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XMFSinchiruna (28.56)

One-two punch of global market panic and the drop in oil makes Russia a buy, IMHO.

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September 16, 2008 – Comments (11)

If I had any cash in my account today, I'd be buying up a chunk of RSX, the Russia ETF.

Heavily weighted in oil and gas, today's continued drop in oil down towards $90, along with broader concern over the state of the world's economies led investors to flee the Russian equities en masse. After a 17% decline today, Russia halted trading. If I had cash on the sidelines, I'd be buying a small piece of RSX here, and watching carefull for further opportunities to buy in... perhaps even lower. Since I still view hard assets as the only sector to be in right now, I like Russia as an investment here. The ETF is also heavy in metals (>20%).

Just a thought. I know there are countless arguments to be made for where the greatest value lies right now, but I'm just saying that for me I would want at least some exposure to Russian commodities through RSX.

11 Comments – Post Your Own

#1) On September 16, 2008 at 2:59 PM, XMFSinchiruna (28.56) wrote:

http://www.ft.com/cms/s/6ff9306c-83f...nclick_check=1

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#2) On September 16, 2008 at 3:27 PM, starbucks4ever (99.51) wrote:

Even after the 50% haircut, Russian stocks are still very expensive.

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#3) On September 16, 2008 at 3:38 PM, leohaas (93.17) wrote:

The problem is that under Putin, no company is safe from government interference. Can you spell MTL?

In addition, there is a geopolitical risk. Some knunkleheads in this country seem to be hell-bent on starting a war with Russia over South Ossetia by inviting Georgia into the NATO. At least wait until that threat is gone.

Any investment in Russia now is speculative.

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#4) On September 16, 2008 at 3:55 PM, FleaBagger (31.07) wrote:

Gold and silver are still better. Look how cheap CDE and LMC are! They're priced for $10 silver to last forever.

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#5) On September 16, 2008 at 5:25 PM, camistocks (< 20) wrote:

TMFSinchiruna, I agree. Sometimes you need to try to catch a falling knife... I think it will rebound strongly tomorrow.

Also, as long as there are no corrupt politicians at the top (eg Yeltzin), Russia should become a wealthy and modern country, with a growing middle class.

And a growing stock market of course... which is basically a commodity play.

 

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#6) On September 16, 2008 at 6:31 PM, goldminingXpert (31.11) wrote:

I love investing in Communism! In Russia, stock buys you.

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#7) On September 16, 2008 at 6:45 PM, camistocks (< 20) wrote:

goldminingexpert, who brought the world this financial mess: Russia or... the free market USA?

BTW Russia is  not a communist country anymore. Where did you get that? Do you still live in the Cold war mentality?

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#8) On September 16, 2008 at 9:55 PM, XMFSinchiruna (28.56) wrote:

FleaBagger

You got me there.  :)

camistocks

I have no idea what it will do on any given day... I don't trade on that kind of timeframe... I'm thinking long-trerm.

goldminingXpert

Difference between that and our socialist economiy where an AIG is bailed out??

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#9) On September 16, 2008 at 10:08 PM, EScroogeJr (< 20) wrote:

cami, just one basic fact. Oil will never reach $100 again, period. Forward PEs are meaningless, and even those PEs point to a market richly valued as compared to Turkey or India. 

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#10) On September 17, 2008 at 7:49 AM, XMFSinchiruna (28.56) wrote:

EScroogeJr

Sorry... but there's no way you can reasonably state that as fact. You have no idea what might come next. If we took military action against Iran and they retaliated with an attack on a tanker through the straight, you'd see $200 oil so fast. Also, the next wave of dollar weakening to come on the heels of all this Fed spending to bailout the financial system will be the other catalyst that will drive oil higher again. I think oil is far more likely to regain $100 in the near-term than it is to never reach that mark again.

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#11) On September 17, 2008 at 5:45 PM, camistocks (< 20) wrote:

TMFSinchiruna,

I think we agree on the long term time frame, 5 years or more. I just wanted to show, how undervalued this market is right now. BTW, RSX dropped again...

eScrooge,

oil will reach $300. I don't know how you say it will never come back? Only because of this correction? Check out a 10 year chart and you will see that it has corrected several times 40+%.

The difference with Turkey and India, is that T and I need what Russia produces.  

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