I started this post in October 2020 and never finished it.
An article describing why the Russian stock market is valued so ‘cheap’. It is a critical piece mentioning a bunch of (good) reasons. The mentioned high dividend yields might have been used as a risk indicator (they often are), but as I see it a war was not mentioned or foreseen. We find ‘war’ two times in the artice: once as in ‘warning’ and once as in ‘trade war’. This reminds us that many more things can happen vs our imagination or forecasts.
When drafting this post I listed the below as potentially interesting idea after the article or much later (TTLK was a few months ago). Obviously the level of interest is an entirely different now. If it is good for one thing, it might be to highlight the usefulness of the country factor or domicile. Nowadas, this characteristic is often dismissed, since many corporations sell their products globally and thus their total sales/profits might much more depend on the global economic development/cyclicality instead of the economic state of affairs in their specific domecile (often chosen for tax reasons), and yet, this one characteristic might have some relevance in our portfolio risk analysis. Today, we all think about war or what is the probability that a western country, say Germany, will be sanctioned in a devastating way, but… it might be something different we just don’t think about: much higher taxes/social costs, business unfriendly regulation, etc… [insert sth. we just can’t imagine today, as if that was possible]
- Novatek (NVTK)
- MMC Norilsk Nickel PJSC (MNOD LI, GMKN RU)
- Globaltrans Investment (GLTR)
- TTLK RM (RUS telekom)
- Transneft
(Edit: the sunny picture is the picture I chose in 2020. Today a picture with a cloudy sky would be much more fitting)
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