Author Topic: Why are Russian stocks so cheap?  (Read 66834 times)

frommi

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Re: Why are Russian stocks so cheap?
« Reply #140 on: September 19, 2014, 09:38:45 AM »
sorry to hear you jump ship, I will stay on the way John Templeton told us

When you meant me, there is nothing to be sorry about :). Look at the lukoil thread to see how the world in russia looked like 7-8 month ago before the Ukraine crisis. It looked like Putin would be a lot more business friendly in the future etc. And now look at the current dilemma. I see my investment in russia as a failure that cost me no money, so everythings fine.
Think about what will happen in russia with oil prices a lot lower than today. I doubt that any private asset in russia is safe from Putin in such a scenario.



JBird

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Re: Why are Russian stocks so cheap?
« Reply #142 on: September 20, 2014, 09:26:09 AM »
When you meant me, there is nothing to be sorry about :). Look at the lukoil thread to see how the world in russia looked like 7-8 month ago before the Ukraine crisis. It looked like Putin would be a lot more business friendly in the future etc. And now look at the current dilemma. I see my investment in russia as a failure that cost me no money, so everythings fine.
Think about what will happen in russia with oil prices a lot lower than today. I doubt that any private asset in russia is safe from Putin in such a scenario.

When I started that thread I wrote
Quote
A final variable well worth considering is the country-risk that Russia presents. The Russian Government has proved its ability to commit folly against Russian oil companies. Ten years ago the Russian Government brought down Yukos Oil swiftly and illegally. When I created a mathematical expectation of Lukoil’s stock performance over time, I did so with the assumption there was a 20% chance that the Russian Government would take Lukoil’s stock price to zero.

And then people responded by saying Putin is a maniac. And of course they were right. So I'm not sure what you're talking about.
Woman and wine, games and deceit, make the wealth small and the wants great. - Ben Franklin

frommi

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Re: Why are Russian stocks so cheap?
« Reply #143 on: September 20, 2014, 11:21:35 AM »
And then people responded by saying Putin is a maniac. And of course they were right. So I'm not sure what you're talking about.

On page 3 or 4 there is this stuff from Jim Rogers where he talks about russia, and i was at that point in time under the impression that the political situation gets better over time. But it has not improved, it got worse and this is just 10 months ago. So when you discounted the political system with 20%, don`t you think you now have to use a higher discount? And since this discount is not really quantifiable, why is the market wrong with the current discount?
The problem here from my point of view is that when the business gets under pressure the political system gets instable, too. Reminds me a bit of buying on margin.

But it was clearly my fault to not see this problems earlier, and i don`t want to blame anyone except me for that. So keep up the good work, i learned a lot!
At BP i underestimated the fines and open business claims, so again this was my fault not anyone else`s.

JBird

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Re: Why are Russian stocks so cheap?
« Reply #144 on: September 20, 2014, 12:07:26 PM »
We haven't seen Lukoil's profit materially decrease because of Putin's madness. So I don't yet see a reason to decrease my valuation. If all out war breaks out in Russia, the market price goes to hell, but Lukoil continues making 9+ billion a year, why should my valuation go down?
Woman and wine, games and deceit, make the wealth small and the wants great. - Ben Franklin

fareastwarriors

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Re: Why are Russian stocks so cheap?
« Reply #145 on: September 20, 2014, 01:27:57 PM »
I sold my Lukoil position for moral reasons. I'm soft like that.

JBird

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Re: Why are Russian stocks so cheap?
« Reply #146 on: September 20, 2014, 01:49:56 PM »
I sold my Lukoil position for moral reasons. I'm soft like that.

I'm not far behind you.
Woman and wine, games and deceit, make the wealth small and the wants great. - Ben Franklin

flixil

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Re: Why are Russian stocks so cheap?
« Reply #147 on: September 24, 2014, 02:41:43 AM »
Russia's Bashneft confirms cancelation of unit sale to Sistema

http://en.itar-tass.com/economy/750966

flixil

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Re: Why are Russian stocks so cheap?
« Reply #148 on: September 24, 2014, 02:50:29 AM »
==
JSFC Sistema, the largest publicly-traded diversified holding company in Russia and the CIS, said the acquisition of a 98% stake in OJSC United Petrochemical Company from the group's subsidiary, JSOC Bashneft, has not been completed.

It said Bashneft retained ownership of UPC.
==


60°North Investments

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Re: Why are Russian stocks so cheap?
« Reply #149 on: September 26, 2014, 03:49:48 AM »
Sistema down another 20% today. Have to say that it's not pleasant to look at all. Now it's priced at 5bUSD EV, which is less than the value of their stake in MTS. There's all kinds of rumors that they need to pay back Bashneft dividends worth some billions, raise cash, Evtushenkov still being in home arrest etc. It certainly does feel at times whether it's a dumb thing to just hold on (not really cash to buy more) even though it looks worse and worse every week. I'm planning on staying with it though, I've got time to wait and see whether the whole thing gets taken away or what happens (looks like it's priced according to Bashneft stake being taken away). Would be very interesting to know who are the entities on the buying side of all these trades.