Monday, October 20, 2014

Argentine Stock Market and Ammo after the Economic Collapse

MERVAL Index is the most important index of the Buenos Aires Stock Exchange.

Hi Ferfal,
I have been following you blog and videos for a couple of years now. Also, I am reading your new book and enjoying it immensely. I would like to add that I loved your first book too.

I have a couple of nagging questions and I am hoping you might be able to answer them. First, I notice that you never mention the financial markets in Argentina. When Argentina had its' financial collapse over a decade ago, were there ANY areas that thrived? Or was it too risky to be in the markets? I hear people recommend this stock, bond etc. as being a good form of protection against financial collapse, however, I tend to be very skeptical. I have purchased some gold/ silver, but is there anything else you recommend (especially in the financial markets). Please understand, I am not looking for a "hot stock pick", or a way to get rich, just added ways to protect myself.

Also, I have a question about ammunition. If a large economic event were to occur in the US, what is likely to happen to self defense ammunition (JHP's). Were they scarce in Argentina? Were they too expensive to buy? Did the government limit their use? The reason I ask is that I tend to favor the 9mm and the .45ACP and if hollow points are hard to find, I will eventually run out of my 9mm hollow points. Are the 9mm fmj's as bad as many people say? I figure that if it happens that they are hard to find, I can use .45 fmj's. What do you recommend?
Thank you for all of your no nonsense advice. It is truly appreciated.

Hi Matt,
Regarding your first question, the Argentine market did get hit because of the economic collapse of December 2001, but it wasn’t as serious as you would expect. In fact, if you look at the chart, it seems to have been doing rather well ever since. Here, he have to keep a couple things in mind.

First, the argentine stock market wasn’t that big to begin with. There was no bubble to burst, so the drop due to the crisis wasn’t as significant as you might expect. Second, you have to keep in mind that as you consider the rising graphic, you must take into account that after 2001 the Argentine peso is no longer pegged to the US dollar and in fact inflation is likely bringing that chart down much more than it would initially seem, especially these last few years. I’m not stock exchange savvy but for the most part its understood that the stock exchange in Argentina is small, messy and you’re more likely to end up losing money. My advice would be to go for land, brick and mortar. Real estate has always been considered a safe, stable investment when buying smart and not falling for some developer’s scam.

Regarding ammunition, you already know that when things get tough, ammo gets pretty scarce. This is especially true for the more common calibers such as 22LR, 9mm ad 45 ACP. In the case of Argentina ammo was hard to find at times and it sure was expensive. The problem was that premium JHP ammo for defense was expensive to import after the devaluation, so there wasn’t that much floating around. Still, with some patience and a bit of money you did find it, especially in the more common calibers.

My advice here is to have plenty of ammunition. Start buying as funds allow but try going for 1000 rounds of pistol ammo. 5000 rounds would be even better, but 1000 should do as your first goal to go for. I know ammo is expensive but there’s just no way around it: Without ammo a gun is just a fancy paperweight or a poor club. If you buy a box here and there it will eventually pile up. Make sure to keep your emergency supply and not use it. I would go for quality JHP, in the case of 9mm I like 124gr +P. FMJ is not as bad as it sounds though. Granted, stopping power is pretty bad compared to JHP, but ball ammo kills people every day. Indeed, hardball FMJ .45 is superior to FMJ 9mm, but 9mm hollow point premium ammo will perform better than FMJ 45. Just make sure to buy ammo now for a rainy day. Even with ten boxes of ammo, not many people go through 500 rounds of ammo in defensive shootings during their entire life. Heck, most people will go their entire lives without firing a single round in self-defense, few will go through 50 rounds, let alone 500 or 1000.


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