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Strategies & Market Trends : BAK - Investing -- Ignore unavailable to you. Want to Upgrade?

To: Covenant who wrote (421)	3/3/2012 10:03:06 AM
From: zZebraa	Read Replies (1) \| Respond to of 3249

Re: Argentina Over the last two years, Fernandez's government has resorted to paying private creditors with central bank reserves left over after what the bank needs to back up cash in the economy. Those excess reserves have shrunk to near zero , prompting Fernandez to request a change in the "convertibility" law. "We have to know that the central bank is functioning for the good of the real economy," the charismatic 59-year-old leader said during the speech. The bank has about $46.9 billion in total foreign currency reserves. "This is a negative development," said Alberto Ramos, co-head of Latin America research at Goldman Sachs, who pointed out the risk that the new policy could stoke already high inflation. "Reserve transfers to the Treasury are debasing the balance sheet of the central bank and contributing to financing an admittedly expansionary and pro-cyclical fiscal stance, which jointly with an extraordinarily accommodative monetary stance, continues to stoke high inflationary pressures," he said. Fernandez, beloved by voters who benefit from her generous welfare spending, won a second term last year despite rankling Wall Street with policies such as raiding central bank reserves and publishing official economic data widely seen as unreliable. "Today's announcement shows Argentina has very weak resolve in terms of fighting inflation," said Boris Segura, who covers the country for Nomura Securities. "Over time this is going to make people less comfortable holding Argentine pesos."

To: Covenant who wrote (421)	3/3/2012 1:55:26 PM
From: thatsnotluck	Read Replies (1) \| Respond to of 3249

RE: NTL i have been spending some more time with this and warming a bit, but i think in addition to your list there is a question as to what level of dividends will be distributed by TEO. they went down in 2011 from 2010. the report assumes they increase significantly from here. it could happen. but it was reduced in 2011 in peso terms, and as you point out there is a devaluation risk. they do build in an assumption for this into the report, but i am not convinced they have fully reflected the add-on effects of devaluation and inflation. i think their dividend projection is optimistic. that said, it can still be a good value even if dividends come in a bit lower than what they project. one other point...both TEO and NTL are lower than when the report came out. is there a flaw in the basic analysis? the U.S. market is certainly higher than when the report came out, and they slapped a buy on this suggesting it should do better (presumably) than names that did not have a buy on them. i do like the potential catalyst of starting dividends, and trying to decide how i wish to size this. i think some of the discount has already disappeared, so i doubt i chase it very far. a positive is the list of risks is for the most part a diversification from the other risks in my portfolio (aside from YPF of course, and even there the differences in degree make them only partially correlated. thanks for pointing this one out, Batman. on an unrelated note, watching the traffic between this board and IV and trying to handicap where things shake out, i think IV has retaken the lead in post count, but IV seems less focused on stocks and more on gold and real estate. maybe IV will evolve to a broader, more macro board and this one more stock specific? too soon to tell. may just be a random variation. SI does seem to have a few more generalist boards that may prove to be interesting. if nothing else, the introduction to this board has given me an additional source or two for ideas, and that is always a good thing. i sometimes come across a new generalist board on IV that seems interesting initially, but i have not found any beyond BAK that had staying power in a general manner. i do have a few name-specific boards over there i will continue to track.

To: Covenant who wrote (421)	3/3/2012 7:01:35 PM
From: batman10023	Read Replies (1) \| Respond to of 3249

infringer - NTL i think 20% discount for holding company is severe but 10% is probably too low (assuming dividends are flow thru). yes, there is currency risk but isn't that picked up in the difference between the adr's and the local shares? that would also pick up any sort of dividend restriction issue. you i guess could hedge the risk by shorting TEO adr's to capture the spread. i think it's worth a gamble but i would not want to hold this for a long time. thanks for looking into it and getting another set of eyes.