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March 23, 2005

Russia Today, Wed., March 23, 2005, 12:12 PM

When I started my series on Russia on March 14, I gave a few high quality Russian stocks and then said they were too pricey too buy today. I then had to step back and ask myself, why write about something good, and then state: "But don't buy it!"

It's not as if I'm a professional wordsmith, and have managed the skill of speaking with forked tongue.

The problem with Russia today is not with Russia, but with there being more sellers than buyers of Russian stocks. The index is off 7.5 percent in the past two weeks.

Why Russian stock prices are on the decline is not a topic you want to get into with a Russian " unless you've got two weeks to listen to an answer, by which time the market has changed anyway.

I suspect that Russian stocks are being sold because of something Alan Greenspan told Congress almost to the day (March 2) Russian stocks started to fall. To wit: "Economic Destabilization", and I wrote about it in my blog as a watershed event.

The reasons for Greenspan's concern, however, are not real estate speculators in Moscow; the problems as he sees it are homegrown. And as money managers get nervous, and less bullish, where do they start pulling in their horns? They sell securities in markets of the world where they perceive higher risk, which is Russia, China, and Latin America.

That's not to say that U.S. money managers are doing the right thing, but they tend to do the obvious thing.

The question is, what have they in fact been doing since the start of the first great bull market of the present century? For that, you'll have to look at a two-year chart of the MTMS (Russia index) vs the SPC (S&P 500).

Posted by Posted by Bill Cara on March 23, 2005 11:59:00 AM | Category: Russia