erniem

Gazprom, Lukoil: Investor Patience Required While Russia Debates Taxes

While I am huge fan of Kurt Wulff, use his website for investment advice, and totally love his McDep ratios as a quick analysis of company worth, I am not at all interested in the Russian stocks.

Russia has no history of long term stability in the capital markets, has already de nationalized and re nationalized the oil industry, first selling state assets at pennies on the dollar under Yeltsin, and then stealing them back under Putin to crush oil oligarchs and put the companies in the hands of Putin cronies.

What this means for me, in the long term ( and today it looks like BP and Shell are getting their huge investments stolen away) is there is NO continuity of management, capital asset stability, or long term policy in Gazprom or Lukoil. And that means their share value, ownership, and income stream will have no prayer of a long term accountability. Putin and his successor (if he does not amend the law to stay in office for life) will continue to play fast and loose with the HUGE oil income that has brought Russia to a place of world power.

Europe depends on Russian gas for economic stability, and will probably roll over for any Russian bully market hi jinks, to the detriment of any outside investors. Russia has some interest in being a "good citizen" in the world markets, but also has huge economic power and can pretty much dictate terms to shareholders and foreign investors.

I would not touch either company with a ten foot pole.