Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Investment in Russia and Eastern Europe -- Ignore unavailable to you. Want to Upgrade?

To: djane who wrote (640)	9/6/1998 11:08:00 PM
From: P.T.Burnem	Respond to of 1301

I think, therefore, that sound investments made now in Russia will pay off: in telecoms-but not in mass media-in oil exploration, public utilities in some regions, transportation, high-tech and software companies, the construction industry and a few reliable banks. But: Know what you are buying. There is a big difference between companies run by Western-style management and publicly traded in the U.S. and those that are run by the old-style bureaucrats and their oligarchic masters. Which means that companies controlled by Russia's new magnates should be avoided (see "The last days of Boris Yeltsin," ). These companies are likely to be renationalized and ultimately resold, perhaps in part to foreign interests, in open tenders organized by foreign and domestic accounting, law and investment banking firms. The above is similar to what I said a few days ago: sell LUKOY and TNT, buy VIP. Sell "old Russia", buy "new Russia" if you must, it might pay off. The crisis cannot be ended by IMF loans or half-hearted reforms. It can end only when the idiotic privatizations of the early 1990s are reversed, some controls reestablished and the tycoons who pocketed the proceeds from Russia's exports forced to disgorge their foreign bank accounts. This Yeltsin cannot accomplish: He is the creature of the tycoons. Such measures may help stabilize the economy in the short run, but only the expense of further undermining the very concept of private ownership. These people [robber barrons] -not foreign investors-will feel the wrath of Yeltsin's successors. Indeed, selling foreigners a stake in the economy will be seen as the only real hope of putting Russia on a more prosperous path. Bullshit. Mr.Kvint is quite ignorant of Russia's history. Russia to foreign investment is what black hole is to matter. PTB