- Investors' enthusiasm got the better of themselves and pushed MercadoLibre's valuation beyond reason. Meli's price tumbled and is now in a reasonable range.
- The stronger US dollar leads to macroeconomic headwinds for MercadoLibre in many respects. We must take a look at foreign currency translation and Meli's credit risk.
- Brazil is Meli's largest market, so it makes sense to look a bit deeper into the macroeconomic environment there.
- Even though the DXY increased over the last few months, my base case for 5+ years is that the dollar's value will decrease in the upcoming years. This is advantageous for emerging markets.
For further details see:
MercadoLibre - Macroeconomic Headwinds But A Good Emerging Market Play