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Affluent Christian Investor | August 22, 2017

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Annals Of Overblown Stories: Ukraine And The Russia Meltdown

MICEX

The events surrounding the political instability of Ukraine, and Russian exploitation of that instability, is a perfect example of the kind of event-driven (rather than principle-driven) approach of so much investment commentary which pushes people towards buying assets which have already gone up (such as gold), and towards selling assets which have already gone down (like Russia’s MICEX exchange), at the height of a crisis.

As the dust clears we see that the crisis took gold prices from a level which, according to our models, was at the low end of valuation in the 1,290 range and pushed the price up to levels which, according our models, would be at the high end of valuation at almost 1,400, and then all the way back down again.

The Russian MICEX fell precipitously very early in the crisis, but from the peak of the crisis and up to this writing has performed very well, and has more than recaptured its crisis losses. Buying or holding Russia at the height of this crisis is exactly the sort of thing that event-driven investing would tend to reject and principle-driven investing would tend to embrace. It’s the kind of thing which makes clients call after the annexation of Crimea and ask whether they should buy gold, just before its peak.

None of this means that things can’t be so mishandled by our respective ruling classes that they can’t spin out of control. Feckless Western elites can bungle things so badly (they’ve made a good start of it already), and even the heralded tiger-hunting-Judo-and-chess-mater Putin could blow it already in a testosterone frenzy. But barring that, the secession of Crimea and its ascension, and annexation, to Russia has turned out not be the market disaster which we were led to believe.

 

Article originally published on Forbes.com.

Jerry Bowyer is a Forbes contributor, contributing editor of AffluentInvestor.com, and Senior Fellow in Business Economics at The Center for Cultural Leadership.

Jerry has compiled an impressive record as a leading thinker in finance and economics. He worked as an auditor and a tax consultant with Arthur Anderson, as Vice President of the Beechwood Company which is the family office associated with Federated Investors, and has consulted in various privatization efforts for Allegheny County, Pennsylvania. He founded the influential economic think tank, the Allegheny Institute, and has lectured extensively at universities, businesses and civic groups.

Jerry has been a member of three investment committees, among which is Benchmark Financial, Pittsburgh’s largest financial services firm. Jerry had been a regular commentator on Fox Business News and Fox News. He was formerly a CNBC Contributor, has guest-hosted “The Kudlow Report”, and has written for CNBC.com, National Review Online, and The Wall Street Journal, as well as many other publications. He is the author of The Bush Boom and more recently The Free Market Capitalist’s Survival Guide, published by HarperCollins. Jerry is the President of Bowyer Research.

Jerry consulted extensively with the Bush White House on matters pertaining to the recent economic crisis. He has been quoted in the New York Times, The Wall Street Journal, Forbes Magazine, The International Herald Tribune and various local newspapers. He has been a contributing editor of National Review Online, The New York Sun and Townhall Magazine. Jerry has hosted daily radio and TV programs and was one of the founding members of WQED’s On-Q Friday Roundtable. He has guest-hosted the Bill Bennett radio program as well as radio programs in Chicago, Dallas and Los Angeles.

Jerry is the former host of WorldView, a nationally syndicated Sunday-morning political talk show created on the model of Meet The Press. On WorldView, Jerry interviewed distinguished guests including the Vice President, Treasury Secretary, HUD Secretary, former Secretary of Sate Condoleezza Rice, former Presidential Advisor Carl Rove, former Attorney General Edwin Meese and publisher Steve Forbes.

Jerry has taught social ethics at Ottawa Theological Hall, public policy at Saint Vincent’s College, and guest lectured at Carnegie Mellon’s graduate Heinz School of Public Policy. In 1997 Jerry gave the commencement address at his alma mater, Robert Morris University. He was the youngest speaker in the history of the school, and the school received more requests for transcripts of Jerry’s speech than at any other time in its 120-year history.

Jerry lives in Pennsylvania with his wife, Susan, and the youngest five of their seven children.

 

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