Financial advisor: ‘I’d rather own Russia than Apple’

“Russia’s MICEX Index looks cheap after falling dramatically this year and could be a good investment compared to holding shares of the technology giant Apple, Paul Gambles, managing partner at the financial advisory group MBMG Group, told CNBC.,” Matt Clinch reports for CNBC.

“‘You’ve got to look at valuations,’ he told CNBC Monday. ‘To me, at those sorts of prices, it’s starting to look like there’s a – speculative admittedly – high risk opportunity,'” Clinch reports. “‘There’s a play on Russia just because of the pricing. I’d rather own Russia than own Apple, frankly.'”

“The market capitalization of the MICEX currently stands at 20.40 trillion rubles or $350.14 billion, which compares to Apple’s figure of $655.57 billion,” Clinch reports. “The price-to-earnings ratio – an important metric used to gauge stock valuations by some analysts – is 17.38 for Apple, according to data from Reuters, and an average of 5.97 for the MICEX. A lower number is seen as a better investment by many equity analysts.”

Read more in the full article here.

MacDailyNews Take: You know what they say about opinions.

36 Comments

    1. It already went wrong. And now the stock is super cheap, so this guy is right. The currency has already recovered from the bottom, it is thirty eight percent up.

      However, Apple also has growth perspective, so why not own both?

      1. saudi arabia announced today (yesterday?) that they weren’t going to reduce oil production. so with all due respect for your position, i suggest there is a possibility that you have your verb tense wrong! thx for the comment.

        1. Of course, there is always a possibility that thing could be worse.

          However, this particular event such as Saudi Arabia stating that they are not going to cut oil production is not essential since they already stated that earlier and it is already taken into account the current oil price.

    1. The GULAGs of today, unfortunately, is in USA, where millions of incarnated people are made to work at $.30 per hour because private jails coarse them to do so by imposing insane fees for even such basic things as phone calls. Russia still has jails where people work, but its scale is quite small comparing to what USA does.

      As per territorial ambitions, there is no such thing. Russia could have easily take over Ukraine with their illegal “government” and half of the country not supporting it. But it decided not to do so.

      1. Right…Putin only took over the Crimea region and invaded the western areas of the Ukraine. That’s practically nothing! /s

        No such thing? Are you nuts?

        I agree that there are too many people incarcerated in the U.S. And I also dislike the private prison systems, but you should be very cautious when using a term like “gulag” lest you sound like an idiot. Do a bit of historical research and you will note stark differences between U.S. prisons and gulags.

        1. 1) Crimeans never thought of themselves as Ukrainians, so it is not like “Putin took over the Crimea” — people wanted that. The territory was transferred to Ukraine illegally even under USSR laws. This is the reason why Ukraine still has to demarcated legal borders, registered with in UN.

          2) Putin never invaded even Eastern parts of Ukraine, let alone Western. Every time illegal puppet “government” has cried “invasion”, NYT journalists travelled through those territories and found no Russian army; only rebels. However, of course, Putin does support rebels, and he is right in doing so. They protect their rights from illegal authorities that attack their land with tanks and balletic missiles, killing thousands of civilians.

          3) “you should be very cautious when using a term like “gulag” lest you sound like an idiot” — you should read original comment to which I replied to find out who was using “GULAG” term first lest you sound like an idiot. (Of course, neither in USA, nor in Russia, system like GULAG exists; those are different systems.)

  1. So basically, he rather buy a country that has problems and debt everywhere, that once you buy it you have to return the profits to its shareholders entirely in the form of public services.. You prefer that and not to buy a company that can buy all that and also give you money.. And also a company that makes money more faster than the rate russia is losing money.
    Interesting.. In what mental hospital are you “guess”?

    1. The country had third biggest monetary reserves in the world and stock market that is super cheap due to market speculations and politics. So buying Russian stock is super smart. However, as I wrote above, Apple’s stock is also cheap, so it is not “either or” situation.

  2. Saying it on TV just to slam Apple, and doing it for real are two different things. He looks foolish, but some people will always believe what they hear on TV.

  3. I think this is bad investment advice, but there’s some logical (if flawed) reasoning behind it. Russia is undervalued now and Apple is very highly valued now: so (theoretically) Russia has greater growth potential over Apple.

    This line of thinking, however, demonstrates the main problem with the entire “buy low, sell high” investment strategy. When a stock grows or loses value, there’s usually reasons why that happens. And whatever the reasons may be, they are likely to keep affecting the stock’s value the same way.

    Finding a stock that’s undervalued for no good reason, and scooping it before the rest of the market realizes it – that’s an fantasy. For every example of that actually working you’ll, find many more that examples of underperforming stocks that keep underperforming.

    A more effective strategy is Momentum investing – buy winning stocks while they grow, and sell losing stocks before they lose more.

    1. Blackberry has greater growth potential over Apple as well… practically nowhere to go but up. Buying Russian stocks might make sense to HIM, a professional investor willing to take risks and (presumably) supplied with good information before the rest of us. I constantly find it amusing how Apple haters – whether they are financial pundits, fandroids, or Apple competitors – are constantly using Apple as the standard of comparison. You don’t see, for instance, Microsoft running ads during football games that compare the Surface with a Chromebook. Every time an Apple hater uses Apple as the standard of comparison, they reinforce the fact that Apple is the leader and the gold standard.

  4. But his advice assumes things will just get better in Russia. That is not certain at all. given the low price of oil, the mess in the Ukraine and Europe’s reaction against it and Russia’s other hostile maneuvers, and the fact that Putin seems to insist on putting Russia in a dangerous place with his foreign policy decisions. While the stock may be up currently, next week it could crash back down easily.

    Apple, OTOH, has the Watch coming out in the next 2-6 months, which will substantially boost it’s share price, as well as it it still trying to catch up to iPhone 6/6 Plus demand and hasn’t even finished its worldwide rollout yet.

    Russia may have more risk/reward, but Apple isn’t far behind in the reward department with far, far less risk.

    1. if you have access to good information, you could make money off Russia. But you could say that about any investment. You could have made a lot of money off Blackberry and Nokia stocks if you had a fair sense for where the bottom was and when the upward bounces would happen. For ordinary schmoes like us, I guess if you really want to make money off the Russian crisis you should wait still longer because that story is not over yet. The sanctions are compounding the pain of the crash of oil prices. For a foreign investor, the currency risk is significant as well. If someone held a gun to my head and forced me to invest in Russia, I would wait three months and then only put in as much money as I would be willing to lose, and also be willing to wait a couple years for a recovery. Then I would sell and never look back. Russia’s not going to go out of business but as those of us who lived through the most recent recession know all too well, the pain can last a lot longer than your ability to endure it.

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