What Does It Take to Invest in Russia?

Published on
December 23rd, 2020
Duration
51 minutes

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3

What Does It Take to Invest in Russia?

The Interview ·
Featuring Harvey Sawikin and Haley Draznin

Published on: December 23rd, 2020 • Duration: 51 minutes

Harvey Sawikin, co-founder and lead portfolio manager at Firebird Management, a fund dedicated to investing in frontier and emerging market equities in Eastern Europe, joins Real Vision editor/reporter Haley Draznin for a conversation about the development of emerging markets over the past several decades and the sector outlook. Firebird started out as the first Russian portfolio equity fund and has since expanded to include other countries in the region such as Kazakhstan, Georgia, and Romania. Sawikin shares why his investment strategy differs in more mature and developed markets, how a typical investor in emerging markets has evolved, portfolio repositioning amid the Covid-19 pandemic, and the value of travel in investing. Filmed on December 18, 2020. Key learnings: Emerging markets are often a blind spot for investors—finding them requires assessing liquidity risk and geopolitical climate. Dollar strength and weakness is the macro factor that has the biggest impact on emerging markets. The disinflationary environment has led Firebird to reposition its portfolio towards more growth stocks in the Eastern European region and less towards cyclicals.

Comments

Transcript

  • ND
    Noel D.
    26 December 2020 @ 19:46
    6 0
    Draznin - great interview. Short, direct, relevant questions. You knew your stuff. You let the interview talk. RVTV - give us more Draznin.
    • ND
      Noel D.
      26 December 2020 @ 19:46
      1 1
      *interviewee*
    • JL
      Jason L.
      1 January 2021 @ 19:03
      0 0
      Agree. Give us more Draznin please
  • FP
    Fram P.
    23 December 2020 @ 11:47
    2 0
    Harvey do you think with this massive russian Hack there will be a similar China–United States trade war with similar sanctions etc. now that Biden will be president. even though trade is minute between russia–United States but they could sanction banks (sperbank) and other companies listed in the USA etc TCS is that Tata consultancy services
    • AB
      Alastair B.
      23 December 2020 @ 15:16
      5 1
      My bet is the opposite. Balancing China will require bringing Russia in from the cold, regardless of current issues.
    • AP
      Alexander P.
      27 December 2020 @ 18:25
      0 0
      TCS here is the Tinkoff Group. I'd say they are more of a high-tech bank than a Fintech company, but I guess the line is blurred.
  • SB
    Stephen B.
    26 December 2020 @ 22:36
    3 0
    With US stocks so pricey and with a declining USD, i had decided to move some of my portfolio over to EM, including Russia. This interview was therefore priceless for me.
  • DT
    David T.
    23 December 2020 @ 11:49
    3 4
    Privatization in Russia was a rip-off of Russian public instigated by former KGB and Communist party officials that created caste oligarchs that later brought Putler to power. You may make money in Russia but, you may not take it out without Putler’s permission. Before investing in Russia, read more about Hermitage Capital Management and Bill Browder’s story. “Capitalist will sell us the rope we will hang them with”- Lenin.
    • AR
      Alexander R.
      23 December 2020 @ 16:05
      3 0
      David, I share your well based distrust. With that in mind, how is it different from investment in China ? You might not be able to get your money out of Russia, but the risk is still smaller than investment in Tesla. They do have corruption but in the case of investors it works in your favor. Gasprom or Lukoil will do just fine. They have unbelievable natural resources and they are cheap and we are at the beginning of new commoditie cycle. Rubble is also backed by gold,
    • SB
      Stephen B.
      26 December 2020 @ 19:52
      1 0
      You have it the wrong war round. Bill Browder is widely understood to be a CIA front and the events you refer to are popularly known as "the Rape of Russia".
  • PG
    Philippe G.
    25 December 2020 @ 13:46
    2 0
    Very interesting - appreciate the handful of names given which are somewhat accessible to Western retail investors... Perhaps a bit more geopolitical commentary would have been beneficial...seems that the recent Armenian-Azerbaijani conflict came out of nowhere...yet some say it was foreseeable...
  • JL
    Jason L.
    24 December 2020 @ 14:52
    1 0
    This is SO interesting. A unique and eye-opening perspective on a brilliant hedge fund trading philosophy and strategy. Whoever found this guy should get a raise/bonus! Great job Haley, per usual.
  • TS
    Tom S.
    24 December 2020 @ 01:40
    1 0
    $RSX đź’Şđź’Şđź’Ş
  • HV
    Hasmik V.
    24 December 2020 @ 00:37
    4 0
    Finally someone said something positive about Russia, otherwise all the us news coverage is so negative.
  • AD
    Anthony D.
    23 December 2020 @ 19:58
    1 0
    Very good interview ! Harvey , speaking about the Russian BoP, how do you explain the RIB is si cheap given the robust fundamental situation of Russia. Interest rate cut is of the table for now and even considering the sanctions risk (which is not High considering the last 5 years) , the RUB is still down 17% ytd. Do you expect a recovery soon ?
  • RM
    Richard M.
    23 December 2020 @ 14:03
    7 0
    Excellent interview Haley - really interesting! I will definitely check out Firebird Management and their offerings.

Chapters

  1. 00:01:09
    Starting the First Emerging Market Equity Fund
  2. 00:04:16
    Investing in Russia
  3. 00:09:03
    Political Risk in Emerging Markets
  4. 00:12:54
    Investment Strategy in Frontier Markets vs. Emerging Markets
  5. 00:16:58
    False Starts
  6. 00:20:54
    2021 Emerging Markets Landscape
  7. 00:25:18
    Portfolio Repositioning
  8. 00:27:50
    Emerging Markets ETFs Skepticism
  9. 00:30:33
    Defining a Typical Investor
  10. 00:32:53
    Market Efficiency
  11. 00:35:17
    Demographic Shift
  12. 00:38:41
    The Return of the Retail Investor
  13. 00:40:39
    U.S. Equities
  14. 00:42:59
    Positions in Gold & Bitcoin
  15. 00:46:42
    The Value of Travel