Letter from Mark Mobius ;-) "There are a number of companies in Argentina that really don't do business very much in Argentina itself," says Mobius, who cites pipe-maker Tenaris and steel-producer Ternium as two such examples. Both companies trade on the New York Stock Exchange. "There are some companies that, as a result of this political situation in Argentina, look attractive."
At the moment, Argentina's political situation is not good.
"There's no question on a domestic front, it's a pretty bad situation and we just have to wait and see what happens," says Mobius. "It looks like we're at the end game with the Kirchner Administration because things are getting very, very tight there."
"Essentially, they are in default already," says Mobius. "There's no question about that. So, I think we can just assume that they are in default."
Countries in troubled debt situation institute tougher exchange controls, leading citizens to rush to assets rather than hold a devaluing currency.
"Prices of stocks, of property, of any good that people can hang on to will go up because they're escaping inflation that's coming down the pike," says Mobius. "We've already seen that. The government finally realized that, 'Oh, yeah, we do have 30% or 40% inflation.'