Cashing In on the Growing “E-Bay of Latin America”

If you just looked at the headlines, now would appear to be the very worst time to invest in Latin American tech.

After all, the Trump administration recently threatened to put big tariffs on goods from Mexico.

The president did that to get our neighbor to help with the crisis of undocumented workers on the porous southern border.

Under the recent agreement, Mexico will work to stem the flow of migrants leaving other Latin American nations in search of opportunities here in the U.S.

Much of what’s going on has to do with simple economics. While the region overall is in good shape, countries like Ecuador and Mexico are growing more slowly than the U.S., where GDP recently clocked in at 3.1%.

So, it may sound counterintuitive to learn that there is a Latin American e-commerce leader that is growing much faster than many tech firms based here in the U.S.

But that’s exactly what I’m going to reveal today. And I’ll show you why this hot tech leader will continue to crush the overall market…

Check it out…

Drilling Below the Headlines

Let’s be clear. And do so in a nonpartisan fashion. The immigration crisis is a big one, with hundreds of thousands of illegal workers streaming across the border every year.

And the situation is likely to be a hot button issue in the 2020 elections, where nearly two dozen Democratic candidates are vying for the chance to unseat the president 16 months from now.

I’m not picking sides here, but it is worth noting that right now the president has a big financial advantage over all his Democratic rivals.

A recent report in the Wall Street Journal shows that Trump has already raised $127 million for his reelection campaign. The paper notes this is a record amount that swamps by several fold what previous presidents have done in their first two years in office.



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Clearly, it’s too early to predict who will win the While House in 2020. But it’s certain that illegal immigration will remain front and center with the media and voters.

Ironically, despite the crisis, several of nations to our South are growing as fast as -or faster than – the U.S. FocusEconomics forecasts that our GDP for the full year will come in at 2.4%.

That compares with 4.1% for Bolivia, 3.6% for Peru, and 3.1% for both Chile and Colombia. For 2020, the region should grow by 2.4%, with the U.S. included in the figures.

Ironically, the Americas are swamping our European allies in economic results. FocusEconomics expects the Eurozone to grow just 1.4% in 2020.

Here’s the thing. This is why it pays big bucks to drill down below the daily headlines and find great tech opportunities.


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Dominating Latin American E-Commerce

And that’s certainly true of the company I’m going to tell you about today…

In fact, this is one of the one world’s more successful e-commerce plays. After all, it’s often referred to as the “eBay of Latin America.”

Indeed, the name alone should tell you what this company is all about. It’s Spanish for “free market.”

Yet, when I hear the name, to me it sounds like Big Bucks…

Mercardolibre Inc. (NasdaqGS:MELI) pioneered the concept of online auctions for Latin America back in 1999. The company began operations in Argentina, but quickly expanded.

Today, it operates throughout one of the world’s fastest-growing regions. Roughly 400 million Latin Americans are online today, which is about 100 million more than in the U.S.

As the economy south of the border expands, millions of consumers will take advantage of rising incomes to purchase tech products and consumer electronics.

These just happens to be two key areas fueling Mercardolibre’s impressive growth.

In fact, the company has adopted marketing programs aimed at getting consumers to register on the site and bid on everything from digital camcorders to tablet computers.

With its status as the leading e-tailer in the region, Mercardolibre is uniquely poised to cash in on Latin America’s huge growth in online spending.


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PayPal Jumps In

And I’m not the only one who thinks so. Consider that PayPal Inc. (Nasdaq:PYPL) recently invested $750 million into MELI as part of that firm’s $2 billion financing round designed to help fuel even more growth.

Bear in mind that I’m a big believer in PayPal and its status as a fintech leader. I recently recommended the stock. You can access that report by clicking here.

It easy to see why PayPal has been working with Mercardolibre for years and decided to help fund the firm’s expansion. Then again, Mercardolibre is targeting a large and growing market.

Data compiled by Statista shows that roughly 155.5 million people in the region are expected to buy goods and services in Latin America this year. That’s up 22.6% from just three years ago.

Not content to be an emporium for used goods, Mercardolibre is in the process of changing into a full-fledged e-commerce ecosystem and financial technology business.

That’s right… it’s in the process of becoming the “Amazon of Latin America.”

We’re talking a very impressive franchise with lots of revenue streams. It also brings in cash from advertising that includes classifieds, along with revenue from money transfers, consumer lending and online payments.

At the same time, it’s going after mobile commerce. More than 80% of recent new users access the site from handhelds, the company says.

In the first quarter alone, mobile transactions made up 50% of gross merchandise sales that totaled $3.1 billion. Overall, that was a very impressive 27% sales increase from the year-ago period.

This is a firm that is on an amazing tear. The March quarter was the 20th in a row in which gross billings had growth above 60%.

No wonder the stock more than doubled in the past year, compared with a roughly 8.8% advance for the S&P 500. I believe that based on its amazing growth, MELI will continue to crush the broad market for years to come.

Add it all up and you can see this is a great way to invest in Latin American e-commerce, a field that is large and expanding.

And MELI is the kind of growth-centric tech leader that can have a huge impact on your tech portfolio – and help you achieve financial freedom.


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Cheers and good investing,

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Michael A. Robinson

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