I Gotta Have More Cowbell Handball

By now you know quite a bit about what is happening between Georgia and Russia. You probably also know that the Russian stock market and the currency have both been hit pretty hard and Konstantin Igropulo (number 35) on the Russian Handball team looks pretty worked up about the whole thing as his team went down to Iceland 33-31. The Market Vectors Russia (RSX) dropped almost 10% this past week. The dollar went up about 3/4 of a ruble, which is a big move, during the same time period. This will be a great example to learn from. This is a panic caused by what might be a black swan (anyone know if tensions between Georgia and Russia have been an ongoing thing making this conflict inevitable? if so, then no black swan). This sort of thing has happened countless times before. Some sort of military something or other that catches the market by surprise causing a swift decline followed by the inevitable snapback. The reason why this is a great example to learn from is the most people are not going to chase heat in Russia. It is not the ideal destination for most volatility tolerances and so as jumping into something that is not right for you as an investment destination is not smart you can pay close attention and watch it unfold. This sort of thing, albeit with different particulars, has happened countless times and the result seems to always be the same; big, fast decline followed by a snapback. While any single episode could be different, different doesn’t happen very often. This kind of event...

I Gotta Have More Cowbell Handball

By now you know quite a bit about what is happening between Georgia and Russia. You probably also know that the Russian stock market and the currency have both been hit pretty hard and Konstantin Igropulo (number 35) on the Russian Handball team looks pretty worked up about the whole thing as his team went down to Iceland 33-31. The Market Vectors Russia (RSX) dropped almost 10% this past week. The dollar went up about 3/4 of a ruble, which is a big move, during the same time period. This will be a great example to learn from. This is a panic caused by what might be a black swan (anyone know if tensions between Georgia and Russia have been an ongoing thing making this conflict inevitable? if so, then no black swan). This sort of thing has happened countless times before. Some sort of military something or other that catches the market by surprise causing a swift decline followed by the inevitable snapback. The reason why this is a great example to learn from is the most people are not going to chase heat in Russia. It is not the ideal destination for most volatility tolerances and so as jumping into something that is not right for you as an investment destination is not smart you can pay close attention and watch it unfold. This sort of thing, albeit with different particulars, has happened countless times and the result seems to always be the same; big, fast decline followed by a snapback. While any single episode could be different, different doesn’t happen very often. This kind of event...

$406 Billion?

According to this article from MarketWatch Russia’s foreign reserves are $406 billion. Obviously the country has been helped by strong prices and demand for resources. Russia has also benefited from a strong currency and generally positive economic trends. There are a slew of political issues that some view as very risky and still others view the various antics as more noise than anything else. I maintain a little exposure for just a few clients (and personally) with Lukoil. I believe the economy is a juggernaut that is becoming more globally relevant but anyone that adds it to their portfolio needs to realize they are adding volatility, even relative to emerging...

$406 Billion?

According to this article from MarketWatch Russia’s foreign reserves are $406 billion. Obviously the country has been helped by strong prices and demand for resources. Russia has also benefited from a strong currency and generally positive economic trends. There are a slew of political issues that some view as very risky and still others view the various antics as more noise than anything else. I maintain a little exposure for just a few clients (and personally) with Lukoil. I believe the economy is a juggernaut that is becoming more globally relevant but anyone that adds it to their portfolio needs to realize they are adding volatility, even relative to emerging...

A BIK House

State Street is launching its version of a BRIC ETF today (well scheduled for today) under ticker BIK. As I understand it, the fund should be mighty mighty. Ahem. The break down should be as follows; China 37.59%, Russia 32.33%, Brazil, 22.80% and India 7.28%. It is heaviest in energy, no shock, at 36.6%, financials 28.5%, telecom 14% and then a few others in single digits. China Mobile (a holding for a couple of clients) is the largest holding in the fund at 8.97% followed by Gazprom 7.09%, Lukoil (client and personal holding) 6.59%, CVRD (yet another client holding) 4.96% and Petrobras rounds out the top five at 4.60%. Infosys weighs in for India at number 10 with a 3.41% weight. You may know that Claymore has a BRIC ETF (EEB) of its own and if I recall correctly iShares has one in the hopper. BIK is noticeably different than EEB. EEB only has 4.77% in Russia and has 45% in Brazil. Hard to say which one is “better.” Obviously if Brazil is the best market in the world EEB will do better and if Russia turns out to be the best BIK will be the better choice. But there is no way to know ahead of time. The benefit to this type of fund is obviously getting the exposure to what have been and could continue to be very hot markets without single stock risk–by any reasonable definition. The downside is that it would not makes sense to hold the fund if you were bearish on one of the countries. In taking the riskier path of picking a...

A BIK House

State Street is launching its version of a BRIC ETF today (well scheduled for today) under ticker BIK. As I understand it, the fund should be mighty mighty. Ahem. The break down should be as follows; China 37.59%, Russia 32.33%, Brazil, 22.80% and India 7.28%. It is heaviest in energy, no shock, at 36.6%, financials 28.5%, telecom 14% and then a few others in single digits. China Mobile (a holding for a couple of clients) is the largest holding in the fund at 8.97% followed by Gazprom 7.09%, Lukoil (client and personal holding) 6.59%, CVRD (yet another client holding) 4.96% and Petrobras rounds out the top five at 4.60%. Infosys weighs in for India at number 10 with a 3.41% weight. You may know that Claymore has a BRIC ETF (EEB) of its own and if I recall correctly iShares has one in the hopper. BIK is noticeably different than EEB. EEB only has 4.77% in Russia and has 45% in Brazil. Hard to say which one is “better.” Obviously if Brazil is the best market in the world EEB will do better and if Russia turns out to be the best BIK will be the better choice. But there is no way to know ahead of time. The benefit to this type of fund is obviously getting the exposure to what have been and could continue to be very hot markets without single stock risk–by any reasonable definition. The downside is that it would not makes sense to hold the fund if you were bearish on one of the countries. In taking the riskier path of picking a...