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Jakobsen: Risk, reward and Russian roulette

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May 20, 2014 angus walker, forex, fx, fx award, fx crosses, fx forex, fx interbank markets, fx investing, fx market, fx markets, fx options, fx spot, fx strategy, fx trade, fx trade idea, fx trading, fx volatility, fxmarkets, macro, macro economics, macro economy, macro event, macro events, macro policy, macro strategy, macro-economics, macroeconomics, moscow, putin, reserva federal, risk, risk appetite, risk assets, risk off, risk on, risk reward, risk taking, riskappetite, riskier, risks, risks in trading, rusia, russ, russell 2000, russia, russia bonds, russia crisis, russia crude, russia economy, russia fundamentals, russia investment, russia militray forex market, russia oil, russia rates, russia ruble, russia stocks, russian, russian central bank, russian currency, russian economy, russian equities, russian government, russian outflows, russian politics, russian ruble, russian shares, russrus, russruss, saxo tv, steen jakobsen, tradingfloor.com, ukraine, ukraine commodities, ukraine crisis, ukraine dollar yen, ukraine oil supply, usd

Fancy a game of Russian roulette? Against a background of risk and revolution in Ukraine, the Russian stock market is very cheap, using one measure; the CAPE or Cyclically Adjusted Price to Earnings Ratio, the US is at 24/25 while Russia is at 6/7. So we have Saxo bank’s Chief Economist Steen Jakobsen in agreement with Saxo Bank’s Head of Equity Strategy Peter Garnry. Both agree that the Russian situation offers opportunities.

Put simply, both Peter and Steen agree that if something is very cheap then it will rally soon enough. Steen talks of a “major rally” in Russian stocks despite more nervousness to come and he suggests shorting the DAX and the US against the Russian market.