Investing In Russia : Stay Away

Some things are worth repeating; Do not invest in Russia.
They will have your lunch one way or the other.
Russia comes up again and again. The prospects of wast natural resources and lots of very bright and privately pleasant people is enduring and alluring. But Russia has no culture for rule of law or property rights. It is a country of power, pure and simple. To play it one must use power bluntly, something very few are willing to do.
So the game of investing in Russia goes as this:
As political conditions improve (as they always do from time to time) asset prices (stocks, real estate etc) go up and reach a frenzy as everyone wants to catch the amazing opportunities.
Then, as is happening now, investors realize that Russia is an unprotected sink hole of problems, a fundamentally disadvantaged place to have your money people flee, and assets go into a tailspin free fall.
At some point it bottoms out, new people enter the political arena, economic growth , and all of a sudden the hope and opportunity sequence is there again. Round and round.

Let this be clear. Russia is inherently a bad place to have money as there is no protection there for your passive investment. You will ALWAYS in the end be had in Russia if you are not there with a gun yourself to protect your money. Any investment in Russia is not an investment as such but a pure speculation in the “Hope for Russia” game. This is a perverse game to play, only fit for the very very few.

The conclusion is therefore to keep your money away from Russia. Go there as a tourist on a river cruise and enjoy. But put your money to work somewhere where it is protected.

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