Russian Long Thesis in Two Charts
Russia appears to be one of the cheapest markets on the planet today. Yes, the planet is generally overvalued, but the discount shown below is difficult to ignore. It becomes even more difficult to ignore when one considers that the median age amongst middle eastern oil producers ranges from 18 to 29 with up to 40% of the population under 15 years old. With food making up anywhere from 25% to 50% of this young population’s total consumption, those hoping for a quick fix to the “stone throwing” in today’s age of instant communication are likely to be disappointed. On the other hand, those looking for alternatives to middle eastern oil, might look to Russia, the world’s largest oil producer, and the Market Vectors Russia Fund (RSX) with 37% of net assets invested in the oil and gas sector.