From Russia with Love....
Discussion
I'm interested in your thoughts.
I bought into Russia just after Crimea kicked off, thinking the P/E of around 5 was good value. Oh how foolish. I then watched as planes crashed and Ukraine descended into a s**tstorm and thought...hmm another buying opportunity. So I doubled up. Foolish x10
So today, the rouble is in freefall, capital is leaving the country faster than rats off a sinking ship, OPEC is playing a long game with oil and I find myself down 48%.
Half my head says...you don't really need the money so leave it, in 5 years time the world will be a different place. The other half says...it's going to sink further and Russia may implement capital controls therefore I may lose the lot. My heart says SELL and learn a valuable lesson....
Is anyone else in a similar position? Thoughts? Advice?
I bought into Russia just after Crimea kicked off, thinking the P/E of around 5 was good value. Oh how foolish. I then watched as planes crashed and Ukraine descended into a s**tstorm and thought...hmm another buying opportunity. So I doubled up. Foolish x10
So today, the rouble is in freefall, capital is leaving the country faster than rats off a sinking ship, OPEC is playing a long game with oil and I find myself down 48%.
Half my head says...you don't really need the money so leave it, in 5 years time the world will be a different place. The other half says...it's going to sink further and Russia may implement capital controls therefore I may lose the lot. My heart says SELL and learn a valuable lesson....
Is anyone else in a similar position? Thoughts? Advice?
It's going to get worse before it gets better. They burnt through $70bn trying to support their currency and today they say they aren't going to support it any more.
There is a valuable lesson to be learnt, but it's not by you. It's for Putin, don't f
k with America and the EU all at the same time!
There is a valuable lesson to be learnt, but it's not by you. It's for Putin, don't f
k with America and the EU all at the same time!i don't have any advice to offer, but when you say you bought in, what exactly do you mean. I assume you bought shares in a Ruski company and now they are struggling ? If that's the case then i suppose i would stay in, if you have gambled with what you can afford to lose then yes its a tough lesson, but it could be worse ! surely not all your investments have worked as well as you had planned ?
The day will surely come when the countries fortunes turn around once more. Some country somewhere will break the mould and by cheap oil or gas from them and hey presto your investment angle will come good, eventually.
The day will surely come when the countries fortunes turn around once more. Some country somewhere will break the mould and by cheap oil or gas from them and hey presto your investment angle will come good, eventually.
I've got a smallish exposure to Gazprom on the Frankfurt exchange which I bought in January. Like you i'm about 50% down. Very silly punt, but I never thought the currency issues would get anywhere near this bad, that combined with the sanctions and oil price means it's been a perfect storm for Russian equities.
It's now worth less than 4% of my portfolio so personally i'm sitting tight and forgetting about it. Russia does look very bleak at the moment so I wouldn't be surprised if i've not broken even after 5 years.
However, when Russia does hit it's bottom there are some seriously cheap shares out there. I wouldn't like to be the one that calls the bottom though..
It's now worth less than 4% of my portfolio so personally i'm sitting tight and forgetting about it. Russia does look very bleak at the moment so I wouldn't be surprised if i've not broken even after 5 years.
However, when Russia does hit it's bottom there are some seriously cheap shares out there. I wouldn't like to be the one that calls the bottom though..
Sberbank is currently showing as inactive.
Ruble has just been hit very hard.
Assuming your Russian holdings are part of a diversified portfolio today would be a bad day to sell.
P/Es are so low, it is difficult to see how they could go lower, doesn't mean they will not of course.
I too, was caught overweight in Russia/Eastern Europe just as that damn plane plummeted from the sky.
My solution, Obama and Putin in a room, no gloves, winner gets to abuse Merkal who isn't helping the situation.
Bigger problem is the effect on world growth, deflation or at least reduced inflation from reduced oil prices. The theory of lower pump prices causing more discretionary spending never pans out.
However if you used Russia as a punt....can't help you
Ruble has just been hit very hard.
Assuming your Russian holdings are part of a diversified portfolio today would be a bad day to sell.
P/Es are so low, it is difficult to see how they could go lower, doesn't mean they will not of course.
I too, was caught overweight in Russia/Eastern Europe just as that damn plane plummeted from the sky.
My solution, Obama and Putin in a room, no gloves, winner gets to abuse Merkal who isn't helping the situation.
Bigger problem is the effect on world growth, deflation or at least reduced inflation from reduced oil prices. The theory of lower pump prices causing more discretionary spending never pans out.
However if you used Russia as a punt....can't help you
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