Remember the days of the dot.com era when everybody assumed great future wealth through Technology Shares? Any IPO that hinted at a tech back ground immediately raised fortunes as the new economy inspired visions of endless profits. The flagship companies of the day rose to enormous valuations during the exponential rise of the Internet. Yahoo, for example topped New Zealand in Terms of market capitalization back in 2000. Needless to say, that enthusiastic valuation has been brought back to Earth.
Today, we find ourselves in another Major valuation discrepancy. Apple has nearly reached the same market cap as the largest Country in the world, Russia. According to my valuation models, Apple is fairly priced here yet Russia is priced incredibly low. It appears that the current political issues involving Russia have clouded Investors’ judgment regarding the Long term Outlook for Russia. While further disruption may cause continued short term downward Spikes in the Russian market, it appears very likely to me that the Long term Investor will make a killing if he buys and holds Quality Russian titles. It may not feel right and be the right match for everyone but the math does not lie. Choose for yourself who you would rather be in the financial markets: