Future Proof
Argentina’s natural hedge against an artificial tomorrow...
“If you wish to understand what Revolution is, call it Progress; and if you wish to understand what Progress is, call it Tomorrow.”
~ Victor Hugo, Les Misérables (1862)
Joel Bowman with today’s Note From the End of the World: Buenos Aires, Argentina...
How do you “future proof” an investment... a portfolio... an entire economy?
It was a concept we encountered during last week’s inaugural Investing in the End of the World virtual summit.
Eric Fry, with whom we used to work in New York, helping produce The Daily Reckoning (with Bill Bonner) and The Rude Awakening, used it to describe the unique opportunity Argentina presents down here at the End of the World...
The future, at least if the past is anything to go by, ought to arrive right after the present. Of that much we are fairly certain. And yet, it is unlikely to precisely mirror the past, in that it contains within it the seeds of disruption, progress... and outright revolution.
Politically, this may mean throwing off the yoke of 75-years of Peronism, ushering in an era of free markets, sound monetary policy and limited government... the kind of thing Javier Milei is doing in Argentina. Such an approach portends a particular brand of investment opportunity. Here’s Eric:
“I think the Milei miracle, the Milei phenomenon, is really an outlier that belongs to itself and only to itself. It’s in a certain context, yes, but it's so completely different.
“With Milei, you're given an opportunity that's very, very unique. This kind of stuff doesn't come around every day in foreign markets. You don't get such an extreme and potentially powerful and fruitful shift in government policy, economic policy, that could have far-reaching and really, really powerful ramifications. You don't get that very often. So I think you want to be involved as an investor and you want to grab the low hanging fruit, whatever that is.
“Maybe it’s just an ETF. In certain environments, I remember times in the past, I invested in a Brazilian ETF and made 10 times my money. You get involved at the right time. You don't need to be super clever. You just need to be in the right spot. So at this stage of the game, I think you can commit some capital to just grabbing low-hanging fruit, just buy the country.
“You can also make more aggressive investments of the sort that Rick and Byron are talking about.”
Indeed, during the course of our in-depth, 2-hour discussion, Rick and Byron mentioned perhaps a dozen stocks between them... including many plays on Argentina’s vast endowment of natural resources.
From its fisheries in the south to abundant deposits of gold, silver and copper... from lithium mines in the northwest, in the so-called “lithium triangle” bordering Chile and Bolivia, to the gargantuan Vaca Muerta oil field, which Rick called “an absolute freak” and “maybe the best effectively undeveloped shale basin in the world,” there were plenty of angles to leverage.
[NB: Notes members can access the entire video-audio recording here, including a full transcript. If you’re not already enjoying the benefits of full Notes membership, feel free to unlock all our resources by joining us here:
Real Growth
Argentina’s newly adopted political trajectory, one that favors free markets over central planning, private cooperation over public coercion and liberty over larceny, bodes well for its future. Already, over the past 12 months, we’ve seen the country’s “risk rating,” a measure that investors monitor to gauge the level of risk involved in deploying capital here, has fallen precipitously... from around 3,000 points when Milei took office... to under 600 today. (A lower reading indicates less perceived risk.)
Moreover, as the Argentine economy emerges from seven consecutive quarters of recession, which it officially exited in Q3 under Milei’s stewardship, it is forecast to lead the LATAM countries over the next year, with economic growth expected to come in at nearly double that of the United States.
Future Proof
But it’s more in the practical – as opposed to the purely political – where the concept of “future proofing” really comes to the fore. During the maelstrom of creative destruction promised by the AI revolution, for example, countries that are rich in natural resources stand to enjoy a certain measure of inbuilt resilience.
From sales and services to healthcare, education, customer service, retail, marketing, finance and many, many sectors besides, our algorithmic servants/overlords are poised to relieve millions of error-prone humans from our ranks in the great quotidian march known as “employment.”
And yet, we know of no algorithm that promises to replace the basic biological need for food, water and shelter.
We may ask AI to help us search for the nearest grocery store, or to come up with a new recipe based on our horoscope or that of our favorite celebrity chef, or turn our shopping list into a Shakespearean sonnet... but we still require the actual food itself, along with the component parts of the machines that will farm, store and transport it to our plate, not to mention the immense amount of energy required to power the whole process. As Eric explained...
“Everybody is talking about AI. What's AI going to do? It'll destroy things. It'll create things. Just the classic creative destruction, right? I think that Argentina is in a very unique place to be future-proof from AI for a long while. It has all the assets that Rick and Byron have been talking about.
“There's tremendous natural wealth. And there is no AI machine learning algorithm or anything that's going to replace the need for wheat, soybeans, beef, you name it. So I like Argentina writ large as a future-proof play and also as just a very, very unique situation that is not really part and parcel of the rest of the Americas.”
The more “artificial” the world goes, in other words, the more valuable “real stuff” will become. And this land at the End of the World has in abundance all the “stuff” required to build the future, be it real, artificial or some strange compound of them both.
We’ll return to our regular musings next week, dear reader...
In the meantime, thanks to all our Members who made last week’s Investing in the End of the World virtual summit such a success.
We aim to host these events on a quarterly basis going forward, which means more guests, more insights and more Notes from the End of the World.
Cheers,
Joel Bowman
P.S. Might unpopular ideas – free markets, civil liberties, common sense – be enjoying a resurgence… even in the woke West?
Might thoughtful individuals be ready to ditch the ‘statist quo’ in favor of a more peaceful, voluntary existence?
Might citizens be ready to shrug off the illusion of choice proffered by their would-be political leaders and their puerile porters in the mainstream press?
Such a reality might be closer than you think. Already, millions of people in hundreds of countries have tuned out of state propaganda, meant only to divide, conquer and impoverish people.
How do we know?
Well, we don’t… but we have reason to be cautiously optimistic. Even these humble Notes now reach dear readers in all 50 states across the US… and in 135 countries around the world. Not bad, given that we only just began the project this year.
Of course, the ideas of freedom, liberty and independence are not going to spread themselves. And that’s where our dear members come in. Thanks to their support, we are able to remain fully independent… which means no advertisements, no bosses and no bias.
Just free markets, free minds and free people… all the time.
If you’d like to support our work and join the growing community of folks interested in these lately resurgent ideas, please consider becoming a Notes member today. Cheers ~ JB
I love all of your content, it's a bargain and highly interesting. Glad I subscribed.
It's not your fault if contributors use annoying grammar, but I'm seeing this everywhere now XYZ "is very, very unique." Unique is a superlative and can't logically manage a modifier like very, highly, quite or super. Miss Button, my 12th grade English teacher, if she were still alive, would be appalled by such mistakes even in national newspapers.
So enjoyed the conference. Very frustrating though not to be able to go back or fast forward. Maybe because I watched on my iPad….when will the transcript be available?