Jeffrey Gundlach
I have been paying attention to Jeffrey Gundlach for a while now. If anything, his arguments make sense to me. And then, as my mind drifted into thinking about markets, Mark Mobius appeared on Blooomberg and said that:
“Despite the fact that a lot of people think that we are entering into a bear market, we don’t believe so. This is a correction in an ongoing bull market.”
Mark Mobius
Whoa… wait. This is interesting. Mark Mobius is an accomplished authority in the investment world. And he is bullish on BRICs. Well. Let's look briefly into one of them. To use a Yakov Smirnoff's antimetabole, in America, you buy oil. In Russia, oil buys you. Let’s say it slowly: one…trick…petro…pony.
"In the near-term, the pace of Russia’s recovery will depend to a large extent on the path of oil prices... But a more likely scenario is that oil prices fall back as the pace of global recovery ultimately disappoints and the dollar rebounds further."
via RosBusinessConsulting
By the way, I am not saying that investors should never invest in Russia. If you know really well what you are doing, then by all means, give it a try. But sadly, Russia's EBITDA is highly cyclical, maintenance capex is high, personnel is shrinking to the tune of 1 million/year, the product (energy) is not proprietary, and historically, it is known to be a rather unstable shop. Yes, the 7-10 percent debt/GDP ratio looks decent. But I would make a wild guess that it’s just because very few brave souls would extend credit. And this is just a tip of the iceberg of issues. So…will US-induced deflation kill commodities and possibly disappoint Mr. Mobius on the Russian front?
"All are not cooks who walk with long knives." Another Russian proverb.
Posts
