The turmoil between Russia and Ukraine has created a rare opportunity to buy low-cost assets, according to some large investors. For others, securities are cheap for very good reasons and they say Russia should be avoided.
“When I went to look for all these cheap stocks and said, ‘Here we go, this is the cheapest market in the world, I know I can find some really nice alpha,’ I found it much more difficult,” said Jamieson Odell, deputy global portfolio manager at emerging and frontier market hedge fund firm Caravel Management.
Odell, speaking Monday night at the NYSSA Russian and Central & Eastern European Capital Markets Conference, said there were some excellent Russian retail, food and Internet companies, such as Magnit, but their stock valuations were high and therefore expensive relative to the potential reward. And cheap stocks, he said, usually have “really big” corporate governance issues or “terrible” balance sheets.
“The cheap things really are cheap for a reason,” Odell said.
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