Russia is for sale at half price(!):
anyone dares? 20% of the holdings are Gazprom, so no ESG
Bought more Sberbank stock last week. Lowering average purchase price.
Also got in again at TCS Group (Tinkoff Bank), which had a 75% intraday gain on Friday.
Great thing is: can‘t lose more than 100% of your investment.
I love it:
Bolded added by myself.
I know we’re not meant to get political in non [COFFEE] threads but this is one of the reasons I’d consider investing in globally diversified developed markets ETFs, excluding EM (for instance VEVE, or VTI+VEA) rather than all countries (VT), for the lack of China and Russia exposure.
I wouldn’t touch Russian equities with a stick…
The sell off in tech equities was steep - if you have money burning a hole in your pocket, put it in the best cloud stocks.
I simply decided to buy more vt while there is a discount sale
Just notice that you buy ADRs (https://en.wikipedia.org/wiki/American_depositary_receipt), unless you directly trade on the Russian stock exchange, afaik. You might not be able to sell any of those if sanctions are extended.
Investing is not only about making money, it’s also about supporting the stuff you care about or want to bet on. Are you sure you want to buy Russian stock from the hands of current holders of said stock? (who maybe are Russians themselves) Whoever sells you that stock for cheap, needs your money even more right now. Not sure I would like any part of that.
TCS has (if I‘m not mistaken) GDR listed in London - but is legally a Cypriot company with a Russian subsidiary). SBER was bought in RUB at MOEX through IBKR - and yes, should be obviously at risk of sanctions or bans.
Politics aside, both have interesting, increasingly digitalised business models that transcend conventional banking - in a way hardly almost no „western“ bank seems to embrace. And they‘re very cheap (that said, there‘s a risk they’ll get still much cheaper, and also the risk of the Ruble devaluing further). I‘ve long had both stocks on my radar, it’s not that I‘ve bought them only for being cheap.
So I‘m basically helping people in dire need, you say?
Thanks for the update! Interesting that you hold RUB in your IBKR account
The idea is that if they make their president stop what he’s doing or eventually vote him out Then their stock price can recover
People owning stocks are in general probably not the ones in dire need anyway
[Edit: I think it is valid to raise the ethical aspect but perhaps further debate on that should go in another thread eg coffee ww3 thread]
What if there is war and eveyone would help boykott/sanction (incl. not buying assets) the agressor ?
Well, by when do you think those recover?
Could potentially take a very long time to get back to normal. Not sure if I would see this in a lifetime even though I’m not that old yet.
Yes. I don’t have any Russian single stocks but I consider dropping all my EM ETF’s just to make sure I don’t have any Russian assets.
Whatever helps you sleep at night. Or you could ask yourself: would Putin be happy that I’m buying Russian stock? In any case, there are many ways to make money, I’d consider something else.
I would say there is a big difference between investing and gambling.
A big seller are these guys.
I wouldn’t say they need the money more than most of other people/groups
Let the stocks tank, even though a holder who is not selling is not harmed directly, it can start hurting the oligarchs and politicians indirectly.
Interesting. I just saw a Twitter post saying that Russia has banned foreign holders of Russian stock to sell their shares. I googled it:
But when I open, it says something different:
I guess someone has misinterpreted something and it has already been corrected? I can’t see how Russia could enforce this ban. The trades are made by online brokers, it’s often not known who is the customer executing the trades. So they could just close Russian stock exchange to freeze any trades?
Euroclear stopped settling Russian securities. Guess, even if you’d like to invest, it wont be possible
If anyone has been waiting to apply investible cash it might be wiser to set limit orders on stocks or funds you would be happy to own for the long term vs. buying Russian stocks on knee jerk
In 2008 crash I thought I was smart buying bank stocks on discount but I did not yet recover my initial stake. In the meantime the overall market has gone up 300-400%.
Consider that if sanctions work as intended there is a good chance these Russian stocks might go bankrupt
That’s quite the ballsy move. How did you assess the risk-reward ratio on this one (especially the reward, and the probability of bankruptcy or no bankruptcy)?
Sberbank Europe is already failing, and given that the EU and most Western countries have frozen the Russian Central Bank’s foreign reserves, I would expect that, if this war was going to last more than a few weeks, the Russian Central Bank would not be able to provide foreign currencies to Russian banks subjected to a bankrun because depositors want to get back their foreign currency deposits. That would mean that most Russian banks would fail, including Sberbank.
More details in this excellent article.
Russians stock market already went to 0 in the past. Might happen again.
Absolutely. As I said above, I had my eyes on the two stocks for quite a while (having previously owned TCS and sold for more than 100% gain)
Sberbank is government-owned. Can’t go tits up.
The bank run and failure of their EU subsidiaries was to be expected (at least on Friday, and IMO priced in).