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No. of Recommendations: 11
Anything in Argentina selling at 30X+ earnings is overpriced. The country's economy is as stuck as an 18 wheeler in a sand dune, and will regress significantly before it inches forward. And I believe they're on different valuation metrics over there which the GG Team doesn't fully grasp.

What kind of metrics? Price-to-cow? Price-to-fabulousness?

I think that you, perhaps, fundamentally misunderstand Mercadolibre's relationship with Argentina. From a revenue perspective, it has very little exposure to its home country, since roughly 90% of sales come from outside of Argentina.

There are a few proxies here. Nokia, for example, is a Finnish company, but its results are largely separate from what happens in Finland. Ditto companies like Shimano (Japan), HSBC (UK), even Chicago Bridge & Iron (Netherlands). It doesn't particularly *matter* where they're domiciled, because that's not where they do much business.

And besides, every company in the world -- every single one -- is, at its essence, valued the same way: its future free cash flow discounted back to today at an appropriate rate. Lots of inputs are different, and how one would calculate true economic value of a company's assets varies from country to country. Obviously our discount rate for Latin America is higher than it would be in the US, but be very careful in suggesting that there's some different measure upon which one should value shares.

Foolish best-
Bill Mann
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