Kirchner: The Warren Buffet of Argentina

But even Buffet would be impressed with the investment savvy of former Argentine President Nestor Kirchner, who, like Buffet, hails from a small interior province (Buffet is from Nebraska, Kirchner from Santa Cruz). As an editorial Monday in the Argentine daily La Nacion tells it, Kirchner has an uncanny knack for spotting a great deal.

In 2006 Kirchner bought 20,000 square meters of land near El Calafate in Santa Cruz. He paid just $2.50 per square meter – una ganga, as a Spanish speaker might say.

Two years later, according to La Nacion and Crítica de la Argentina, which first reported the story, Kirchner sold the land for $120 a meter, giving him a 4,700% return on his investment.

By any standard, that’s a damn good deal, even for a veteran investor like Buffet.

Buffet adheres to the “value investment” school of philosophy. “Value investors,” according to one definition, “look for securities with prices that are unjustifiably low based on their intrinsic worth. Like the bargain hunter, the value investor tries to find those items that are valuable but not recognized as such by the majority of other buyers.”

This is precisely what Kirchner did in Santa Cruz. He paid $50,000 for the land and sold it to the Chilean group Cencosud for as much as $2.4 million. Cencosud, which owns well-known stores like Disco, Easy and Jumbo, reportedly plans to build a shopping center on the land. But if La Nacion is correct, the former president had a bit of help picking his investment.

Kirchner’s friend Néstor Méndez, who at the time was the mayor of El Calafate, sold plots of the land, which had been owned by the Argentine Airforce, to Kirchner and other public officials. Méndez, who is now a provincial congressman, reportedly did so without offering any kind of public auction for the land. That didn’t seem right to Alvaro de Lamadrid, a lawyer and activist with the opposition Radical party, who in March filed a complaint against Méndez for alleged abuse of power and other wrongdoings. De Lamadrid asked the local prosecutor to investigate the matter. This, according to La Nacion, is what happened next:

“But the case, which fell into the hands of Judge Carlos Narvarte, who is from El Calafate, is under the jurisdiction of none less than Natalia Mercado, the daughter of Alicia Kirchner, who is the former president’s sister and his former Minister of Social Development. The prosecutor, therefore, is Kirchner’s niece, and she should have recused herself from the case. The case confirms once again that Santa Cruz continues to be the Kirchners’ fiefdom, where no effort is even made to disguise the fortune and impunity granted to the Kirchners.

Cristina Fernandez, according to Crítica, also bought land in the area. In 2004 she purchased 10,000 square meters. She bought another 44,106 in 2005 and an additional 87,041 in 2006.

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