A tale of a Russian Bull
But in the last few weeks, the market has given up every single dollar of that gain, free-falling over 15% in another breathtaking debacle, the kind for which the Russian market has become hilariously infamous. Hilarious, that is, unless you are in that market yourself. Then your emotions are rather different.
A serious crisis in Greece spread to Europe as a bailout was requested, and as traders saw the Western economies losing ground they realized that Western demand for Russian oil cold falter. Since the only real value contained in the Russian stock market is in the form of oil stocks, the bottom dropped out of that market.
Once again, the pathetic weakness of the Russian stock market has been brutally exposed, just in case there was anyone stupid or foolish enough to have forgotten how, just a few short months ago, the market totally collapsed, losing a shocking 80% of its value and wiping out the fortunes of many Russian investors.
The Russian market has no existence independent of oil prices, which have nothing to do with any activity in Russia. There is no innovation, no growth, no diversification. There is only Western demand for oil.
There is, in fact, no such thing as a Russian “stock market.” What exists in Russia in this regard is the same thing that exists in Las Vegas, Nevada, USA. There is no stock market in Vegas, there is just a gambling casino. Anyone with dumb luck can get rich there, but almost everyone walks away a loser. And that is what will happen to you, too, if you are dumb enough to plonk down your money on Russian equities.
There is an old saying in poker: If you sit down at a table to play and don’t see the sucker, the sucker is you. If you’re in the Russian stock market for any purpose other than to roll dice, you are a sucker.