Is the Russian market a buy?
There are many benefits. The world economy is currently entering an era of high inflation (even stagflation?) that will massively benefit commodity producers. The largest and best run Russian companies are nearly exclusively commodity producers. The shares of these companies are currently at historic lows in terms of p/e and have dividend yields of 10%+.
The drawback is obviously the risk of sanctions on the Russian economy in the event of a full-scale invasion and occupation of Ukraine. But this risk is tempered by the incredible importance of Russian commodities in the global markets -- the US and EU cannot stop trading with Russia without triggering a global depression. Eg the company Norilsk Nickel alone controls 20% of the Nickel market and 40% of palladium and platinum. Not to mention Rusal for aluminum, Russia being the largest exporter of oil, etc. Thus the West cannot afford to impose overly severe sanctions on Russia.
What do you think?
Might yolo some $RSX LEAPs for the lolz if it keeps dropping 10% every other day.
Kuppy seems to think so: https://adventuresincapitalism.com/2022/02/22/buy-russia/
I, on the other hand, read Red Notice and am scared to touch it
silver b for red notice reference
Buy silver, crop seeds, land, and ammunition.
Drumpy is the local expert in going long on Russian parcel logistics, not sure I'd follow his lead but by all means lets see what happens and make sure you double down no matter what the next month has in store.
Isn’t there this saying that it takes one bad apple to spoil the entire barrel? I would apply the reverse to Russia: a couple of good grapes can’t save a spoiled wine.
I guess to hedge, maybe go short Russia overall and long the specific Russian companies u think will outperform. That way ur separating the good apples from the spoiled barrel. But overall, I would rather just avoid Russia altogether.
True, I agree that buying individual shares is a smarter choice than buying the whole MOCEX. I wouldn't want to hold Gazprom, Sverbank, Rosneft and other state-controlled companies as they are prime sanctions targets.
Not sure how I'm supposed to implement a long/short strategy though, I'm just doing investment on the side of my studies. Maybe once I get my quant finance job I can beg the fund I work for to implement some ideas :p
if you can stomach volatility, absolutely
People seem to keep confusing "direct commodities" and "equities of commodities producers". Majority of the companies you are looking at are state run entities that can lose all their profits overnight cause the state needs them. The management and the cash flow stream of a "commodity producer" is very key.
Chart Cheniere vs GazProm over 1 year and let me know what you see.
You're right, whenever the government needs money, the state-owned entities are forced to pay out large dividends. But this benefits regular shareholders also. I suppose there's a risk of state-appropriation, if that's what you meant, but I honestly don't see this as realistic. Arbitrary confiscation of shares or conpany profits would utterly wreck their economy and piss off a lot of very powerful oligarchs.
Russians don't invest in Russia, and any non state owned/affiliated company operating there is incorporated outside its borders for a reason.
lol $RSK down 40% 2 days later
So now is it a buy?
Fair lol
I personally went in pretty hard yesterday and bought miners.
The times ahead will certainly be interesting. Hopefully the war will be over asap.
I repeat Russians don’t invest in Russia. While all is fair in trading and I work in FICC where geopolitics always moves us. You need to live with consequences when you are wrong. So anyone who wants to invest oligarchs funding a war sure hope is following the tactical fight on the ground cause your investment is going to zero if you chose the wrong pony in the race.
This has been aging well
How about now with stuff dropping >80%?
Eos nostrum eos odio quo possimus est. Non aut et explicabo et. Dolor itaque esse assumenda illo. Sint et nihil inventore ut.
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