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Investment Analysis Clubs Saul’s Investing Discussions
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NTNX and MELI both up over 5% today.

I assume the MELI is a follow up on their getting basket case Venezuela off the books. Because in fact most of the larger Latin American countries economies are doing pretty well. Getting rid of socialists and dictators (usually one and the same) is working, just as one might predict. MLI has at least a decade of expansion ahead of it. I don’t think Amazon is that big a threat, there is room and companies often stumble outside of their own culture.

Not so sure about why NTNX is popping.

I own both but they are small size positions. My biggest , ANET, seems rapidly making up it’s lost ground. New highs within a months are likely if the sector does not swoon.

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Nasdaq up about 5% since Friday morning…been a good 3 days…I feel like I could throw darts blindly and hit a stock up 5-10% since Friday.

Probably a small correction on Thurs/Fri with CNBC website stating “interest rate fears driving market lower!” which is usually followed in a couple days, if not hours, with “markets rise as interest rate concerns diminish!”.

I just hope that from now until the next temporary correction, the market goes up another 10% to provide a buffer when it comes back.

Two steps forward, one step back…will take that all year if the market gives it to us.

-Dreamer

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MELI has at least a decade of expansion ahead of it. I don’t think Amazon is that big a threat, there is room and companies often stumble outside of their own culture.

Even having bought in thirds, my average cost basis is almost a double now with MELI. ADD to winners!!

I’m not sure if it has been covered a ton here on Saul’s board. I know Chinese stocks are usually not well-received (and I actually sold out of Baozun a while back in part due to some of that…missing today’s 28% gain), but a quality Latin American company like Mercado Libre might be a decent fit for a lot of investor on this board.

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MELI is a less recognized Amazon type stock. Over the last couple of years MELI has outperformed AMZN, but over the last 6 months they are about the same. In the future that recent parallel should continue but MELI may have a bigger unrecognized TAM.

My Chinese stocks have not been outperforming the last several months, and to me are not worth the extra risk unless they do. So I sold them. Unless you count Canada, MELI is my only non US based company…

latin American GDP growth rates

https://en.wikipedia.org/wiki/List_of_Latin_American_and_Car…

At 1.6% the US would be about #21 on the list

Brazil, the biggie by population , is not doing well.

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“Not so sure about why NTNX is popping”

I’m guessing continued momentum from what I think everyone here agrees was a stellar report. A lot of the questions about whether transformation to a software only company would succeed have been answered in the affirmative. The post earnings digestion of a company many investors probably never heard of that is offering a great product in demand. Not profitable yet but with gross margins of 58% range it should come along.

Shake out then break out.

Darth

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I assume the MELI is a follow up on their getting basket case Venezuela off the books. Because in fact most of the larger Latin American countries economies are doing pretty well. Getting rid of socialists and dictators (usually one and the same) is working, just as one might predict. MLI has at least a decade of expansion ahead of it. I don’t think Amazon is that big a threat, there is room and companies often stumble outside of their own culture.

LatAm is all pretty much socialist, the significant difference is that some are “pragmatic” socialists while others are “ideological” socialists. Pragmatic socialism works well enough while ideological socialist regimes have failing economies. The problem is that all the LatAm countries shift from one to the other and back on a fairly routine basis. It wasn’t all that long ago that Argentina defaulted for the Nth time while Venezuela was thriving. Now roles have reversed, practically on cue. The only investments in LatAm that I figured were safe are dollar denominated industrial and government bonds but now even the latter are suspect. When they found gas offshore in Brazil everyone wanted a piece of the action. Brazilian mercantilism and protectionism ruined it for them and for investors. With so many other securities to invest in, LatAm investments should be given a wide berth.

Denny Schlesinger

PS: Venezuela has been socialist for the past 60 years, the first 40 more or less pragmatic and the latter 20 chaotic. In 1970 something I was hired to create the accounting system that would allow Venezuela to nationalize a US Steel operation, the dredging of the Orinoco shipping channel – that was socialism in action!

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from Google definition Socialism
a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.

policy or practice based on the political and economic theory of socialism.

(in Marxist theory) a transitional social state between the overthrow of capitalism and the realization of communism.

That part about “ownership of means of production” is the key. In some countries like Mexico the government owns natural resources and a few other things but not most of the economy.
Mexico is a good example because Pemex ,their nationalized oil company ,is a poster child of bad management waste and destruction of otherwise good oil fields.

Google "Eagle Ford shale wells "and note the abrupt halt of drilling at the US Mexican border, even though the oil formation extends well into Mexico. Vast amounts of Mexican wealth have been destroyed by “anti gringo” rhetoric and laws.

So I am not sure what you mean by pragmatic socialism other than it’s not what Chavez does.

In any case MELI has been a very good investment. So far. It does not seem a too likely candidate for seizure.

for Brazil’s socialist oil fiasco see
https://www.marketwatch.com/story/brazil-lets-in-big-oil-fir…

Re Latin American companies - Brazil and Argentina both produce some viable machine made offerings in a field I know something about. Quality control has been the main problem but the basic designs in this nearly mature field are adequate .

http://www.worldstopexports.com/top-south-american-export-co…

South America exports mostly raw materials and foods . Brazil dominates . Venezuela with all it’s oil exports less than I would have guessed , Chili exports more.

The case for socialism must be purely emotional because the facts are clear that the further you take it the worse the results . That being said the most likely future prospect seems to be that the US will drift that way too. There is something very appealing when you see nobody who has much more than you. All equally poor. That’s not the case but you never get much of a peek at the elite, who are isolated and protected by police ,armies and the State. Most of the elite are politicians, non productive.

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You guys know better than that. NO ARGUING ABOUT POLITICS ON THIS BOARD. If you want to argue, take it off board.

Thanks

Saul

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