A Survey of Capital Controls and Black Market FX: A Refresher for Developed Market Investors

For this first February post, I am stepping back to cover a broader topic important for international investors to understand. We will talk about FX regimes, capital controls, and black market FX—parallel market foreign exchange in PC lingo. Few investors from the US or Europe born after 1980 have never had to deal with the uncertainty surrounding foreign exchange rules, buying, or selling international securities. The dollar has been floating since 1971, and although many European countries have switched from Francs, Lira and D-Marks to Euros, the rules have been pretty straightforward. We’ll let our currency float and occasionally talk it down (rarely up) if it appreciates (depreciates) too much.

Beyond Gazprom Stock and The RSX ETF:
The Investment Case for Russia Right Now, Part 1

One cannot write long about international and Emerging Markets investing without covering Russia. Russia is a member of the BRICS ensemble and, back in the ‘90s, was the first home-run emerging markets trade of the modern era. Many EM veterans cut their teeth in the ‘98 Russia default and its privatizations earlier in that decade on the equity side. Perhaps ironically, the Russian market’s lack of excitement today makes many of its companies a compelling opportunity now.

Technical Analysis: An Important Tool for Value Investors

Between 2012 and 2014 I had been researching small oil and gas companies throughout Africa, Latin America and the Middle East and had assembled a basket of stocks and bonds issued by low-cost producers in those regions. Oil had started coming off the highs in the earlier part of 2014, but my analysis had shown that even under much lower oil prices, these companies were able to generate sufficient cash flow to pay an attractive return to the bonds or stocks owned. Despite taking unrealized losses on the positions through the year, I had the conviction that they would turn around based on my analysis of the fundamentals.