Author Topic: Why are Russian stocks so cheap?  (Read 61636 times)

rukawa

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Why are Russian stocks so cheap?
« on: November 28, 2013, 10:08:00 AM »
I was reading WSJ and noticed that the Russia has one of the lowest emerging market PEs. Right now it is about 4.5. Greece is a lot higher than I expected...I am guessing because of cyclically low earnings.

http://online.wsj.com/news/articles/SB10001424052702304281004579222303336597192


ItsAValueTrap

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Re: Why are Russian stocks so cheap?
« Reply #1 on: November 28, 2013, 10:12:31 AM »
Some people think that Russian stocks have very high levels of corruption.
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Packer16

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Re: Why are Russian stocks so cheap?
« Reply #2 on: November 28, 2013, 10:14:12 AM »
Part of it is much of Russia is a kleptocracy led by the government.  There are some good cheap companies there like Lukoil but firms like Gazprom are tied into the government with product pricing determined by Putin et al.  If you can seperate out the good from the bad, there are some bargains there.

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JBird

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Re: Why are Russian stocks so cheap?
« Reply #3 on: November 28, 2013, 10:27:21 AM »
Part of it is much of Russia is a kleptocracy led by the government.  There are some good cheap companies there like Lukoil but firms like Gazprom are tied into the government with product pricing determined by Putin et al.  If you can seperate out the good from the bad, there are some bargains there.

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Pauly

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Re: Why are Russian stocks so cheap?
« Reply #4 on: November 28, 2013, 12:08:49 PM »
I'm keeping an eye on the Sberbank thread, but when you read stories about how the Russians have managed to run up a $50 billion bill for a Winter Olympics it makes you think that Russia is a great place to make money vanish into thin air.

I'm sure it's that risk that's keeping their market cheap. My guess is that it's a market that will produce some big winners, and a lot of catastrophic losses.

turar

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Re: Why are Russian stocks so cheap?
« Reply #5 on: November 28, 2013, 12:11:59 PM »

wellmont

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Re: Why are Russian stocks so cheap?
« Reply #6 on: November 28, 2013, 12:32:44 PM »
because they are stocks in russia.

JBird

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Re: Why are Russian stocks so cheap?
« Reply #7 on: November 28, 2013, 12:43:25 PM »
I'm keeping an eye on the Sberbank thread, but when you read stories about how the Russians have managed to run up a $50 billion bill for a Winter Olympics it makes you think that Russia is a great place to make money vanish into thin air.

HBO's Real Sports did a segment on the Sochi games. The level of corruption is hard to believe, even for Russia. They built a ~30 mile road from the Olympic square to the Ski/Snowboarding mountain. For $9 billion USD. And of course the contractor is Government-owned Russian Railways. The program also mentioned that the total cost for the Olympics will be around $50 billion, which is roughly equal to the cost of all previous winter Olympics combined.
Woman and wine, games and deceit, make the wealth small and the wants great. - Ben Franklin

peterism

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Re: Why are Russian stocks so cheap?
« Reply #8 on: November 28, 2013, 12:50:26 PM »
Because there are just two types of investors in Russia. Those who lost their money and those who will loose their money.

Palantir

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Re: Why are Russian stocks so cheap?
« Reply #9 on: November 28, 2013, 01:58:56 PM »
In Soviet Russia, stocks short you!
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