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The World’s Best Real Estate Value

By Dr. Steve Sjuggerud
Tuesday, April 18, 2006

These shares are comically cheap...

If you had a billion dollars, you couldn’t put together a better real estate portfolio than Cresud’s... and yet the market value of Cresud’s stock is less than $250 million.

To me, Cresud is the world’s best value in real estate. The nice part is, Cresud trades on the Nasdaq, so you can buy and sell this fantastic real estate portfolio whenever you want.

I first told my True Wealth readers about Cresud in November of 2003. I came up with a “rough value” of the assets back then of about $800 million. I told my readers that Cresud was worth $30 a share, and that we’d take our profits at $25. So far, the stock has only risen from $11 to $14.

Yet the value of their real estate has soared.

Remember... I thought Cresud was worth $30 a share back in 2003. Since the value of real estate has soared since then, Cresud has to be worth over a billion dollars today. Yet the market value is less than $250 million. Why is it so cheap? How has everybody missed this one?

The reason everybody has missed Cresud – even though it trades on the U.S. stock market – is the company is based in Argentina.

Cresud is a massive land owner in Argentina. When I first wrote my story, I here’s how I valued Cresud:

$320 million in commercial property
$350 million in farmland (1.1 million acres)
$130 million in cows, crops, and cash
= $800 million

I know this business as well as anyone. I’ve traveled out to Cresud’s farms. I’ve stayed in their hotels (the Llao Llao in Patagonia is just incredible: I’ve visited their shopping centers. I’ve stood on their land to be developed. I’ve been to their office buildings.

Getting to know this business so well has cost a lot of time and money It’s worth it though... I can confidently confirm this is a great business with a huge amount of valuable assets.

It’s not just Cresud’s land holdings I’ve become so familiar with. I’ve also gotten to know the guys who run the company.

I didn’t mean to, but with so many trips down here in the last three years, I’ve become friends with these guys. They’re exceptionally bright people who understand how the world works, and how to make money.

Over the last 15 years, these guys have put together a portfolio of Argentina’s very best properties. They managed to buy nearly all of them at fire sale prices too.

Right now, I’m in Argentina again, looking for investment opportunities. A few weeks ago, I started crunching some numbers looking for the cheapest stock markets in the world. Thailand and Argentina came out near the top of the list. So I headed back down here.

I love this place. Yesterday, while walking around the stunning Recoleta neighborhood in downtown Buenos Aires with Porter Stansberry and Doug Casey, Doug called Buenos Aires the “most European city in the world these days.”

I have to agree with him. We just arrived yesterday, and it was 75 degrees, with not a cloud in the sky. You couldn’t dream up a nicer day.

Argentine stocks and real estate are very cheap. We plan to fly around the country looking at real estate, and we’ll meet with some companies that look pretty interesting (but only trade on the stock exchange down here).

However, with shares of U.S. traded Cresud so cheap right now, you don’t have to look any farther to play this cheap market. By buying Cresud, you can buy Argentina’s “trophy” properties with excellent managers at fire sale prices. Right now, why do it any other way?

Cresud trades on the Nasdaq under the symbol CRESY. It's web pages are and

The shares are definitely worth checking out.

Good investing,


Market Notes


The bear market in fear may be ending…

In our March 9 edition, DailyWealth pointed out how the easy money of the past few years in stocks and real estate has erased the concept of risk from the minds of investors.

This “bear market in risk” is showing up in extremely low readings of the VIX, one of our favorite measures of investor sentiment.

When the VIX is high, it indicates traders are fearful for the prospects of the stock market… and traders are paying up for instruments that will make them money if the market goes down or moves wildly. When the VIX is extremely low, it indicates traders see blue skies ahead… and aren’t worried about hiccups in the global asset markets.

As the 1-year chart below shows, the VIX spiked to the upside this month. Is fear returning to the stock market? Let’s look at the long-term view…

…although the spike in the VIX may be a sign of higher volatility to come, the long-term view shows the VIX has yet to break a 4-year downtrend.

In graphic terms, we’d like to the VIX break its downward sloping trend line (in red) before we’re convinced the bear market in fear is officially over. If fear returns in a big way, please make sure you own gold…

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