»The Daily Reckoning by Bill Borner

Days at the ranch
20 APRIL 2015

Gualfin, Argentina

Dear Diary,

When we checked on Friday, the US stock market was selling off, with the Dow down 279 points. It effectively gave back all of this year's gains.

But we'll come back to the markets on Wednesday.

Now, we are riding through the "puna" - the high altitude desert between Argentina and Chile - with a small group of friends, led by Jorge and his wife Maria.

Days at the ranch follow a simple pattern. At 8 am, Jorge appears in the yard. Typically, he is surrounded by a small group of gauchos. There is Jose, for example, a stout young man with a broad, ready smile who is missing most of his front teeth. Pedro is less ready with a smile. He is more thoughtful and frequently appears to be calculating. Pedro has a medical problem a few years ago; now, he refuses to get on a horse.

Jose wears a cowboy hat. The rest wear local, broad-brimmed hats...with flat brims and a raised center for the head; they look a little like flying saucers have landed on their heads.

Saturday morning, they came dressed in layers of homemade sweaters and coats. It is autumn. The nights are turning colder. It does not warm up until mid-morning. Unlike cowboys in the US, they do not wear blue-jeans or cowboy boots. Instead, they wear workpants, often stitched up in several places, and black, lace-up work-boots.

--- Advertisement ---
Some Old Rules Are Meant To Be Broken...

If you follow the old rules, you might not even think of investing in small caps.

And you might miss out on some amazing returns.

Returns like 217% in 3 years and 11 months, 177% in around 2 years, 100% in 1 year 8 months and many more...

Sure, not all small caps deliver such good returns. Only a few, well chosen, solid small caps can give such returns.

But Equitymaster has been finding such 'hidden gems' for the past 7 years. And discounting a few misses, a majority of our recommendations have given good returns for our subscribers.

Click here for full details...


When we bought the ranch, we had winter coats made for all the 7 employees. They are khaki colored, insulated, with the "Gualfin" name monogramed on them. They look very cool when we wear them in Manhattan. But here, we've never seen a single one of the gauchos wear the coats; maybe because we're never here in the winter time.

Three of the gauchos - Javier, Natalio and Jorge - stood together, each with his flying saucer hat slanted forward. The sun shined on them as they discussed the day's work. No one smiled. No one joked. There was no discussion of football games or comedy shows.

Javier would take the backhoe to clean out the irrigation canal by the river. The idea is to divert the little remaining water to the "swamp land" on the side of the riverbed. This will give the grass there a few more weeks of growing season, leaving the cattle with a little more to eat in the winter.

Following the 8am conference, Natalio put his shovel over his shoulder and headed down to the alfafa pasture. There he will be a 'regador' - an irrigator - moving the water around the field so that it waters as much grass as possible. Jorge sent the others to the vineyard where they were putting fertilizer on the plants. A hole is dug next to each plant - and fertilizer put into the whole.

When all the workers had dispersed, Jorge turned to Gustavo and gave him instructions. We were riding up to the Rio de los Patos (the river of the ducks). Gustavo would help to pack up the mules and saddle the horses.

Gustavo has a bright look. He is Pedro's adopted son. His mother is Pedro's common-law wife. Many are the informal liasons in this area.

Gustavo does not know who is father is. This is not unusual. When Elizabeth, teaching English to a group of young girls, asked each girl to give her parents' names, in most cases she got only half the story. The other half was 'unknown.'

Our trip to the puna was planned weeks ago. Jorge - who has lived on the ranch all his life - has never ridden to the Rio de los Patos at the west end of the ranch. Maria, his wife, had always wanted to. Now that Jorge is getting ready for retirement, it seemed like the right time to go.

"Are you sure you want to do this," asked our friend David, whom we invited to join us. "I checked GPS. You're talking about going to a place that is at 17,000 feet...or more...and spending the night. A friend of mine tried that recently. His horse dropped dead when he got there.

"And I went to about 15,000 feet. That's as high as I've been. But I had an oxygen tank."

We put the question to Jorge.

"Are you sure this is something we can do? Can we breathe at that altitude."

"Not very well," was the reply.

Jorge smiled. He has very regular, white teeth. And a very warm smile.

"But some people are all right and others aren't. Some get terribly sick. We call it a "puna." And. if it is too much for us, we'll just turn around."

He used the 'us' generously. It was only the gringos who were likely to stumble. But the plan seemed like a good one.

We've gone up towards the puna a couple of times. Two years ago, we spent the night at about 12,000 feet. We couldn't sleep. Each time we began to fall asleep, we awoke with a start, gasping for air.

But we were younger then. Now, with more age and experience, maybe we'll be able to do it.

"We'll ride for 10 hours the first day," Jorge explained. We'll camp overnight at the "puesto" of Sylvia Gutierrez. She's the farthest from the ranch house. Then, we'll push on to the puna the next day. That should be about another 8 hours."

But Jorge had never been there on horseback. And we had learned that many of the estimates of time are little better than economic forecasts.

On Wednedsay of last week, for example, we had been invited to lunch at our closest neighbor's.

"About three hours," was the local guess. But no one had been there on horseback for many years. As it turned out, it took us 5 hours. And they were not easy hours. After we got over the pass, the way down was very treacherous, with the horses slipping on granite rocks and practically sliding down steep hillsides. (Elizabeth wrote up her recollections of the trip, and added some photos...we'll send that along tomorrow.)

We passed the time, as we always do, by asking Jorge questions. We wanted to learn more about the farm, the people on it, the history, the families, the plants, the trees, the mountains around us...

Most of the plants have sharp thorns. Brea...churqui - the prickly bushes are everywhere - and often so thick the horses refuse to go forward.

One plant, especially, caught our interest. It is Jurassic-looking, with long up-curling spines rather than leaves.

"That's a remate," Jorge told us.

But it is the stories of the people that we find most interesting.

"Natalio's father had 8 or 9 children. His name was Emiliano. He was a great guy. Many of the people who work and live on the ranch today are actually descended from him, not just Natalio but also Nolberto's wife...and Martin...and Justo's wife... It was a big family.

"They were not native to the farm. They came from the big ranch to the south - Jasimana. That was years and years ago. Maybe in the '40s.

"Emiliano was very active and ambitious. He settled in that valley where Martin lives now. And he raised cattle up in the mountains.

"But when he was about 75 years old, he was up in the mountains on a mule, looking after his cattle I think. It was winter time. And he was alone. You know how difficult the high sierra can be. There are rocks and cliffs, and cactus. It's very hard. And dangerous.

"He has spent the night at Severiano's house, way up in the mountains. And the next day, Severiano saw his mule come back, but without Emiliano.

"Emiliano had spent his whole life up here. But things happen. Apparently, his mule slipped. Emiliano fell off and broke his leg. With a broken leg he couldn't get up. The sun went down and the temperature dropped. We found him the next day, frozen to death."

We are leaning that the mountains can be dangerous. The weekend before, with Elizabeth, we had ridden up to some ruins called the "casa del molle." The "molle" is a tree that looks a little like a willow. It survives in dry conditions. Two or three are still living at the 'casa del molle,' barely.

This was a homestead that had run out of water in the '70s. It was abandoned, maybe after thousands of years of habitation. You see the evidence of it everywhere. In any direction you take you walk on pottery shards. From what era? The 1900s? The 1500s? One thousand BC? We have no way of knowing.

We can see the casa del molle from the bottom of the valley - a patch of dark green against the light green and brown mountains. But getting there was another matter. We rode up the river bed and tried to find the path up to the mesa on the left side. It look a long time to find it, because there has been no traffic there in years. And, even with the path, it was rough going. We had to dismount and lead our reluctant horses by the reins.

Once on the top of the mesa, it was easy going. We picked our way through the spiny plants...trying our best to protect the horses' legs. After another hour or so, we arrived at the terraces that marked the edge of the homestead. Some were from the last settlers there. Others were much more ancient. There were dozens of them. Some washed out. Some more or less still intact.

Just as we were coming up to the ruins of an old house, dark clouds gathered overhead. Thunder ...followed by a sharp strike of lightning nearby. Then, a light rain began.

We took shelter. But the only shelter was under a roof that had only partially collapsed. We took off the saddles and led the horses to some shelter beneath one of the molles. We spread the saddle blankets on the ground and made ourselves a little nest under the broken, adobe roof. By then the rain was coming now harder. We were drenched before we go under cover. And then we discovered that our cover wasn't very good. The rain came through the roof and dripped on us both. We were getting cold...and wet.

"It will stop soon," Elizabeth said cheerfully.

"I don't know. I'm a card-carrying doom and gloomer. It could go on all night."

"When has rain ever lasted all night here? And this is April; it never rains in April."

"Well, it's raining now," we replied, beginning to shiver.

And then the rain turned to hail. Water was dripping on us from above while balls of ice - about the size of peas - flew in from the sides of the shelter. Now, we were getting seriously cold.

We put one of the saddle blankets against the adobe wall behind you're your editor put his back against it. Elizabeth put her back close against us. We wrapped the remaining saddle blankets around us. Our wide-brimmed hats now diverted the rain to the sides of the heavy blankets, where it ran to the ground. And wound together so tightly, we were able to keep each other warm.

"This is very romantic," said Elizabeth.

"Yes, I didn't know you were such a warm person."

"I can be."

Moments later, a patch of blue appeared. The rain abated. The sun came out. We put out the blankets and saddles to dry in the sun while we ate a few raisins and some dry sausage.

The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and has not been authenticated by any statutory authority. The author and Equitymaster, do not claim it to be accurate nor accept any responsibility for the same. Please read the detailed Terms of Use of the web site.
© Equitymaster Agora Research Private Limited