SmartMoney magazine arrived. The "Investments" section looks slightly comical. "40 Stocks with Fair Value Estimates" is basically telling us: buy whatever you want. Everywhere you look, the upside potential is 150%. For Mosenergo, it's 315%. Against that backdrop, it's especially amusing to read the newspaper Vedomosti (a Russian business daily), SmartMoney's big sister, with an article titled "Deceptive Cheapness," warning off those tempted to buy at the bottom.
Deceptive CheapnessSince the beginning of the year, the RTS Index (a major Russian stock market index) has lost more than 40%, and the market capitalization of Russian companies is less than eight times their expected earnings. Analysts keep repeating the mantra that this is fantastically cheap and that it's time to buy, yet stocks keep getting cheaper. After the drop at the beginning of the year, the Russian stock market resumed its rise, and in May the RTS Index reached 2,500 points. More Analysis is a flexible thing.