Crying for Argentina?
I'm not crying for Argentina because I have no investments there. However, if you are invested in a company with ties to Argentina it is just a matter of time before you'll feel some pain. There is much to like about Argentina including its natural resources, late night dinners with steak and wine, the tango, and wonderful places like Iguazu Falls and the Perito Moreno Glacier.
Beneath the sophisticated European exterior lies some very messy politics which impact all levels of business. My first hint of the risks of doing business in Argentina came while I was visiting the place in the summer of 2010. The papers were running headlines of the nation's third largest Internet service provider, Fibertel, was having its license canceled. Wow! I thought. I even brought the paper home with me (my pack rat issues will follow me to my grave) as a reminder to not invest in the place.
I was recently re-reminded of the challenges of trying to make money in Argentina during an energy panel discussion at the Calgary Energy and Resource Investment Conference in Calgary. Casey Research analyst, Marin Katusa put it bluntly - Argentina is where dreams go to die.
Argentina has a very nice developing shale oil play with "billions and billions" of barrels of oil to be had. Except for a few details.
From David Pescod's April 4th Stocktalk Late Edition...
The consequences of being in Kirchner's crosshairs are dire indeed. Headlines like YPF Slumps on Loss of Most Productive Field in Argentina (source) give you a clue as to the future prospects for Canadian juniors like Americas Petrogas (BOE.V), Madalena Ventures (MVN.V), Crown Point Ventures (CWV.V), Azabache Energy (AZA.V), and ArPetrol Ltd. (RPT.V). These companies could have substantial gains in the short term but in the background, a game of musical chairs is going on and nobody can predict when the music will stop.