 Good day, fellow investors! The Argentinian stock market crashed more than 50% in one day on Monday. It is the second largest one-day stock market crash in history. It is a very, very interesting situation. Argentina has been a stock market that I thoroughly researched the stock opportunities on the New York Stock Exchange. A year ago, I even bought one which is now my biggest portfolio loss currently positioned in the market. And in this video, I want to discuss what's going on in the market, what has happened this Monday, the investing strategy when it comes to Argentina, the macro situation, the risk and reward that hasn't really changed from when I analyzed things and invested. And then my investing strategy when to buy, when will I sell, when will I buy again to give you a comprehensive overview of investing in such situations like it is this crazy scenario we can call it in Argentina. Let's first see what happened. So the Argentinian ETF that has also some global exposure has been down 17% over the day. 20-something percent was the decline on Monday. It looks like stable a little bit up now on Tuesday as I'm filming this. The iShares Argentina ETF was down 25% for the day erasing almost all of the yearly gains. So when you look at all already from a year-to-date perspective, it is still up 7%. Then looking from Bloomberg, the Merval Index adjusted for currency had a hit 48% in one day. So the second largest historic hit to an index in one day, which is big, big news and it's a very, very big thing. The reason for the carnage is that Macri, the pro-business current president lost by more than expected in a primary vote. The real election will be held on October 27 and we will see whether Macri will be able to use the market sentiment, the current negative sentiment, against its opponent Fernandez. Fernandez is from the previous environment political stream in Argentina much more leftist than Macri, much less business oriented and much more, let's say populistic. Whether one is better or not, that can all only be decided afterwards. After one has been in play, the other has been in play. The situation is always changing and we will see whether Argentina will come out or not. And this is something crucial when it comes to an investing strategy that has to be understood before investing in a country like Argentina. I'll show you now about that. So when it comes to investing in Argentina, apart from the political issues that there are always political opinions, but you have to assess the risk and reward. And this is what I wrote the last time I analyzed Argentina for my stock market research platform. Let me show you. So on the 18th of April 2019, I said that from the current perspective, I would put it like this when it comes to investing in Argentina. 10% chance, 100% loss, bye bye money, and that's it. 40% chance that Kirchner wins, which happened this Monday, 50% down short term, which was a very, very prescient calculation as the market fell 48%. Long term neutral, so you can closely watch buy more because there is a chance that the new government will not do crazy things, will not nationalize everything, will not put an end to private property. There will be higher taxes, there might be something like that. But in the long term, it might be okay-ish, might be 25% macro wins, okay business as now, give it time, 25%, 200% upside of more if macro succeeds. Now the ratios should be much different. We know that higher probability of Kirchner winning, but we'll still don't know whether the Kirchner situation will be that bad for investors. Now it will be very bad for bond investors, especially as the negative sentiment exerberates the situation for bonds because if nobody wants to buy, if nobody wants to buy bonds, if nobody wants to refinance, then you are in trouble. But if you are selling your bonds, you're creating such a spiral of negative news. So you're practically cutting the branch you are sitting on. But that's something that bond investors should always expect. They are chasing those yields. They have been chasing that yield in Argentina because it's higher than in Europe or higher than there without thinking about the bond risk. The new probably future president said they will not hope not to default on bonds, but if the negative sentiment persists, they will be forced to default, reorganize, which per se might not be a bad thing after all. Investors that invest in assets, the only thing you have to fear and keep it as a risk as I still keep it as a 10% chance is nationalization of private ownership. That's something that can always happen. I always keep it in mind. It can happen everywhere in the world, especially due to the popular politics now. But that's something that will unlikely happen. I don't think the Argentinians will like to renounce their private property. So we have to see how what's going on fits that investment scenario now and over the very, very long term. In his book Dead Cycles, Ray Dalio perfectly explained the situation in Argentina. The currency devaluation, the peso losing value at some point will make Argentina cheap again, will make Argentina attractive to investors, will make Argentinian food products cheaper on a global scale, will make more money for Argentina and the country will start to go up again, especially if the debt gets restructured, which is a positive again for long-term investors. So that might happen. It usually takes a long time, 84 months for the whole cycle up and down, depending on the politics, shorter, longer term. So we'll see, but we must not forget that there has been an injection of 52 billion from the IMF. They have to restructure their deals, terms with them, how to fix that. Bondholders might get some cuts, some severe permanent capital loss situations, but then it again, it's different for investors. Everybody's now selling in panic, but what do you do as an investor? What's my investment strategy? Well, the first thing when it comes to investing is, okay, I am buying assets there. I'm not speculating, I like that piece of land in Buenos Aires, no matter where the pezzo goes, I think that over the long term it might be a hotel or something. It will do good because it's the capital, there is football, there is whatever soccer, there is things that will keep the country growing. They will still produce sugar, they will still produce soy, they will still produce meat and they will export it all around the world. So there is value from an intrinsic perspective. If you like buying assets that are very cheap, no matter where there are in the world and wait a year, five, 10 years from them to appreciate, then you are an investor. On the investment strategy, going back to my report of April, I would say that in one of five cases of investing in such a scenario like Argentina was and is now, I expect a 100% loss. In one, I'll break even and in three of five, I'll probably make three times my money. So if I invest five, after five years my return should be 10, this would be a 15% return over the years. If it's faster, it will be higher. If I hit a landmine like I did now, it might be a little bit slower, but five years is a very, very long time. So when I saw one stock that I will not talk now in details here because it's not the point of the video. If you want to see it, you can check my stock market research platform with portfolio and everything. Then I saw, okay, this, I like the best assets there. It's below book value on a global scale. And then that's the first thing. If you like the assets, you say, okay, I'm happy being an owner of those assets there. And there are many opportunities now to buy great assets in Argentina that have global businesses that have differentiated businesses diversified that don't have that much in common with Argentina itself and the macro situation there. But there is always the risk of nationalization, minor risk. 10% could happen. Keep that in mind. Secondly, if you own those assets, if there is a crash like we have seen now 50%, what do you do? Well, what did I do on Monday? I doubled the number of shares that I was owning. So I said, okay, first entry point risk X lower entry point risk from a price perspective, I buy at a 50% discount from what I bought earlier. So I'm even happier to buy now. And then I have a third buy. A third buy, if stocks crash another 50%, I have another buy. And that's it. And that's my portfolio exposure. So that's my total maximum portfolio loss if there is nationalization and it becomes, I don't know, a scenario like Albania was in the 70s, 80s. But that's really unlikely. Perhaps if there is a rebound, I sell my buy off from Monday. And then I'm already in positive territory and still holding the assets I held in the first place. So first you have to see, okay, what am I buying? Keeping in mind the worst thing that can happen as an investor there, individual businesses, some businesses dealing dollars have nothing to do with the pesos. The pesos are the costs. So even better if it depreciates. Some businesses are export businesses. Some businesses have really great assets. Some businesses don't have that. So it's a very different story. But the market sell off shows that everything has been sold because of panic. So if you do what the opposite of what the crowd does, buy, be greedy when others are fearful and be fearful when others are greedy. These situations are situations that perfectly describe the saying and you have to really have the courage or the strategy to invest. I know I can lose everything. That's a 10% chance in the global strategy of investing in such situations. I'm happy. 1 out of 5 will go bad. 2 will do nothing. 2 will do great. My returns will be positive over the long term for the portfolio. Let's look at this. Companies like Pampa and Alhia, I think I've analyzed this in a video, have the client in price but are still higher where those were five years ago. So still might be an opportunity. Look at this company. If you like the assets, there is some debt that I didn't like here, I think. But look at a company like this and then you say, okay, if I like the assets, if I like the oil strategy, no matter what the price and I'm ready to average down, if the stock price falls again, then okay, I say, I buy this, I'm ready to average down, I look at my portfolio exposures and I'm looking happy to hold this for a long term. When it doubles, if you look at it again, it was at nine just what five years ago and then it hit 70 a year and a half ago. So that's a 7x return. That is the risk reward when it comes to investing. Yes, there will be volatility, but there is always upside. So this is what you have to keep in mind. This is just Argentina. China is another example where there are plenty of such situations. There will be much more in the world and this is part of just portfolio strategy, buying assets at what price, looking at the risk reward. You can never know what will happen. Political opinions are one thing, probabilities investing, knowing, I don't know what will happen in the next three months in Argentina. Will the situation change? Will it not change? I knew that the situations wasn't good, but there are many, many factors that influence that from the fact that Argentina is very much dependent on commodity prices. If commodity prices rebound, then Argentina will find itself in a much, much better situation. One of the reasons for the trouble is low commodity prices, especially food prices. So that's the long story short. Think how this might affect your portfolio. If you can stomach the volatility, don't even invest in Argentina. Forget about it. There will be plenty of other investments with lower risk and perhaps lower upside, but still very, very good upside. So it's not for everybody. See how this fits your investment style. Thank you for watching. Looking forward to comments. I'm ready for the political comments. I told you so, Argentina's risk. You're crazy for that. You're crazy for that. But this is simply part of my strategy. I might be biased. I come from a frontier market. So this is something that I'm completely used to. And I try to balance it with correct portfolio exposure. I'm not afraid of losing money because in the long term, even losing here and there maximizes my portfolio long term returns, not the first time that I am in this situation. Thank you for watching. Looking forward to comments and I'll see you in the next video.