If this is not a "total meltdown", what is?
Good point, Vi. Can't argue. <gg>
But perhaps I can shed a little light on where my pessimism is coming from.
Early last year, I bought into Lexington Troika, with the words: "I can't believe I'm doing this." Never, in my wildest dreams, did I think I would be investing in Russia, knowing what I knew about it. But the fund was going gangbusters. So I decided that I might pick up some "easy money" by making a short-term investment, and then pull out when the fund started going down, as I was sure it inevitably would. In the event, I did pull out (although not quite early enough).
I was skeptical about the Russian market when it was high,and I am still skeptical about it. Particularly when it is well-nigh impossible to get the kind of data about Russian companies that we are accustomed to getting about American companies.
The same thing is true of just about any foreign firm, of course. But the structure of the Russian economy is so bizarre, that this lack of transparency is even more of a problem.
Now that I think about it, I have to ask what "transparency" would actually do? What would it mean to learn that a firm's ROE is 20%, for example, if it got that return by not paying its taxes, say? Or what if the company is renationalized tomorrow?
In short, the political situation is so unsettled, the economic course the government(s) will follow is so hard to predict, that I would suspect the stock market is not only not going to recover, but might easily decline still further. In fact, who knows -- it may get shut down altogether! (Not an impossible turn of events.)
But I repeat that I am not an economist. And Russians are typically alarmist about everything. Alarmism is contagious, so perhaps I have simply caught the disease from reading the Russian press every day...
jbe |
