Colombia: More Than Drugs These Days
- Posted by Leigh Drogen
- on May 30th, 2011
The best trading opportunities are found when not enough people are paying attention to an asset, or in some cases a whole asset class. Even better opportunities are found when reality deviates significantly from the prevailing view.
Right here, right now, Colombia is experiencing both. No one is talking about what is taking place in Colombia, and if they are, it’s an outdated view.
While investors are pouring money into Brazil at a breakneck pace, and to some extent focusing on Argentina, Colombia is still seen by both the public and institutional investors as persona non grata when it comes to their portfolios. They better wake up, quickly, because Colombia is about to explode.
Those with a voice on Colombia are the ones wealthy enough to leave in the 90’s when the place was a disaster, geo-politically and economically. They haven’t been back, and have no view the progress this country has made. Those on the ground in Colombia, those who have taken a chance on a development story no one is talking about, aren’t saying much, yet. They are quietly laying the political, social, and economic groundwork for the next big story in the western hemisphere.
I’ve been lucky to get a deep view on what is taking place down there, from someone right in the middle of it all. Last year I also had the chance to travel down to Bogotá and Cartagena for a little over a week.
What you need to pay attention to specifically here is the real estate market. It’s still the wild wild west down there, and because there are so few institutional investors playing, it’s extremely inefficient. There is only one publicly traded REIT, it is controlled by the most powerful family in Colombia, the Santo Domingos. It does not yet have an ADR.
Partnerships are in the process of being formed and money is about to be poured into this market. Banco Colombia, ADR ticker symbol CIB is the best public way to play this trend, they will have a large stake in Colombia’s success.
Colombia is where Costa Rica was in the early 90’s. The US has a free trade pact with Colombia in the Senate. It’s currently stalled by the Obama administration due to their desire for increased protectionist measures. It’ll get through eventually, and people will begin to pay attention.
Take a look at the charts of CIB and EC, the latter being the Colombian energy company. Both look ready to explode.
It’s time guys, if you’re looking for the next Brazil, the next Costa Rica, now is the time to invest in Colombia. The next 4-5 years will be the entry point for the next 25.
Don’t sleep on Colombia, more than just cocaine is being blown down there right now.
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Leigh Drogen is the founder and chief investment officer of Surfview Capital, LLC, a New York based investment management firm employing an intermediate term long/short momentum strategy. More »
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