Jim Rogers told me to come here.
We were having dinner a few weeks ago in Singapore, and Jim had just returned that morning from Russia full of optimism for the improving economy.
Anyhow - Equity - Deals
I had been meaning to come back here anyhow to scout out private equity deals.
But after hearing Jim’s take on Russia having just met with a lot of the country’s business elite, it really lit a fire.
Times - Letter - Tourist - Paris - Countless
As I’ve written so many times in this letter, I’m really a pathetic tourist. I’ve been to Paris countless times and have never bothered to visit the Eiffel Tower.
When I travel, it’s to either build and maintain relationships, or to put boots on the ground and seek out risks and opportunities first hand.
Return - Russia - Country
On my return to Russia, the country has not disappointed.
You’ve probably heard about how the Russian economy has been depressed over the last few years.
Sanctions - Russia - Crimea - Wishes - Ukraine
Much of this was due to international sanctions imposed after Russia annexed Crimea in 2014 against the wishes of Ukraine, Europe, and pretty much the whole world.
Russia’s credit rating was downgraded, and foreign businesses and investors started pulling their money out en masse.
Capital - Flight - Russia - % - Country
The capital flight was extreme. Between 2014 and 2015, $210 billion fled Russia, more than 10% of the country’s GDP. That’s an enormous figure.
Then the price of oil collapsed– from $115 in June 2014 to less than $30 just over a year later. Natural gas and other major commodities also fell.
Bear - Mind - Oil - Gas - Exports
Bear in mind that oil and gas exports are a major component of the Russian economy, so the effects were devastating to both GDP and financial markets.
Russia’s economy didn’t just contract. It shriveled. And the stock market crashed.
Top - Everything - Russian - Ruble - Freefall
On top of everything else, the Russian ruble went into freefall, losing 35% of its value in a matter of months.
This made imports a LOT more expensive, dramatically...
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