 richest countries in the world. In the early 1900s, the average Argentine made more money than people in France, Germany, or Spain... and
When a stock market collapses like that, a lot of babies are thrown out with the bathwater. four times more than his neighbors in Brazil. But it’s been downhill since around 1930. As of last year, GDP per capita in Argentina – one way of measuring economic output per person – was one-quarter that of Germany (and close to one-sixth that of the U.S.), and only 25% ahead of Brazil. With this year’s 50% drop in the Argentine peso relative to the U.S. dollar, Argentines are a lot poorer. What’s Argentina’s problem? It’s a question that Argentines debate endlessly over Malbec or cappuccinos in sidewalk cafes of Buenos Aires. For decades, Argentina has zigzagged between toxically populist politics and
By Kim Iskyan
American Consequences
55
Made with FlippingBook - professional solution for displaying marketing and sales documents online