I've been getting questions regarding the Russian invasion of Ukraine, my investment in Polymetal International $POLY.L and the implications to the economy and the markets. I did not want to rush to make a video since there were so many uncertainties but now after a week, we can understand better the situation.
I know many people see value opportunities in Russian stocks but the same principles we use to value stocks in the US cannot be applied to Russia right now. First of all, you will need a massive margin of safety because of all the uncertainties. The Ruble $USDRUB is in free fall. With all these sanctions, the Russian economy is on the brink of collapse. There is not even the certainty that the current Russian Federation as we know it will still be here in a year. Value investing is not just applying some formula to calculate the intrinsic value of a stock. I will not recommend anyone touching Russian stocks right now.
I already sold my shares of Polymetal International $POLY.L . Despite gold $GOLD prices going higher the stock crashed. It needs to be a tenbagger for me to recover the losses. It makes no sense to wait. Sometimes you have to accept the losses and move on.
There are certainly investment opportunities developing in Europe with this war such as in Energy $OIL , and aerospace and defense but always base your investments on fundamentals not geopolitics.
Watch the full video on YouTube:
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