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Friday, 28 August 2009

Peru and Brazil

Posted on 11:06 by Unknown
I just got back from my trip to Peru and Brazil. My first stop was Lima, and I had a blast. The people are friendly and hospitable, the weather is balmy and the food is extraordinary. While I have explored only a small sliver of the country, my impression of the Peruvian market is that it is commodity driven. As the price of copper and silver goes, so goes Peru's stock market. As a result, the market resembles a roller coaster. Peru has been among the best performing markets in recent years, as commodity prices have been on an up cycle. While I am not a pessimist by nature, it is inevitable that commodity prices will come down, and when they do, the market will reflect that fall. I hope that the Peruvian economy (and market) can use the surplus from the commodity boom to jump start other businesses - consumer products, technology or food (why not?).

I am more familiar with Brazil, this being my 15th trip to the country, and am always glad to see Rio (Sao Paulo, less so... the traffic drives me bonkers). I talked about the lessons that I have learned from the crisis for corporate finance and valuation. The presentation I used is available online on my website at:
http://www.stern.nyu.edu/~adamodar/pdfiles/country/crisislessonsUpdated.pdf
Since this will be the genesis of my next book, your comments will be appreciated.
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