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David Stafford
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Student of markets, enjoys following their course.
My book:
Around the World in Several Pieces
  • Croatia Enters The Eurozone; Time To Start Investing In Eastern Europe?(GUR) 1 comment
    Jul 2, 2013 11:37 AM | about stocks: GUR, RAIFY

    I used to have a friend named Gur. I was studying film making at a school in Boston at the time, it was great. Gur I think was Turkish, and its cool to have friends doing film related studies, because you'll occasionally see them trapsing around with a "crew" and some expensive looking school camera. Those were the days.

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    Either way, GUR is also an etf. Its tricky perhaps to invest in eastern Europe. One can invest indirectly via banks like RAIFY(Raiffeisen Bank), etc. which are constantly expanding into Europe, another way is to invest into an etf.

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    ETF's like this have a propensity to have the lions share of their investments in "heavy" industries, or massive companies. Perhaps this is more of a reflection of the investment opportunities that are obvious and which capital can be dumped into per se, namely the obtuse sort of investment that is required of index formation, but none the less, GUR has some massive organizations in its pigeon coop, in keeping with this tradition.

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    According to Marketwatch;(http://www.marketwatch.com/investing/fund/GUR/holdings) some of GUR's major holdings include the likes of Gazprom, which as we all know is the Russian energy giant. Russia has an interesting history, one could argue that the Soviet Union wasn't "crippled" in Afghanistan, but in the oil markets, as in the final days of the Soviet Union, it was heavily reliant on energy deposits in the country north/center primarily in Siberia. There is an interesting story about a "rogue" or "visionary" energy prospector per se,(who discovered these reserves) if anyone care's to look into it, but none the less, its kind of a fantastic story none the less

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    Either way, apart from an 11% composition of Gazprom, OGZPY, we also have a 8.41% holding in AKSJF, aka Sberbank Rossia which is presumably a Russian bank, perhaps a future piece will examine this more in depth. Another 7.92% of the portfolio is comprised of LUKOY, aka Lukoil Holdings. This is also of course another Russian energy play.

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    There's a 4%(3.9%) stake in a Turkish bank which is perhaps somewhat interesting; namely Turkiye Garanti Baranksi or something of the like; TKGBF, which is perhaps interesting and none the less reminiscent of Turkey's euro-aspirations. Another holding which is perhaps of note is a 3% holding of a mining company; NILSY or Norilsk Nickel and Mining, which is of course true to form with such an ETF(heavy industry capital).

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    We have other similar companies comprising the greater than 1% holdings of this portfolio, and who could forget, the jaguar in the tree going unnoticed, the ever present holding in a telecom company. Yes that Cheshire cat is here as well, in the guise of MBT; Mobile Telesystems; with a holding % of 2.28%.

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    Macro; the portfolio is 30% Financial, and 33% oil and gas. Hence together we have a picture of an ETF that has heavy concentrations in specifically Russian banks and Russian heavy industry.

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    Not to really paint with too broad of a brush; but hence we in essence have a very Russian centric etf. This is great if this is what one is looking for, but perhaps in sticking to my initial findings(didn't really mention these) it might be better to get a foothold into specifically eastern Europe, think the border between the Hun and Holy roman empire region, kind of along the diagonal formed by Moldavia, one may want to invest tangentially through more mainland European companies(imagine a line disecting the traditional Alani territories, and or regions comprising and extending to the west from the Ancient and interesting Cucuteni paleolithic culture(diagrams located at end of piece)). For example as mentioned earlier, large European banks, like Raiffeisen(OTCPK:RAIFY) bank from Austria, which is expanding into this zone and Orange for ex; and other traditionally euro-centric cell carriers, already have a heavy presence in this zone, even Starbucks has a smattering of locations in countries such as Romania etc.

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    Needless to say, ETF's may be too obtuse to really invest in more acute growth opportunities, but either way, to really get a foothold into Eastern European investment opportunities, it may be necessary at least on superficial inspection,(public opportunities) to have to invest tangentially through investing in some sort of European trans-national corp or bank to really get at the investment opportunities one has a "hankering" for in this region.

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    Regardless, may one's investments reap rewards, and carry us all to sleep on a gossamer plume of stability.

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    Cucuteni Culture map;(sea is Black Sea);

    (click to enlarge)

    source;http://en.wikipedia.org/wiki/File:Cucuteni-Tripol%27ye_Culture_Outline_Map.png

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    Alani territory;

    (click to enlarge)

    Source;http://en.wikipedia.org/wiki/File:Alania_10_12.png

    Stocks: GUR, RAIFY
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  • David Stafford
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    Author’s reply » Here's a modern perspective on this region with national boundaries etc; http://bit.ly/17RgYar ,
    http://bit.ly/17RgW2x
    2 Jul 2013, 11:41 AM Reply Like
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