On the first of each month, I send a letter to our investors describing what we see in the world relative to their portfolios. We always try to identify some “big picture” issue, usually one that is overlooked. The goal is to have our clients understand our thought process.

One of my favorite analytical devices is to compare quantitative data with investor sentiment. Pitting the cognitive versus the quantitative often reveals a “perception gap” — a difference between investors’ emotions versus the underlying market data. Think of it as “what people are thinking” versus reality.

The news out of Eastern Europe is a perfect example of this. Russian President Vladimir Putin’s aggressive military grab in Ukraine has been dominating global media coverage. Markets were off dramatically yesterday, with Russian’s bourse down 10 percent for the day. In the U.S., markets fell about 1 percent, although the accompanying media angst might have made you think it was triple that.

Regardless, it is merely the latest global event that is dramatic, dangerous — and mostly irrelevant to investors.

Why is that?

Continues here

Category: Investing, War/Defense

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

9 Responses to “The Putin Put: Ukraine Dragging Down Your Portfolio?”

    • lisnyk says:

      willid3: the map is confusing is quite wrong. Russian-speaking does not automatically equates with pro-Russia. Recall, when Yanukovych was pushing for Associated agreement with EU (2012- most of 2013) – NOT ONE meeting took place against it, and instead go to “pro-Russia” Eurasian Agreement. Not one!

  1. Robert M says:

    it seems highly unlikely that the Russian invasion of the Ukraine will be a minor economic event. The only real way to display displeasure w/ this action by the US, short of sending in a Marine Brigade as a training mission for the Ukranian armed forces, is pulling the plug on Russia’s ability to run their kleptocratic economy. This means closing down Russia’s access to the Western Banking and insvestment system in the same way Iran’s is. While I put the probability at 1 in 5 given the impact it would have on Europe, it is the only to focus Russia’s mind.

  2. VennData says:

    Putin wsnts Ukraine to pay market for energy. He personally holds tens of billions. You call the oligarchs. I call them equity lords.

  3. BoKolis says:

    Putin is Bloomberg without oversight or accountability and is proving himself to be just another flighty Russian.

  4. Robert M says:

    As a blog that prefers verification to ideas w/ data here to support above comment, “Whatever Russia’s intervention represents, the immediate economic leverage the United States has over Russia is limited, according to experts. The most potent weapon Washington could use would be sanctioning Russian banks, companies, or individuals—measures similar to the sanctions that have proven so damaging to Iran’s economy.”
    http://www.theatlantic.com/international/archive/2014/03/crimea-the-greatest-challenge-to-geopolitics-since-the-cold-war/284181/

    • Iamthe50percent says:

      i.e. no more bales of US $100 bills from New York banks to Russian banks in support of the Russian Mafia’s money laundering. Oh, wait! The New York banks are making a fortune on those transactions. The US will never do anything about it.

  5. catclub says:

    ” sanctioning Russian banks, companies, or individuals—measures similar to the sanctions that have proven so damaging to Iran’s economy.”

    Of course, we also need Russian cooperation to continue the sanctions against Iran.
    Remember that Russia supplied various pieces in the Iranian nuclear systems.
    Harsh sanctions almost guarantee failure on Iran – and Syrian chemical weapons.