Wednesday, March 28, 2007
My first arbitrage operation
I used to spend my summer vacations during the university working as beach lifeguard. Pay was good and loved beach life. After spending summers in Monte Hermoso beach near Bahia Blanca, and some time in Mar del Plata, I decided to spend my last summer as student in the elite sea resort of those times, Punta del Este in Uruguay. Water in the Atlantic was cold, colder in Punta del Este than in Bahia Blanca, and Playa Brava was dangerous. No one ever drawned in my watch in my strech of beach. In Argentina the exchange rate was artificially high (I think it was before the infamous Krieger Vasena period, when the Argentinian peso was suddenly devalued to half of its former rate. Later it was discovered that Krieger Vasena, the Minister of Economy, had bought Argentinian industrial companies and agricultural land with little down payment, then after the devaluation, he paid it off with worthless pesos) while Uruguay had free foreign exchange market. I bought dollars with the official rate for foreign travel, took the night transbordador to Colonia in Uruguay, from there the bus to Montevideo and sold my dollars for Argentinian pesos. I made some profit after expenses. After spending the day sightseeing in Montevideo, visiting my friend Ivan Ascher, I returned with the night boat to Buenos Aires. And so again. To add pleasure to business, I developed a relationship with a small town girl from Uruguay, an uneducated girl with blond hair and blue eyes. Uruguay was then a very rich pastoral country and maintained a tremendous social security framework, allowing people to retire with State pensions after few years of work. Later I got a job in Playa Brava, in Punta del Este, and was tempted to became a gigolo, fed with sandwiches by bored wives of Argentinian doctors and businessmen. Men worked during the week days in Buenos Aires while the wives and children spent the whole summer in Punta del Este. I was 20 years old, king of the beach and terribly despective towards those "old" ladies of about thirty something. The pic shows the Isla de los Lobos, a small island 2 or 3 km in front of Playa Brava. Once we swam toward the island with a boat escorting us but the water was very cold and didnt make it.