Russia as an investment

I see that my shares in JRS (JPMorgan Russian Securities) are down 8.8% today, although they were down about 10% earlier on. The price is 616p.

What’s all the fuss about? The Mirror reports:

Russian President Vladimir Putin could soon launch a full or partial invasion

So that explains things, then.

Oh, you wacky Russians. I originally bought shares in JRS at 335p on 1 Jan 2015. A few weeks prior, Russians were playing games near the Turkish border. Russia was one of the cheapest PE ratios at the time, and I figured that if I was going to make a contrarian bet, it was now or never. I didn’t get in at the bottom, but I didn’t do badly. I should have waited a bit longer.

I had an interesting site that published worldwide CAPE ratios, but it now seems to be cyber-squatted. I did find the CAPE of Russia on a different site, though. It’s on 8.2. It’s the cheapest in a fairly short list. Brazil and shabbier parts of Europe aren’t covered. Italy and Spain are listed, but not Germany or France. But I digress …

Back to Russia. I figured that Russia was worth investing on a 10 year basis. The CAPE is pretty cheap at the moment, although not as cheap as when I first bought in. If I was looking to buy in – and I haven’t discounted the possibility – I think the best thing to do is wait. Things could get worse, which means cheaper. I found that shares can go down a month or two even after big news is announced.

So I figure it’s too early yet. Of course, we only get to know the optimal strategy with hindsight, and we can only guess at risk, reward, opportunity, and opportunity cost.

So, in summary, I am invested in Russia, and have no plans to either buy or sell at the moment.

Looking broader afield, I see that the US is on a CAPE of 29, which I judge to be “too high”. I will note, however, that the CAPE for the US has been high in the past, and the stock market has done better than the UK. It seems that the US is just a better, more dynamic economy than the UK. Sigh.

India is on a PE of 23, which puts it too high, in my books. I’ve not been following the talking heads on India, but I just vaguely recollect that there was a lot of hype over it. That made me especially uninterested.

Other countries that don’t take my fancy: Canada (on a PE of 21), Italy (18), Japan (19) and China (15).

Countries that do look interesting, although I have no intention of investing: Spain (12), Hong Kong (12), and Australia (15).

If I were Australian, I’d feel comfortable about investing in my domestic market at the time. Good on ya, cobber.

The UK is quite good, at a PE of 13. Stockopedia reports that the ASX (FTSE All Share Index) is 14.5 on a trailing basis. I always prefer the trailing basis, as I think that any forecast bases are vastly optimistic. So I think the UK stock market is in good shape, actually, and investor should not be fretting. At least that’s the way I feel.

About mcturra2000

Computer programmer living in Scotland.
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