Russia Urkraine risk not being accounted by the Market

Discussion in 'General Trading Discussion' started by JadeDoo, Apr 30, 2014.

  1. JadeDoo

    JadeDoo Well-Known Member

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    I've said right from the beginning that the Crimea crisis has significant risk of escalating and it's happening right now. Even if nothing, this confrontation has significant impact on the politically dynamic and has changed the perception of energy security in the west. At this point, no one is backing down and in fact there is no easy way for neither the west or Russia to back off without losing face. Now I doubt anyone wants this to turn into a war, but it's not looking too good. The market yet seems to been almost completely ignored this risk and just continues to go higher every days despite any significant good news.
     
  2. Gelsemium

    Gelsemium Senior Investor

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    If an escalate does happen the markets will crash because Russian gas has huge influence on whole of Europe for example. I don't know if the markets are sure there will be no escalate, but that is unpredictable.
     
  3. JadeDoo

    JadeDoo Well-Known Member

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    There has been escalation already. Russia, China, & Iran are doing military drills and the West is looking into further sanctions. Russia being proposed to be kicked out of the G8, yet market is just ignoring atm because it was to go higher so bad. Like you said it'll crash if it escalates to potential war, but market is acting like it's gonna ignore the growing risk and only react to it if it happen.

     
  4. wanderingwildman

    wanderingwildman Well-Known Member

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    I agree that Russia has way too much influence. I can't even begin to imagine what will happen once the war begins. I don't even believe it is a question of if anymore. It just seems like it is only a matter of time.
     
  5. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I'm not actually hoping for a big market correction or crash, but I've been expecting one for a while. I think this will have a significant impact. I've never had any confidence in our own admin, and it's become more and more obvious how weak our foreign policy is and how poor our leadership is in the US these days.

    If we see a big selloff, I will use the opportunity to buy more of good companies that will get even cheaper, and to perhaps buy new companies with good fundamentals that may suddenly become quite cheap. I'll also make $ on my small position in a broad market short ETF I use as a hedge.
     
  6. crimsonghost747

    crimsonghost747 Senior Investor

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    So how much have you invested in instruments which will increase value if the situation escalates?

    It does have potential to become a bigger issue than it already is, Russian politicians are always unpredictable. I wouldn't mind seeing a downward correction of 20% or so... I need more shares. :D
     
  7. JadeDoo

    JadeDoo Well-Known Member

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    Basically everything would go down unless you are shorting or potentially gold would do ok if it escalated. So I haven't bought anything recently for this reason, though I have shorted the S&P 500 to hedge my portfolio. A month before my portfolio was leveraged.
     
  8. Gelsemium

    Gelsemium Senior Investor

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    I wonder why do the markets act like that, it's like if they are used to this cold (or not so cold anymore) war scenarios and only when the "real" war begins they react, it seems everything is artificial.
     
  9. Peninha

    Peninha Senior Investor

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    It is artificial Gelsemium, the 1% rules the world as they please and we just might get lucky to pick up some crumbs or to see them being taken away from us helplessly.
     
  10. crimsonghost747

    crimsonghost747 Senior Investor

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    Ahh so you decided to short the S&P 500. I was thinking of that too, but preferred to stay away and take a more neutral stance by just keeping some cash in hand so I can buy if the prices come down. Most of my investments are in companies with very strong fundamentals and companies that are large and stable, so I don't think I would suffer THAT much from a dip.

    Also been owning RTN for ages, which I guess could be one of the companies that shoot up if the crisis escalates.
     

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