Vi, I agree that investing in Russia is risky,
but at some point I have to say it is time to buy. That is where I am at right now. Victor C. seems committed to going forward with reforms. If Russia decides to eliminate some of the reforms, that just means the recovery may take longer. Since capitalism has been tasted now, I agree with you that communism will not come back. Though the fear of it is hurting the markets.
I just keep thinking about the market cap of around $15 billion for Russian stocks. It is just incredible, especially with Gazprom and Lukoil counted in it. It has to be the deal of a lifetime.
To me, Sergei K. and the IMF were going somewhat in the right direction, but way too fast, especially with oil prices so low. Also, you cannot punch the oligarchs in the face and expect to survive. Victor C. has closer ties to them and that actually might help. It would be impossible to eliminate them in any sort of quick way, so appeasing them somewhat can create some stability. Capitalism has a way of squeezing out inefficiency, so some of the oligarchs may see their fortunes dwindle. I know the oligarchs are into banks heavy and many banks will not survive. It is the market at work.
Apparently in the streets this weekend the ruble has settled down a little to 8 or so to a dollar.
There is some on again, off again deal being brokered between Yeltsin and the Duma, we will see what happens.
As for the U.S. stock market, it could get fairly nasty fast. Next week should be interesting. |
