Chit Chat Stocks - Ian Bezek Returns To Talk Argentinian, Chilean, and Colombian Stocks + The Return of Free Markets In Latin America?

Episode Date: November 19, 2025

On this episode of Chit Chat Stocks, Brett and Ryan speak with recurring guest and Latin American correspondent Ian Bezek of Ian's Insider Corner about why he is interested in Argentinian, Chilean, and Colombian stocks at the moment. We discuss: (00:00) Introduction (02:38) Argentina's Economic Landscape Post-Election (05:02) Currency Challenges and Economic Recovery in Argentina (07:39) Political Stability and Free Market Prospects in Argentina (10:43) Spotlight on Corporacion America Airports (CAAP) (21:16) Exploring Other Investment Opportunities in Argentina (23:42) Political Climate and Investment Outlook in Chile (27:29) Investment Strategies in Chile's Resource Sector (29:18) Investing in Latin American Banks (32:11) Political Catalysts and Industry Focus (33:39) Challenges in Trading Colombian Stocks (35:52) Colombian Market Recovery (42:55) Understanding Currency Valuation (47:07) The Impact of Currency Valuation on Argentina (49:48) Future Political Trends in Latin America (53:52) Opportunities in Latin American Markets Ian's newsletter: https://ianbezek.substack.com/ ***************************************************** Sign up for our stock research service, Emerging Moats: emergingmoats.com  ********************************************************************* Chit Chat Stocks is presented by Interactive Brokers. Get professional pricing, global access, and premier technology with the best brokerage for investors today:  https://www.interactivebrokers.com/  Interactive Brokers is a member of SIPC.  ********************************************************************* Fiscal.ai is building the future of financial data. With custom charts, AI-generated research reports, and endless analytical tools, you can get up to speed on any stock around the globe. All for a reasonable price.  Use our LINK and get 15% off any premium plan: ⁠https://fiscal.ai/chitchat  ********************************************************************* Portseido is your best portfolio tracking & reporting solution that helps you track all investments in one place. We personally use the software to track our portfolio returns across brokerage accounts. Try it for free today: https://portseido.com/?fpr=ryan63  ********************************************************************* Disclosure: Chit Chat Stocks hosts and guests are not financial advisors, and nothing they say on this show is formal advice or a recommendation. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to Chit Chat Stocks. On this show, hosts Ryan Henderson and Brett Schaefer analyze businesses and riff on the world of investing. As a quick reminder, Chit Chat Stocks is a CCM Media Group podcast. Anything discussed on Chit Chat Stocks by Ryan, Brett, or any other podcast guest is not formal advice or recommendation. Now, please enjoy this episode. Welcome into Chit Chat Stocks, a podcast to help you find your next great investment. Today we have on Ian Bezek from Ian's Insider Corner, a recurring guest and what we call lovingly our Latin American correspondent. We're going to talk about today Argentina, Chile, and Colombia, how to invest in these regions, the political developments going on there, why some of the stocks have been doing well, poorly, and what are the investing opportunities

in these regions, as well as Latin America as a whole, which has done quite well over the last year or so. But first, Ian, let's talk broadly. How do elections and political developments impact how you invest in Latin America? Yeah, first of all, thanks for having me back on the show. It's always a pleasure. Looking forward to this discussion. Yeah, I think it's a great introduction question. I was actually looking at some of my old writing and tweets recently. I remember that as early as early 2024, for example, I was calling out the Colombian stocks were kind of making record earnings, record revenues. The underlying economy was doing very well, yet no one wanted to buy those companies. They were just off the radar.

The government was socialist. So this is just something people aren't looking at. but at the same time those companies continue to generate shareholder value they're executing on their business plans i think an election gives you a catalyst like it'll be on the front page of the economist on the wall street journal kind of it's the one time every four years when a hedge fund manager thinks about columbia thinks about brazil or whatnot so you get kind of a chance to get a re-rating because the numbers have kept changing the earnings have kept going up and now you have kind of the world's attention on that market for that a brief period of time and that's when you get a lot of the returns from these markets because it's just that one moment

of visibility. Okay. We're going to talk about a few countries here throughout the episode, but let's kick things off with Argentina. Argentina just had their midterm elections and the results were very favorable for Millet's party. What do you think the result means for Argentine stocks and maybe just the economy in general? Yeah. So Millet was elected in 2023 and there was initially a ton of investor excitement. I think the local index roughly tripled, but some doubts came in earlier this year. People were talking about Argentina running out of money,

that they would need bailout from the IMF or so on. And ultimately they did get an aid package from the US. And so a lot of people had thought that that meant that his economic reforms had failed. So that's why these midterm elections that happened last month were so important because they showed that voters still stood behind Malay, We're willing to give him more opportunity to keep reforming the economy.

The GDP numbers have been very good, more than 5% growth this year. He's gotten inflation down from 300% to 25%. Obviously, 25% is still way too high, but big step in the right direction. Big jump in private sector employment. So, yeah, I think the economy is on a good path. A lot more needs to be done, but I'd say I'd give him an A for his efforts so far. And it looks like voters agree with that. And then now he's got another couple of years to keep making reforms.

Obviously, that should be constructive for the stock market. And also having the favored trade status with the U.S., you've got kind of the Argentina-U.S. trade deal in a time when the U.S. is putting tariffs on many other competitors. That's very beneficial to Argentina for their exports. So, yeah, I remain bullish, upbeat on Argentina. Yeah, I think it's going to be a good trade for the next, call it, two years. the last few months or maybe just the last few weeks just for reference for recording this in

early november for anyone listening down the line there was the election as you mentioned but there was also a lot of talk about just destabilization with the currency there was the emergency currency swap that the united states government in there um questions we had before the show was a lot of the line, you know, from listeners was, well, is the recovery in Argentina actually happening? And this is kind of turning into a two-parter question, but what was the problem with the currency? And what do you think would be something you're looking for from an investment perspective to be more confident in the currency risk with that market? And then second, is the economy actually doing well or are is just a lot of news yeah yeah it's good yeah good question and

yeah i'll take that in two parts first on the currency i think the one the one area where malay made a mistake was in terms of he tried to keep a peg or at least to closely uh regulate the exchange rate between the peso and the dollar and i think he set the rate a little bit too strong in terms of having an overvalued peso and in doing so a lot of people were deciding to move their money out of pesos into dollars so you had kind of speculative people betting that the currency was going to get devalued but i would say that that's divorced from kind of the real strength of the underlying economy like that's monetary policy that's not like the actual gdp was is doing well inflation's come way down private sector investment flows are very strong

people say oh the economy is not that good particularly in buenos aires but he fired like 20 of the government so that's a lot of state employees that are now looking for work or need to be retrained or so so obviously you need some time for that to kind of shift and you need to have capital as long enough for private employers particularly multinationals to say oh i want to open stores in argentina i want to build a branch here i can do manufacturing here you don't get that in 12 months. So yeah, I think it's a gradual process. But yeah, I think the underlying economy is doing well. If I were him, perfect world, I don't think he would set the exchange rate that high. I prefer free floating exchange rates. I do think the peso is a little bit overvalued.

Hopefully now that he's won the election, he can kind of let that loose a little bit more. I know some of his policy advisors even are urging that. But it's up to him in terms of how he wants to take the currency but yeah i think ideal world it should devalue maybe 20 from here i don't think that undoes like the bull thesis for the for the stocks and you you mentioned the fact that you know they had this huge um i forget how to pronounce the old regimes uh political party peronist i think is is what it's called they had just a massive amount of government employees and state-run stuff. And do you think the fact that Malay's party, people aligned with him, won big at the recent election, despite the fact that all of these workers were fired and maybe

disillusioned with them? Because, I mean, frankly, if you lose your job, you're not going to be happy with the party that fired you. Do you think that is a good indicator that Argentina and knock on wood, never say never, is finally done with this anti-free market stuff? I think it's too early to declare permanent victory on that front. Argentina's had generally bad governance and economic management since the 1950s. That said, there was a whole decade from, I think it was 1989 to 2001, that they had very free market pro-business measures. So that was 12 years where they'd appeared to have finally gotten kind of more on track. And then even that ultimately went off the rails once again.

I think at the heart of it you have a very you have a different electorate than the rest of Latin America most people are very European in nature and thinking like I've stayed at various people's houses in Argentina and everyone can trace their family tree back to like 1820 in France or in Italy so it's a very different culture from like Colombia or Mexico or whatnot so I think there's a lot of sense of like we're different from the rest of Latin America we deserve kind of European style socialism Scandinavian style policies but there's not really the tax base in Argentina to give you the same government benefits that you could get in Sweden. So I'm not sure if voters have really made peace with that factor. They're just so

frustrated by the recent 300% hyperinflation that they said, we're going to give this libertarian guy a shot. So you mentioned on the Argentinian peso potentially being overvalued, and part of that is the peg to the US dollar. How would you go about, this might be a complicated question, But how do you go about unwinding a peg to the U.S. dollar if you are Argentina? Is that like you just kind of bite the bullet and one day your currency drops by 20 percent? Is it like or is there a way to sort of smooth out that process? Yeah, to be clear, it hasn't been a hard peg. There's been some fluctuations since Malay has been in power.

But just kind of the central bank will, if it starts dropping quickly, the central bank will intervene to smooth it out. and then Millet talks up the value of the peso a lot and he's like if you bet against me you're going to lose money that sort of stuff so yeah I think you could just kind of cut back the rhetoric a little bit and I mean he's a libertarian

he should want the market to set a free clearing price rather than intervening in my view but it's not like it's like a one to one peg where the next day would be two to one and everyone loses all their savings I don't think the peso is like dramatically overvalued i think you could get there without i mean it's like 1500 now and i

think it should be like 1800 so we're not talking like a huge move just stop intervening in the market for a few months and i think it would get there on its own okay let's talk a little more stock specific one company you've written about uh several times on your blog is corpora corporacion american airports cap for short i think most people just call it cap um what do you think uh a the elections imply for cap um and then thoughts on cap generally after this post earnings bump yeah so malay has been very good for cap which was to be expected he formerly was the chief economist for corporation america which is the parent company of the airport company so deregulation was near and dear to him since taking office he's broken up argentina to

state-run airline as ridiculous as that sounds in the year 2025 but he broke that up he's let foreign airlines come in to compete he's let the budget airlines pretty much operate however they want without restriction so you have far more local competition lower prices so you get more more flights obviously um and then just yeah more broadly anything that attracts more foreign capital and particularly more foreign investors for more foreign businessmen coming through to to visit the region good for air traffic good for cargo cargo business is up a lot now that kind of more is going on with the economy um that's it the the company is 55 argentine airports 45 outside of argentina other major countries include italy and brazil so there's diversification

there i think people are viewing it as just argentina because it's trading at a ridiculously low EV to EBITDA multiple compared to peers. It's like, is this really that much? Historically, the Mexican airports trade at like 12, 13 times EBITDA, and this is traded at six times EBITDA. It's like, is this really only worth half of what Mexico, because Mexico is not a pristine credit rate. I mean, Mexico is more trustworthy than Argentina, but it's hardly the world's most trustworthy

country. So does CAP deserve to trade at half the multiple of the Mexican airports? I didn't think so. So particularly when you've got assets like in Italy, they're worth more. So, yeah, I think this has been a business that's been slept on. Now people are starting to wake up to it, although it's still cheap on an EBITDA earnings basis compared to peers. Yeah, and I think, and correct me if I'm wrong, I don't have the number directly in front of me. After the jump, it's closer to eight times earnings, EBITDA, EBITDA.

So it still hasn't closed the gap. There's still significant room for those Mexican airports. we had a question and this one is a bit more speculative but you follow the airport market fairly closely so you might have a better read on me than on it than me what and this is a listener question what uh countries do you think that cap corporation should enter next or if at all um i think that would be like my list of my fantasy list like if i'm building a fantasy football yeah sure yeah fantasy list is perfectly i was gonna say i could do that but but how these come about is that generally uh an airport operator or like an airport airport a government

will say we want to sell this airport because we need money or they're saying we want to build a new airport we don't have the money so we're going if you build the airport for us then you can run the concession for it and so usually it's not like cap is just going out and saying we'd like to buy airports in costa rica today that's not usually how it goes it'll be like whatever some country needs liquidity or they need a new runway or something so they'll say hey private operators we're gonna have an auction who wants to bid and so cap has been more aggressive in terms of bidding than most of its peers which is how they have airports in six countries and from what i understand they're very close to signing a deal for montenegro which would be seven there's also

talk of uh iraq oddly enough uh so uh yeah it could be moving to as many as eight countries within the next call it six months but i don't think anyone would say montenegro or iraq would be like our ideal countries to to invest in but the countries that had bids had bidding processes open for for new airports uh but yeah i mean i like the idea of mostly investing in latin america I think you get a better valuation for having some sort of theme or kind of coherent business plan. But caps management appears to be in the mold. If we want to have as many airports as possible, anywhere where we can get double-digit IRRs, we'll go there. So I think you just kind of accept that they're going to, whether it's Africa, whether it's the Middle East,

they'll go anywhere where there's airports where they can get like those 15% IRRs. yeah and you'll we're not going to get into it on this podcast and you have a lot more details on your newsletter but the contracts they have especially in argentina seem very attractive from one hedging the currency risk and getting kind of that guaranteed return on invested capital so it's a good business i think uh yeah just very briefly to make your point there the argentine airports uh all their international travelers they pay 57 us dollars so no argentine peso risk and the government has given them a 16 guaranteed irr on any money they put into like they expanded the buenos aires airport i think they spent 150 million on it a few years ago

and they get 16 guaranteed return on on that investment from the government so if there's not enough passengers they get to raise rates so the government has to make good like extending the contract life in some way giving them that assured return i spoke to ir a couple of years ago. The question I always get is, why don't they pay a dividend? He's like, well, we can reinvest your capital for you at 16%. Why do you want us to pay a dividend? It's a good question, right? Yeah, that is quite a good business. I guess the last question on cap, we see the stock price is up and I'm looking at fiscal AI right now. Total, this is just the price, not even total return. I don't even know if they pay a dividend. It's up close to 800% in the last five years.

it's done quite well. It's 54% annual return. You've held it for a long time. I think it's been a 10-bagger for you, or if not close to it. What a lot of people look at is, all right, the stock's close to an all-time high. The Argentina thematic stuff, people say it might be running out of legs. We've seen a huge bump from that. What is the upside? Maybe I can ask you differently. How are you looking at the investment over the next few years? What would you look forward to either buy sell or add to your position yeah i mean it's a fair point i think the day we're recording this it looks like it's gonna trade and close at an all-time high so you can certainly argue the moves already played out why not uh cash out up here i'd say it's still

trading like seven eight times ebita so still a considerable discount appears i think if you went through a competitive bidding process to sell off their airports you would get i don't know between 12 and 15 times EBITDA for the airports depending on which country which asset so I think this is still selling well below what it would be valued at to any other buyer the company used to be fairly levered it's like three times levered during the pandemic now it's down to one times leverage management has said they actually want more leverage but they just haven't been able to deploy capital because they lost out on a few bids I think we'll either see a dividend or buyback or something because uh management is not i don't think they're gonna just let cash build up forever

so i think you'll see actions to unlock shareholder value um and then traffic is actually going the fastest of i believe all the publicly traded airport operators at the moment they just reported like 15 growth in argentina last quarter whereas everyone else is pretty much in the single digits now so i think the argentine growth story still has legs it's their largest business yeah so i think there's still room for it to relatively outperform in the longer term. I'm a bull on global aviation. I have a ton of emerging market people that, consumers that haven't flown or have only flown a couple of times. I think the market can still grow a lot. And so airports in countries like Brazil and Argentina, I think there's still a long runway for more growth.

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Interactive Brokers is a member of SIPC. Is that traffic growth primarily tourism or business travel or do they even split it out? They don't say directly. And for Argentina, it's a bit harder to distinguish because Buenos Aires is both the main business airport and the main tourism airport it's not like in Mexico you can look at Cancun and Puerto Vallarta to see the tourism traffic and then like Mexico City to see the business traffic for Argentina it's harder to say um that's why I think a lot of the growth is from like I was talking about the new airlines that have come in there's been a bunch of discount like budget carriers like carriers from Peru and Colombia and all that have started adding direct flights to

argentina now that they've deregulated so i think a lot of that is kind of the more price sensitive customers that wouldn't have paid uh full freight for the state-run airline before that are now saying oh argentina's affordable now yeah and you can maybe envision a world where uh what happened in mexico over the last 10 years with the valeris's of the world could happen in the argentina or south south america region um or would it be a has a specific airline shown up or is it one of the existing ones like valeris that are now operating in the country there's one domestic one in argentina i think it's called fly bondi but name could be wrong but then there's one called jet smart in chile that's just grown like a weed across latin america and obviously chile

and argentina are neighbors so that's will be a big growth market for them as well yeah it makes perfect sense all right let's finish out with argentina we've talked about the airport operator but there's obviously more than just one business in that country. You've written about a lot of different stocks that you've invested in along with this thematic recovery within the country. What are some other stocks that are of interest that you followed? Pretty much an open-ended question. What other stocks do you want to talk about from Argentina?

Sure. The other names I've been involved in were the banks. Well, are the banks. I still own them. Just because I think it's the easiest way. if you're wanting to make a bet specifically on kind of the politics and just who's the most exposed to good or bad political developments in Argentina, I think the banks, the domestic banks are the clearest play. And so I'd gotten pretty aggressively involved in group of Galicia to go to GGAL before the election.

And then after there was kind of the panic in September, I added some call options on that as well. And then basically that worked out nicely, but I think there's more upside. that stock was trading at 75 in february like back when malay was riding high and then it traded down to 25 in september which i thought was absurd it's trading like 20 before malay won so you're only getting like five dollars of credit for the the past two years of economic progress that malay had made so like everyone had just thrown in the towel at the midterm elections now it's traded back up to like 55 which is good definite progress but it was 75 back when people thought malay was

doing well before now valet has a fresh mandate and he has like direct us financial assistance so i think the banks can trade back to the 52 week highs ggal to 75 and some of the other like bbar for example that one can go back to 25 i think it's like 16 now so i think there's still some some juice on the argentine bank trades is there any any other sectors that you have interest of in argentina or is it mainly airport operator plus these financial institutions uh there's quite a few argentine companies listed in new york so if you like the telecoms or utilities or whatever i mean there's other names there but i personally have spent 95 percent of my attention on the airports and the banks okay let's talk a country that may be on its way to

having its own malay show up you can correct me if i'm wrong in your thoughts here but it's chile the argentinian neighbor that was recently mentioned here let's just kick things off with the current political situation what do you see on the ground and i know they actually have part of the election coming up um after we record but before this is released so you know give context on that what's the timeline for the elections and how things are developing politically in that market yeah so you currently have a left-wing government that's been in power since 2021 that president bork had tied his popularity kind of his fate to a constitutional reform amendment which was supposed to get rid of the penis area constitution and replace it with a

much more liberal inclusive constitution that constitution went to a referendum in front of voters and the voters rejected it almost two to one that kind of tanked uh boric since he'd established like that was his his main policy proposal so his government has not really done much of anything since then so people have been expecting kind of power to swing back to the right it's just kind of a question of how far right it would go but yeah now we've gotten to election day the first the chile has a system where unless you get 50 of the vote in the first round then it goes of the top two candidates and they have a runoff so the first round is november no one is going to win in the first round so then the top two candidates will face off in december there's

a communist who will be one of the two candidates probably um because she's the only left-wing candidate running so kind of all the support from anyone left of center is behind her that said she's only pulling at like 30 even though the left had a primary to put all of their support behind one candidate so the betting market says she has virtually no chance of winning but she will be one of the candidates in the runoff and then on the right the most likely candidate you will already know this by the time you're listening to this but at the time i'm talking the most likely candidate is a guy named cast who was the runner-up in 2021 he has family members that were involved in the pinochet government he said that they did good stuff were unfairly maligned so like

very uh muscular right-wing pro-business guy uh and he said like voters you got it wrong in 2021 but you've got the second chance to do the right thing get the country back on track it's a message that's resonated fairly well he's been leading guy on the right then kind of in third place is a guy who's even farther to the right uh libertarian named kaiser uh who got a start as a ron paul influencer uh bringing ron paul's message on youtube to latin america and somehow he's been able to springboard this into into national popularity i watched the presidential debate there i didn't think he came off as like a polished speaker really all that charismatic so i'd be a little bit surprised if he managed to to get the spot in the runoff but

seems like either way the right wing is either going to put up cast who is pretty far right or a libertarian so i think either way people are going to be happy from a pro-business pro-investor perspective and cast has specifically said like the malay is doing a lot of stuff right and he wants to implement similar style policies and in chile so you could get a similar trade uh smaller scope because chile's economy wasn't nearly as bad it wasn't starting from such a low point as argentina but you could get a similar dynamic in terms of a really big change election in chile yeah i was going to ask about the how the local economy is doing um i get it is a really resource-rich country. You have copper and lithium that I don't know what percentage of

the economy it is, but it is a large part of it. What is the upside left in Chile? I know some of the stocks have done quite well. How are you positioning your portfolio for this election or any sort of post-reaction there? Is it playing the banking sector? Is it playing the copper and lithium and commodity sector how are you looking at it and how where would you invest or what areas you're investing in in chile yeah i primarily own the largest bank banco de chile bch not bitcoin cash uh but bank of chile um and also the etf so ech which is mostly involved in the domestic economy but you get some of the copper and lithium exposure there actually i think the are just holding is the lithium company um i'm not involved in any of the mining stocks directly

i think that's a sector that really rewards specialized knowledge rather than as a generalist something i generally try to steer clear of it's like mining and biotech and like oil services things i just don't want to deal with myself uh more power to people that like those i think july will be very open to business over the next four years for resource investors but i don't have a strong opinion on those names personally but obviously a rising tide will lift all boats uh as you mentioned copper is very important to the economy the state still has a huge profit share kind of arrangement it gets a ton of the profits from copper in chile and then it uses that to fund kind of the state budget a lot of um a lot of investment other sectors like chile is now one

of the leading uh exporters of fish for example the salmon industry and that was all funded like setting that up with state funds that they got from the copper and so kind of they've used that to try to escape, what is it, Dutch disease? Like the idea that you just have all your money come from natural resources. And then if that money runs out, like you run into trouble. So I think the state's done a great job

of using the copper resources to diversify the economy. So obviously as an investor in Chile, you want copper to keep going up. Love to see it at five, $6. Yeah, I'm not trading that directly. I think the bank will get plenty more business. There'll be more lending to do

as there's just more money flowing around the economy in general. The, yeah, it seems very Nordic, I guess, in the way they're running it there. And the theme I'm getting, Argentina investing in the banks, Chile investing in the bank, Colombia, I know that you've invested, I think, talked about on this podcast before, Banco de, what's it called, Banco Colombia. But I also know that you are interested in Nubank, new holdings. So how do you think about that? And I know they're not operating in Chile or Argentina at the moment, but how do you think about those long-term versus Nubank? Is it kind of a, I want both sides of the barbell here, the legacy player and the potential

disruptor? How are you looking at that as a shareholder there as well? Yeah, I think it's a very fair question from my understanding. Yeah, Nubank is present here in Colombia, not present in Chile and Argentina, like you mentioned. Um, yeah, from, from the user experience I see in Chile, Chile in Columbia, uh, where I live, I see a lot of younger people using new bank, I guess their average, uh, uh, account size is, I don't know, maybe one fifth of the size of the accounts that like

van Columbia or the other established banks. Um, but I think that'll grow tremendously over time. If your average customer is like 25 or 30, somebody just out of college getting their first job over 10 or 20 years. You're going to have a lot more spending power. New over time wants to be your brokerage, your life insurance, all that sort of stuff. And so, yeah, I think there's a tremendous runway for new to grow, but I don't think that makes the traditional banks obsolete because most of your capital in a country like Columbia is with the eldest generation. It passes on when people die. And I don't think your eldest generation is moving their money out

of Bank Columbia anytime soon. So when you look at these banks that are trading at like five or six times earnings like is the durability of this earning stream well beyond the five or six years that i need to get 100 of my capital back from the earnings yes i think so so like 20 years from now are they losing major market share to a new bank and other fintechs probably is it something i think you need to be worried about over the next election cycle or two no i think the the banks keep working for for if you just want juice to the political trade right i mean And even in the United States, SoFi steals deposits, but does Bank of America still have a ton of deposits? Yes, and they're still way, way, way larger than that company.

Exactly. Good example. I guess I have a follow-up question here. So when you find a political situation in sort of a new country when you haven't studied as much or whatever, something that you think is like a positive catalyst for the equities in that country, are there specific industries? or businesses that you look for first is there like it sounds like banking is kind of a recurring theme are there other industries that you know or tend to see direct benefits from positive political developments um honestly i think banks are just kind of easiest because they tend to be listed in new york they're like having access to u.s capital having a credit rating that having

people can see their audited financials like banking is a trust industry and so as a latin american bank like saying we've been listed on the new york stock exchange for 25 years it gives you a lot of credibility that like if you're a local cement company or a local hardware store or something you don't really care about so i think some of it's just accessibility you have listed banks that are liquid have options uh that sort of stuff in new york um yeah in cases where can trade the local market like mexico uh for example i look for stuff that's not banks i don't own any of the mexican banks at the moment because in that market i've been able to find other stuff that i find more attractive so yes uh please give us access to the local exchanges in chile and

colombia and peru and i will i will go pick more uh off the radar stuff but for now like i can't really i can't really recommend local stocks in colombia because no none of my readers can trade them so yeah the story you've told on the the newsletter about the hurdles you have to go through even as a local to invest in colombian stocks is uh it's quite illuminating on the potential for reforms there first we maybe need to lobby to actually open up these markets before people can actually invest in a lot of these companies sorry i'm i'm uninformed on this and I didn't read that specific edition of your newsletter. Why can't someone trade stocks listed directly on the Colombian exchange?

And like, what are the hurdles? Yeah, for now, none of the U S or major international retail brokers have direct access to the Colombian exchange. I don't think like interactive brokers, for example, has access to many local markets, but I don't think they've never added Columbia and my guess is it's they just don't view it as worth the hassle because they would have to clear Colombian currency and there's only like a dozen stocks that trade more than a few hundred shares a day in Colombia so what's why would you have the hassle of having to buy and

sell and do a depository for another currency where there's such a minimal marketplace so if you want to trade Colombian stocks and you're not like a hedge fund that can get institutional clearing then you have to physically come to Colombia and open an account through one of the banks here and when i did that myself back in 2021 i just went down to a bank columbia office with my wife we want to open a brokerage account they're like are you sure like columbian stocks only go down like we should open a cd for you cds make money the stocks don't like no no we know what we're doing we're professional investors uh they're like okay if you want to but uh just be careful so like even when you go to the bank they're like oh just get a cd like what's wrong

with you if i ever do want to invest in this stock market well uh i guess speaking of colombian stocks i i believe the major e major colombian etf is i'm making sure i get the right ticker here it's uh colo uh that's right yeah they changed it used to be gxg but it changed to colo this year Okay. It is up, according to your latest newsletter, up 132% over the last three years. That might have changed a little bit by the time this comes out. Why are Colombian stocks ripping higher right now and, ironically, probably doing quite a lot better than the CDs that your bank recommended? yeah some of that was just starting from a very depressed valuation between 2013 and i forget if the bottom was 2022 or 2023 but they were down 70 percent in u.s dollar terms and so you get a big drop like that you tend to get a decent recovery when things turn more specifically columbia elected a socialist president in 2022 he was the first socialist in our modern era there was a new

constitution in 1991 that created like the modern democracy in colombia and since that point the government had been conservative for 31 consecutive years and so it kind of had a reputation for being the most free markets pro like tied to the u.s like the u.s ally in the region all that sort of stuff and so the moment colombia elected a socialist everyone was just like oh it's over they're they're going the way of maduro or chavez or castro or whatever uh i talked to so many people in colombia okay fine we have to buy a house in spain or buy a house in miami like it's over for us just look at what happened to the poor venezuelans and then uh petro president petro the socialist took power and it turned out he's not actually a very competent or effective leader

like you're gonna have socialists that have lots of charisma and are able to sway people to their their way of thinking you know or you can have ones who just uh don't and so his approval rating almost immediately fell into the 20s uh his effort to reform the health care system failed his effort to to have much more unions failed just like all of his major reform efforts failed and so pretty early on i was telling people like we're gonna get through this supreme court's independent the central bank's independent congress is against him i just waited out and i think the market's starting to wake up to that we we now have polling that shows the conservatives are doing very well for the elections in may and like the the heir apparent the successor using air quotes to petro

uh is pulling at like 10 so it does not look great for carrying on the socialist legacy here in columbia i think once you turn once you turn the free markets back on once we columbia has been the target of several negative trump tweets and tariff threats and all this here but once columbia is a right-wing president again we'll get the same sort of messages that we're getting from LA and Argentina where Trump led the Colombian presidency again a lot more free trade we're one of the few countries in Latin America that remains very loyal to the U.S. we've not tried to cozy up to China so I think we're well positioned for the current trade environment we're very close to the U.S. as well like we're in South America sure but it's a pretty short

flight from here to Miami pretty short ship transit for cargo so natural out of the U.S. in these times when countries are being forced to pick sides. I think the countries like Argentina that have decided to say we're going to be loyal to the U.S. are getting economic rewards for that. I think Colombia is going to benefit from that next year as well. Sorry, long answer, but hopefully I answered your question. No, very illuminating.

And you can just say the banks if you want, but what stocks are you looking at in Colombia? And I know there's really only a few, although one grocery store, as I remember, that you can actually invest in as a foreign investor. That includes all your investments too, stocks, ETFs, and even crypto, if that's your thing. You no longer have to guess what your returns are. With Port Sido, you can find out in minutes how your returns stack up versus the market. And that includes a dividend tracking dashboard and even tracking of short positions.

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yeah the banks are the most obvious play although echo patrol the state-run oil company is listed in new york as well i think that's gonna move a lot there's a major problem now is that oil is only at 60 a barrel so that's not great uh i think that was trading at 25 bucks prior to petro getting elected the irony that a guy named petro is the most anti-oil president in south america but i think once he's gone um i think echo patrol probably could double from where it's trading now so that's something other than the banks there's also a company that makes uh glass and solar panels uh glass primarily for residential condos and offices and so on called techno glass that thing's gotten beaten up over the past year um just people are worried about new new builds

in the US. They do most of their sales in Florida and in places where there's Spanish-speaking contractors because they just buy from their friends back here in Columbia. So I think there's been a lot of worry around that with the slowdown in the housing market, the big sell-off in Florida real estate prices. But I think that one could bounce back as well, particularly if interest rate cuts keep happening. Okay, let's shift gears a little bit. We've got maybe two more questions And then we had quite a few questions from people on Twitter and Substack. So we can ask those as well. But my first one for you, you mentioned earlier on the show that you think the Argentinian

peso is a little bit overvalued at the moment. How do you determine whether or not you think a foreign currency is undervalued or overvalued before investing? And I guess, how much do you think about that prior to investing in a foreign market? Yeah. Yeah, so to say I'm only speaking about Latin America here, not speaking about other developed markets, like it's I don't really understand how like the Japanese yen or Swiss franc or those sorts of currencies are priced because they're like developed markets with very different fundamentals for Latin America. I mostly think of it through the eyes of a tourist or someone who would live in a country of like, how much is my rent? How much are Ubers? How much, uh,

does day-to-day life stuff cost? How much would a car cost if I wanted to buy a car here? How much would a television cost if I wanted to here? Um, cause that stuff should be fairly similarly priced throughout most of Latin America, at least some more developed countries. It was like Mexico, Brazil, Argentina, Chile, all a fairly similar levels of like human development, so on and so like one of these countries is much more expensive than the other it's usually because their currency is overvalued or similarly if they're way cheaper than the others their currency

is undervalued it's like whenever i i guess it's gone up a little bit but since the pandemic but like iron rule was like any like normal working class restaurant i went to anywhere in latin america for like the last 10 years a beer would be a dollar like did not matter the country so if a beer was 50 cents or a beer was two dollars so it's like something off with either that restaurant or the local economy same like a budget hotel should be like 25 or 30 dollars and that's pretty true wherever i was going and so you're just gonna sense like these prices seem normal high low so like argentina was way cheaper than everyone else under the prior government i think that's why so many people on twitter went there they're like this is amazing like they eat all

their steak dinners and all now they're like 25 steak dinners what's going on it's like oh well the peso is overvalued. So you can just pretty quickly get a gut check for how things are valued. Just thinking through it as from a consumer standpoint, because at the end of the day, the incomes tend to be fairly similar for most of these countries. Everyone sets their minimum wages fairly competitively with each other and so on. How do I think about currency from an investing standpoint? Over time, I think investors tend to worry about it too much, particularly the people that are playing the quarterly earnings game like i don't care if my company beats or misses earnings by two percent because the dollar fluctuated over time that stuff

tends to wash out i would point out the back when trump first got elected in 2016 the mexican peso was trading at 20 to the dollar it's trading at 20 to the dollar today more of it give or take five percent it's been no move in that currency in 10 years i think the first time i traveled in peru it was three and a half to one and now it's like 3.8 to one uh the colombian peso was what 3 000 when i moved here and now it's 3 700 so only 20 depreciation over eight years end of the day not huge moves anymore uh none of these countries have super high inflation but the exception of argentina which is kind of its own special child but yeah there is that yeah as long uh like what are the only two unique economies out there that

people can't really understand are japan and argentina they don't know they're emerging yeah their own separate cases that seem to have just very unique circumstances i think but yeah i was just to finish up what i was just gonna say i think i think people are used to like the 1980s 1990s when these countries would perpetually be running like 20 inflation and you'd be constantly losing all your money due to depreciation but that's not that i mean mexico's averaged a four percent inflation rate over the past decade colombia's averaged a five percent inflation rate over the next decade is there like a smidge higher than the u.s yes but is it enough to lose sleep over and not really okay and let's i guess the listener would maybe have the question

what's the problem for argentina's economy as a whole if their currency is quote-unquote over value like what how does that hurt malay's agenda does it lead to inflation or is the opposite going to lead to inflation what does it you know keep people from investing in manufacturing in the country what is the issue if you're in currencies quote-unquote overvalued okay so two two issues the reason why malay wants the currency to be stronger is he wants to bring down inflation and so if you maintain a stronger currency that means your imports uh will be cheaper like like if you let your currency devalue then you have to pay more of your local money to buy i don't know whatever you can't make in argentina so like iphones or whatever um so you would see higher

inflation if you let the currency devalue and his whole campaign has been i'm going to fix inflation like the previous government cost 300 inflation and under my rule there will be no more inflation So I think he moved too aggressively with like kind of the exchange rate quasi peg and so on to try to claim 0% inflation now, whereas you're not going to get from 300% inflation to 0% inflation in a year. So I think you can get there over three or four years, but take a more gradual approach. But yeah, if he leaves the peso being overvalued, then people are going to keep converting their savings from pesos to dollars, which puts pressure on the treasury and leads to like where the US had to give Argentina a swap line. It also causes problems for your farmers, ranchers, miners, and so on, because they're competing against other countries that have a fairly valued currency. This is actually what undid the Argentine quote-unquote economic revolution in the 1990s, because Brazil next door went bankrupt in 1999. They massively devalued their currency, and Argentina and Brazil both export iron ore.

They both export copper. They both export cattle. It's soybeans. It's like the same export list. And so when Brazil went bust and then devalued like 50% and Argentina was hanging on to their one-to-one peg against the U.S. dollar, like suddenly Argentina was 50% more expensive than Brazil. That's ultimately what caused Argentina to fail. It was just their exporters couldn't sell anymore. So, yeah, I would urge Malay to try to find a stable exchange rate, but one that more accurately reflects their currency's value.

Okay, this question was from Twitter. I'm going to tweak it a little bit. The question was, which Latin American country turns rightward next? I'm going to change it to which Latin American country do you think turns more business friendly and investor friendly next? I know that might correlate with right wing, but from an investor perspective, that's what we care about. I mean, if we're looking at the calendar of elections, Chile comes before Colombia. So Chile has to be the right answer. I think if I were signing betting odds i would say like 80 odds that both chile and colombia go to the right with their next election but chile will settle their presidency in december and colombia's

will be may or june depending on if colombia goes to a runoff um also in the running peru votes next year next april i think um i have no idea who's going to win that i mean they just uh they just got rid of their president like a couple weeks ago and and replaced them with an interim that countries i think they've had seven presidents over the last decade so anyone's guess what happens there so maybe it goes rightward but i mean it was already kind of in the center now so i have no strong view on peru then brazil i'd say that's like 50 50 coin flip on whether that goes back to the right next year or not um there's probably some smaller countries i'm forgetting but i i really only pay attention to the investable ones so like if you want an honorable

mention for bolivia i know they just elected a conservative but you're not investing in bolivia anyway so it's not really relevant to this podcast yeah uh all right big picture question and i i think this is less on like uh investable theme right now of more and more of okay if i'm listening to this podcast should i be trying to learn more about this market and the question is does the idea that south america go goes full capitalist as opposed to all the socialist stuff that was trending five, 10 years ago. Do you think that has legs and has more momentum now that Malay and some of these other things are happening?

Yeah, it's an interesting question. You can make an argument either way. I would say that Bukele was actually the first kind of sign that something different was happening, where you have this very young, very charismatic right-wing guy get elected in El Salvador, and they went from being one of the highest crime countries in the entire world to now being i think the lowest homicide rate in the western hemisphere at least very close i know they're below the u.s

and canada and so a lot of people have copied like boo kelly style like we need to put more people in jail have more more police budgets less tolerance for crime so so that's sort of like right-wing uh governance in terms of crime and on kind of social stuff that is spread throughout the region i think that's probably not going anywhere um but from like the economic like are we going to have like austrian economics and libertarians getting elected everywhere i kind of doubt it i think a lot of the the right-wing tide was just a kind of coincidence that it was mostly left-wingers in power when the pandemic happened and then throughout the world you had kind of a rejection of everyone who was in power during the pandemic uh so i think that's kind of

played well just in terms of how the timings went um and to be frank they're just with the commodity prices being down throughout the 2010s a lot of the economies here were pretty crummy so like copper was down gold was down oil was down so all these right-wing presidents who just said like let us export our commodities and we'll reinvest the proceeds and infrastructure and all to give you a better economy like that model didn't work in the 2010s and it's starting to now that commodity prices have gone up a lot but it was like chile unless you can reinvest those into other industries and create a more sustainable model we're still at the mercy of commodity prices so i think if there's another global bust maybe the the right wing moment goes away so i mean i'm

optimistic for where we are now and i think some of the stuff like some of the more tough on crime policing stuff i think that probably holds but i'm not sure i don't think we're getting like malay style libertarians like running latin america for the next 20 years that's probably too optimistic okay yeah that's probably a good middle ground there even even if the dream of you know the libertarian dream of south america doesn't happen if you look at you know united states valuations versus uh latin america it seems like there are some interesting opportunities if you can't find you know if you're sick of the s&p 500 trading at 30 times earnings and you don't want to be chasing the latest ai name there is some interesting stuff down there and

And that leads me to, as we close out here, Ian, thank you for joining us again. Talk about some of the stuff you cover at Ian's Insider Corner and what type of investor or professional should subscribe. Yeah, so my personal newsletter, which means it's not like it's not just focused on like one sector. It's not like a professional thing targeting like just Latin American stocks or just banks or whatever. Whatever I find interesting where I think we can make money. So a lot of times I do Latin America, particularly now, because Latin America has been cheap and the U.S. is expensive. But, I mean, full disclosure, I think half my portfolio is still in the U.S.

I like U.S. companies. Always looking for opportunities there. I like trying to invest in quality businesses wherever I can find them. Yeah, no, fingers crossed we'll get a correction in the U.S. at some point. I'd love to invest more money in the U.S. so many great businesses in the US but just not great valuations there but yeah I'm a professional investor I opened a brokerage account the day I turned 18 this is but it's my favorite hobby pretty much all my life it's always looking for wherever I can make money anywhere any sector

just about yeah and so I think my newsletter is very interesting for other professional investors that are just open to off the beaten path ideas one week that is going to be in Colombia the next week i don't know it's u.s whatever some weeks it might even be europe kind of all over the place uh yeah and i love reader comments questions uh we have very active discussions so if you look at his stuff i'm always happy to bounce ideas off people as well all right yeah i'll give praise to the newsletter it helped me understand the mexican airport operators and helping hey make money investing in those so if you're interested in that type of stuff and again all the uh well what do i say stuff not covered on cnbc some you know some hidden assets some

other countries you might not be interested in covers them quite well in thank you once again for joining this is a pleasure anyone that has any more questions about latin america stocks definitely reach out to ian on twitter or what have you or follow his newsletter but let me hit the disclosure and we can get out of here we are not financial advisors Anything we say on this show is not formal advice or recommendation. Ryan, I, or any podcast guests may hold securities discussed in this podcast, may have held them in the past, and may buy, sell, or hold them in the future. Thank you, everyone, for tuning in once again, and we'll see you next time.