Just put $100K into TUR. Analysis inside

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princetontiger
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Just put $100K into TUR. Analysis inside

Post by princetontiger » Wed Aug 29, 2018 11:15 am

Hey Bogleheads,

Right now, Turkish shares are trading at an average of 4.5 P/E. This is dollar adjusted, LTM. There are many reasons for it, but many of the holdings are quality multinationals that do business outside of Turkey.

What's my thesis? I looked at data back from 1968, and there are only two periods where Turkish shares were around the same value - 1981 and 2001. Not even 2009 brought them to these asinine valuations. In each case, equities more than tripled 4 years later.

Let me revisit this post in 4 years.

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whodidntante
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Re: Just put $100K into TUR. Analysis inside

Post by whodidntante » Wed Aug 29, 2018 11:25 am

I like your gamble or your trolling, whichever applies.

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Re: Just put $100K into TUR. Analysis inside

Post by Caduceus » Wed Aug 29, 2018 11:29 am

princetontiger wrote:
Wed Aug 29, 2018 11:15 am
Hey Bogleheads,

Right now, Turkish shares are trading at an average of 4.5 P/E. This is dollar adjusted, LTM. There are many reasons for it, but many of the holdings are quality multinationals that do business outside of Turkey.

What's my thesis? I looked at data back from 1968, and there are only two periods where Turkish shares were around the same value - 1981 and 2001. Not even 2009 brought them to these asinine valuations. In each case, equities more than tripled 4 years later.

Let me revisit this post in 4 years.
Doesn't seem like much of a thesis to me. What's your take on what should happen if hyper-inflationary conditions persist with regard to the net asset value of Turkish companies? Are you aware that the 10-yr Turkish govt bond yield is now approximating 21% ?

You could make a killing (in lira terms) if you bet correctly that the government would not default on its obligations. But it might not mean much in US$ terms.

Have you read the financial statements of any of the portfolio holdings of this fund? It's overwhelmingly focused on industrials and financials. Question: What happens to net debt obligations of your portfolio holdings when the lira weakens against a basket of external currencies? Another question: How much of your P/E ratio, which is wrong, by the way, is made meaningless by the foreign currency translation losses that will flow through OCI?

It's your money, so I wish you well. But this is not a thesis, not by a long shot.

Nate79
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Re: Just put $100K into TUR. Analysis inside

Post by Nate79 » Wed Aug 29, 2018 11:30 am

Talk about some in depth research.

WhiteMaxima
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Re: Just put $100K into TUR. Analysis inside

Post by WhiteMaxima » Wed Aug 29, 2018 11:33 am

I am going to Konstantinople next week. I will tell you what I will see. The gate way between Aisa and Europe, Can't ingore it.

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David Jay
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Re: Just put $100K into TUR. Analysis inside

Post by David Jay » Wed Aug 29, 2018 11:39 am

princetontiger wrote:
Wed Aug 29, 2018 11:15 am
What's my thesis? I looked at data back from 1968, and there are only two periods where Turkish shares were around the same value - 1981 and 2001. Not even 2009 brought them to these asinine valuations. In each case, equities more than tripled 4 years later.
There is a slight difference in the geopolitical climate today...
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

WhiteMaxima
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Re: Just put $100K into TUR. Analysis inside

Post by WhiteMaxima » Wed Aug 29, 2018 11:46 am

Geopolitical risk. But a good speculation.
Last edited by WhiteMaxima on Wed Aug 29, 2018 11:54 am, edited 1 time in total.

megabad
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Re: Just put $100K into TUR. Analysis inside

Post by megabad » Wed Aug 29, 2018 11:54 am

My [actionable] response to this is to go the casino instead. Casinos are more fun than the stock market and you get free drinks.

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princetontiger
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Re: Just put $100K into TUR. Analysis inside

Post by princetontiger » Wed Aug 29, 2018 12:16 pm

Not trolling at all.

I’ve gone through Turkcell, Garanti, Ford Otosan, and several others.

The fact that you guys are so negative just confirms the value I am getting. $1 for $4.5 in earnings. Average p/e is 10 for Turkey.

Many people here wanted to get out of Europe in 2012. Markers doubled since then in the eurozone.

Turkey has some of the most advanced capital markets in EM.

Be greedy when others are fearful.
Last edited by princetontiger on Wed Aug 29, 2018 12:18 pm, edited 1 time in total.

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randomizer
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Re: Just put $100K into TUR. Analysis inside

Post by randomizer » Wed Aug 29, 2018 12:18 pm

Instead of waiting 4 years, please post progress updates.
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Re: Just put $100K into TUR. Analysis inside

Post by Jack FFR1846 » Wed Aug 29, 2018 12:19 pm

As Turkey converts to a dictatorship and eventually nationalizes the major industries, feel free to give us updates.
Bogle: Smart Beta is stupid

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princetontiger
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Re: Just put $100K into TUR. Analysis inside

Post by princetontiger » Wed Aug 29, 2018 12:29 pm

The West has a deep history of nationalizes as well.

US in 2009: AIG, Fannie Freddie, several banks...
France: 1970s...

Low probability, but in all panic situations time to buy. Only time that an investor would be wrong is 1919 Russia.

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Re: Just put $100K into TUR. Analysis inside

Post by NoVa Lurker » Wed Aug 29, 2018 12:37 pm

whodidntante wrote:
Wed Aug 29, 2018 11:25 am
I like your gamble or your trolling, whichever applies.
Based on the subsequent posts, we now know the answer.

Of course, OP's strategy could work out. But OP has not done the work to demonstrate that the risks are improperly priced; rather, OP is taking risk to buy in a distressed scenario.

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randomizer
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Re: Just put $100K into TUR. Analysis inside

Post by randomizer » Wed Aug 29, 2018 12:42 pm

OP, did you end up taking advantage of the Greece opportunity a few years back as well?
87.5:12.5, EM tilt — HODL the course!

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princetontiger
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Re: Just put $100K into TUR. Analysis inside

Post by princetontiger » Wed Aug 29, 2018 12:44 pm

randomizer wrote:
Wed Aug 29, 2018 12:42 pm
OP, did you end up taking advantage of the Greece opportunity a few years back as well?
I didn't buy GREK. The euro is a straight jacket. Italy and Greece both need to devalue. As long as these countries are in the eurozone, they'll continue to be laggards.

GREK looks cheap today, but I don't see any growth unfortunately.

Turkey can devalue (and did).

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Re: Just put $100K into TUR. Analysis inside

Post by GoldStar » Wed Aug 29, 2018 12:46 pm

princetontiger wrote:
Wed Aug 29, 2018 12:29 pm
The West has a deep history of nationalizes as well.

US in 2009: AIG, Fannie Freddie, several banks...
France: 1970s...

Low probability, but in all panic situations time to buy. Only time that an investor would be wrong is 1919 Russia.
Huh? Did Nazi Germany never happen?

WhiteMaxima
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Re: Just put $100K into TUR. Analysis inside

Post by WhiteMaxima » Wed Aug 29, 2018 12:47 pm

Why not DCA? Divide 100k USD into 10 lots and invest every month.

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princetontiger
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Re: Just put $100K into TUR. Analysis inside

Post by princetontiger » Wed Aug 29, 2018 12:50 pm

Every country has nationalized industries and certain times.

https://en.wikipedia.org/wiki/List_of_n ... by_country

Phil Fisher analyzed hyperinflation; in all cases buying the index preserves 80% of your wealth. Germany had a stock market in the 1940s; it was just fine after the war.

The Syrian pound has appreciated 50% in the past few years, by the way.

Caduceus
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Re: Just put $100K into TUR. Analysis inside

Post by Caduceus » Wed Aug 29, 2018 12:54 pm

princetontiger wrote:
Wed Aug 29, 2018 12:50 pm
Every country has nationalized industries and certain times.

https://en.wikipedia.org/wiki/List_of_n ... by_country

Phil Fisher analyzed hyperinflation; in all cases buying the index preserves 80% of your wealth. Germany had a stock market in the 1940s; it was just fine after the war.

The Syrian pound has appreciated 50% in the past few years, by the way.
Well, I'm sure I speak for everyone when I say that the sheer quality of your insights are self-evident. Good luck.

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princetontiger
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Re: Just put $100K into TUR. Analysis inside

Post by princetontiger » Wed Aug 29, 2018 12:56 pm

Thank you.

I'm sure others on this forum own TUR. The ETF has doubled its assets this month. Smart people on both sides of the trade.

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Re: Just put $100K into TUR. Analysis inside

Post by Maverick3320 » Wed Aug 29, 2018 1:00 pm

I love reading these threads.

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Re: Just put $100K into TUR. Analysis inside

Post by Whakamole » Wed Aug 29, 2018 1:03 pm

WhiteMaxima wrote:
Wed Aug 29, 2018 11:33 am
I am going to Konstantinople next week.
If you've got a date in Konstantinople, she'll be waiting in Istanbul.

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Re: Just put $100K into TUR. Analysis inside

Post by WhiteMaxima » Wed Aug 29, 2018 1:27 pm

the problem with TUR is currency risk. TL lost 40% of it's value against USD. Assume fund value is unchanged in it's local currency, your TUR will lose same amount in USD. Though its a good speculation, I will be cautious about currency move.

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princetontiger
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Re: Just put $100K into TUR. Analysis inside

Post by princetontiger » Wed Aug 29, 2018 1:31 pm

The currency has an impact on the ETF, but generally the BIST 100 (Turkey's main index) revalues up. Why? Because, as I said, most of the companies are multinationals and there is some purchasing power parity going on.

You can't go to Turkey and buy a house for $1. On the international stage, a waterfront home may be discounted but it will hold its value relatively similar to other waterfront properties. The same goes for the main stock index; there are real companies.

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Re: Just put $100K into TUR. Analysis inside

Post by MittensMoney » Wed Aug 29, 2018 1:41 pm

Fun bet! I'm in! Although I'm not going to throw $100k at it like a lunatic :happy . Bought 4x 1/18/19 $20 calls and come 2019 may buy more ITM calls further out.

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Re: Just put $100K into TUR. Analysis inside

Post by WhiteMaxima » Wed Aug 29, 2018 1:45 pm

30% of TUR holding is in Financials. Turk problem is it has too much debt. Can these Turk survive through these without IMF, foreign bank inject of money? Although I liked potential of Turkish overall.

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corn18
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Re: Just put $100K into TUR. Analysis inside

Post by corn18 » Wed Aug 29, 2018 1:50 pm

OP, you ever wrong? If not, you shouldn't be wasting your time on an indexing forum. Buy a yacht and enjoy your riches. :sharebeer

BTW, why only $100k?

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princetontiger
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Re: Just put $100K into TUR. Analysis inside

Post by princetontiger » Wed Aug 29, 2018 1:51 pm

TUR used to hold ~40% financials... today, it is closer to 20% because of the banking shares getting hit hard.

I am less concerned. In a true distressed scenario, the financials have to issue equity and you lose 10% of your money; however, the currency would devalue again and many companies would rush to move manufacturing to Turkey. Again, the currency has a positive influence overall.

The USA effectively went bankrupt under Nixon when we moved ourselves off the gold standard; markets went up 10x a decade later. (Yes, I'm missing stuff like the Plaza Accord, but that's '85).

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princetontiger
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Re: Just put $100K into TUR. Analysis inside

Post by princetontiger » Wed Aug 29, 2018 1:53 pm

corn18 wrote:
Wed Aug 29, 2018 1:50 pm
OP, you ever wrong? If not, you shouldn't be wasting your time on an indexing forum. Buy a yacht and enjoy your riches. :sharebeer

BTW, why only $100k?
Rarely. Last big call was QAT last year; I defied the embargo and was proven right. Saudi Arabia was jamming fake riyal quotes in November. You can check the Reuters articles about this. QAT hit a low of $13. Market yields 5%. 2/3 of the entire country derives its revenue from outside.. southeast asia/migrant working countries.

https://www.reuters.com/article/gulf-qa ... SL8N1O30AS

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Re: Just put $100K into TUR. Analysis inside

Post by Maverick3320 » Wed Aug 29, 2018 2:01 pm

princetontiger wrote:
Wed Aug 29, 2018 1:53 pm
corn18 wrote:
Wed Aug 29, 2018 1:50 pm
OP, you ever wrong? If not, you shouldn't be wasting your time on an indexing forum. Buy a yacht and enjoy your riches. :sharebeer

BTW, why only $100k?
Rarely. Last big call was QAT last year; I defied the embargo and was proven right. Saudi Arabia was jamming fake riyal quotes in November. You can check the Reuters articles about this. QAT hit a low of $13. Market yields 5%. 2/3 of the entire country derives its revenue from outside.. southeast asia/migrant working countries.

https://www.reuters.com/article/gulf-qa ... SL8N1O30AS
Anyone who is rarely wrong in the financial world should have much better things to do than talk about individual stocks or sectors on a retirement/passive investing forum.

Whakamole
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Re: Just put $100K into TUR. Analysis inside

Post by Whakamole » Wed Aug 29, 2018 2:10 pm

princetontiger wrote:
Wed Aug 29, 2018 1:53 pm
corn18 wrote:
Wed Aug 29, 2018 1:50 pm
OP, you ever wrong? If not, you shouldn't be wasting your time on an indexing forum. Buy a yacht and enjoy your riches. :sharebeer

BTW, why only $100k?
Rarely. Last big call was QAT last year; I defied the embargo and was proven right. Saudi Arabia was jamming fake riyal quotes in November. You can check the Reuters articles about this. QAT hit a low of $13. Market yields 5%. 2/3 of the entire country derives its revenue from outside.. southeast asia/migrant working countries.

https://www.reuters.com/article/gulf-qa ... SL8N1O30AS
Are you sure you made that QAT call? Because you made this post in April of this year:
Just wanted to let people know that about 5 years ago, I had an idea: floating nearly every penny of my net worth in an ETF. I decided on VT. It's been a stressfree ride since.

While VT would most likely underperform small and midcap ETFs, and perhaps the S&P 500 (US markets still have highest ROE of all countries), I wanted something that would preserve purchasing power. VT has been a stud.

Does anyone else put money into a 100% stock basket?
Which is it, did you invest all in VT 5 years ago (at least up through April), or did you switch out last year to invest in QAT and did not mention this in your April post for some reason?

NoHeat
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Re: Just put $100K into TUR. Analysis inside

Post by NoHeat » Wed Aug 29, 2018 2:22 pm

princetontiger wrote:
Wed Aug 29, 2018 12:16 pm
Be greedy when others are fearful.
I like the Buffett quote.

Historically, the Turkish stock market tends to have extra-high volatility, combined with a reversion to mean when valued in USD. And that combination does suggest that a cyclical play could work well in Turkey. That's based on my years of observing extrema market movements, in the tables in the back of the Economist magazine -- I've never traded it, but I've considered it many times.

Two possible issues:
- The "fearful" factor might not be that extreme, at this point, by Turkish standards. I'd consider waiting for blood to run in the streets, figuratively speaking.
- TUR is an ETF that is heavily weighted with banks, and banks of course have the problem, during panics, of having high leverage, so that they're not the safest place to be if things get a lot worse.

One possible alternative, the beer brewer Anadolu Efes, which trades as an ADR AEBZY. I've looked at the financial statements, and for a distressed market this company looks look steady enough, with a strong balance sheet and an overall profitability that's about nil. If the Turkish market got really bloody, I'd consider a consumer staple play like this, as a less-risky alternative to the bank-heavy TUR.

If I did try to play the Turkish market's volatility, I would likely expect to get out in one year, rather than five years as you suggested in your OP, because you could get another cycle while you wait.

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princetontiger
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Re: Just put $100K into TUR. Analysis inside

Post by princetontiger » Wed Aug 29, 2018 2:46 pm

Thank you NoHeat, I am glad you understand.

I really like Anadolu as well. Efes is popular brand, and you see it all around Asia Minor.

WhiteMaxima
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Re: Just put $100K into TUR. Analysis inside

Post by WhiteMaxima » Wed Aug 29, 2018 2:51 pm

Bought 100 shares for 2k in my daughther's Roth account. Let's see in 4 years.
Last edited by WhiteMaxima on Wed Aug 29, 2018 3:00 pm, edited 1 time in total.

wije
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Re: Just put $100K into TUR. Analysis inside

Post by wije » Wed Aug 29, 2018 2:57 pm

princetontiger wrote:
Wed Aug 29, 2018 12:16 pm
The fact that you guys are so negative just confirms the value I am getting.
How would you have reacted if everyone had supported this play?

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princetontiger
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Re: Just put $100K into TUR. Analysis inside

Post by princetontiger » Wed Aug 29, 2018 3:07 pm

wije wrote:
Wed Aug 29, 2018 2:57 pm
princetontiger wrote:
Wed Aug 29, 2018 12:16 pm
The fact that you guys are so negative just confirms the value I am getting.
How would you have reacted if everyone had supported this play?
I believe markets are comprised of two components: fundamentals and sentiment. When fundamentals and sentiment both look awful, it's almost always time to buy.

If everyone was positive on Turkish risk assets, then I'd be hesitant of my idea. Mean reversion works here, as well. Going back to the 1980s, every time Qatar fell for three years in a row, it then bounced hard. Whether it's technical or fundamental, who knows.

integrity
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Re: Just put $100K into TUR. Analysis inside

Post by integrity » Wed Aug 29, 2018 3:23 pm

Interesting ideas. Fun to think about, but I'd never have the guts to trigger a trade like this.
How much can you win, if you win? In the last decade, TUR has traded as high as $77. Right now its trading around $21. If it gets back to $77 then you've made a 3.67 multiple. Is that enough for this type and magnitude of risk? In Venture Investing (my world) we look for >10x.
Right now TUR is dropping like crazy. It's like catching a falling knife. All things equal I'd wait a bit longer to buy in.

I love Monday morning quarterbacking!! :sharebeer

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princetontiger
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Re: Just put $100K into TUR. Analysis inside

Post by princetontiger » Wed Aug 29, 2018 3:28 pm

I do not think TUR can go back to $77 any time soon given the currency devaluation. A more realistic assumption from today's "fresh start" is $40-50.

A good proxy is EGPT, the Egypt ETF from Global X. Egypt devalued (as well as shut down their stock market for a few months). EGPT is up 50% since doom and gloom in the past year. At most, it was up nearly 75%. If TUR follows the same route, then we're looking at ~$35 in the next 12-18 months.

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Re: Just put $100K into TUR. Analysis inside

Post by HEDGEFUNDIE » Wed Aug 29, 2018 3:34 pm

I hope you bought this in a taxable account for the inevitable tax loss harvest.

WhiteMaxima
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Re: Just put $100K into TUR. Analysis inside

Post by WhiteMaxima » Wed Aug 29, 2018 3:46 pm

princetontiger wrote:
Wed Aug 29, 2018 3:28 pm
I do not think TUR can go back to $77 any time soon given the currency devaluation. A more realistic assumption from today's "fresh start" is $40-50.

A good proxy is EGPT, the Egypt ETF from Global X. Egypt devalued (as well as shut down their stock market for a few months). EGPT is up 50% since doom and gloom in the past year. At most, it was up nearly 75%. If TUR follows the same route, then we're looking at ~$35 in the next 12-18 months.
I cross my fingers. I bought $2000 in my daughter's Roth IRA using her piggy bank money.

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Re: Just put $100K into TUR. Analysis inside

Post by wassabi » Wed Aug 29, 2018 3:47 pm

OP, there's nothing wrong with your position provided it fits your IPS and works for you. In fact, I'm thinking of picking up a few shares with a small portion of my portfolio that I reserve for riskier positions. Sorry you're being ridiculed by so many in this thread - that's to be expected on this forum where purchasing broad market index funds is the method of choice (for me as well).

My question for you is about financial reporting. Are you in the U.S. and if so does owning this ETF require any special tax or financial reporting that any other U.S. based ETF wouldn't (e.g., U.S. total stock market ETF)?

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corn18
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Re: Just put $100K into TUR. Analysis inside

Post by corn18 » Wed Aug 29, 2018 3:52 pm

princetontiger wrote:
Wed Aug 29, 2018 3:28 pm
I do not think TUR can go back to $77 any time soon given the currency devaluation. A more realistic assumption from today's "fresh start" is $40-50.

A good proxy is EGPT, the Egypt ETF from Global X. Egypt devalued (as well as shut down their stock market for a few months). EGPT is up 50% since doom and gloom in the past year. At most, it was up nearly 75%. If TUR follows the same route, then we're looking at ~$35 in the next 12-18 months.
Yup, EGPT is doing great:

Image

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princetontiger
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Re: Just put $100K into TUR. Analysis inside

Post by princetontiger » Wed Aug 29, 2018 3:54 pm

I recommend checking the iShares website.

Bogleheads isn't out picking stocks. I'm not suggesting owning individual Turkish stocks. I am making a bet on the broad Turkish equity market (BIST 100), and I am doing this through TUR.

American and British investors only have access to roughly 25 ADRs/GDRs... I personally can't buy in the Turkish market, but I wouldn't.

Turkcell, ticker is TKC, trades on the NYSE. I would avoid buying it and buy TUR instead. However, Turkcell has a very, very tower asset in eastern europe that tried to IPO and failed a year ago. Eventually (maybe 2023), calm will return and IPOs will happen.

Markets aside, let's talk politics. Turkey is 1/3 ethnically Hellenistic. It's very similar to Greece. It's not barbarians running around with kilijs. It's actually a fairly modern country with certain problems. I think Erdogan will eventually back down, as he always does.

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princetontiger
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Re: Just put $100K into TUR. Analysis inside

Post by princetontiger » Wed Aug 29, 2018 4:00 pm

corn18 wrote:
Wed Aug 29, 2018 3:52 pm
princetontiger wrote:
Wed Aug 29, 2018 3:28 pm
I do not think TUR can go back to $77 any time soon given the currency devaluation. A more realistic assumption from today's "fresh start" is $40-50.

A good proxy is EGPT, the Egypt ETF from Global X. Egypt devalued (as well as shut down their stock market for a few months). EGPT is up 50% since doom and gloom in the past year. At most, it was up nearly 75%. If TUR follows the same route, then we're looking at ~$35 in the next 12-18 months.
Yup, EGPT is doing great:

Image
Egypt has less robust capital markets and, frankly, Cairo is much more dangerous than Istanbul. Istanbul has two Four Seasons hotels, by the way. Cairo has none.

Egypt's 50% bounce from its mid-2017 devaluation can be seen

I suspect TUR will meander. Great bottoms last several months and aren't V-bounces.

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Re: Just put $100K into TUR. Analysis inside

Post by Imbros » Wed Aug 29, 2018 4:31 pm

princetontiger wrote:
Wed Aug 29, 2018 3:07 pm
wije wrote:
Wed Aug 29, 2018 2:57 pm
princetontiger wrote:
Wed Aug 29, 2018 12:16 pm
The fact that you guys are so negative just confirms the value I am getting.
How would you have reacted if everyone had supported this play?
I believe markets are comprised of two components: fundamentals and sentiment. When fundamentals and sentiment both look awful, it's almost always time to buy.

If everyone was positive on Turkish risk assets, then I'd be hesitant of my idea. Mean reversion works here, as well. Going back to the 1980s, every time Qatar fell for three years in a row, it then bounced hard. Whether it's technical or fundamental, who knows.
What is going on in Turkey nowadays is not a typical emerging market crisis. This is a collapse and the economy will stay weak for a very long time until the inevitable happens. The numbers might look great but they never tell you the whole story. Good luck.
There is no greatness where there is no simplicity, goodness and truth. -L. Tolstoy

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princetontiger
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Re: Just put $100K into TUR. Analysis inside

Post by princetontiger » Wed Aug 29, 2018 4:40 pm

I heard the same rhetoric in 2009 when "socialist" Obama became President. Go back and read the news from that time period. People were very, very afraid during that time. Plenty of people thought ZERO was the bottom.

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Re: Just put $100K into TUR. Analysis inside

Post by Leesbro63 » Wed Aug 29, 2018 4:43 pm

WhiteMaxima wrote:
Wed Aug 29, 2018 11:33 am
I am going to Konstantinople next week. I will tell you what I will see. The gate way between Aisa and Europe, Can't ingore it.
Istanbul, not Constantinople 😀

I wonder if there are recent examples of similar situations. Maybe Greece?

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princetontiger
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Re: Just put $100K into TUR. Analysis inside

Post by princetontiger » Wed Aug 29, 2018 4:53 pm

I think a parallel is ILF, in early 2016.

Most of LatAm devalued their currencies by 50%, and people fled. Brazil, a country still mired deep depression, has seen its equity market bounce quite hard.

Turkey could recover quickly, who knows.
Last edited by princetontiger on Wed Aug 29, 2018 4:54 pm, edited 1 time in total.

WhiteMaxima
Posts: 1462
Joined: Thu May 19, 2016 5:04 pm

Re: Just put $100K into TUR. Analysis inside

Post by WhiteMaxima » Wed Aug 29, 2018 4:54 pm

Imbros wrote:
Wed Aug 29, 2018 4:31 pm
princetontiger wrote:
Wed Aug 29, 2018 3:07 pm
wije wrote:
Wed Aug 29, 2018 2:57 pm
princetontiger wrote:
Wed Aug 29, 2018 12:16 pm
The fact that you guys are so negative just confirms the value I am getting.
How would you have reacted if everyone had supported this play?
I believe markets are comprised of two components: fundamentals and sentiment. When fundamentals and sentiment both look awful, it's almost always time to buy.

If everyone was positive on Turkish risk assets, then I'd be hesitant of my idea. Mean reversion works here, as well. Going back to the 1980s, every time Qatar fell for three years in a row, it then bounced hard. Whether it's technical or fundamental, who knows.
What is going on in Turkey nowadays is not a typical emerging market crisis. This is a collapse and the economy will stay weak for a very long time until the inevitable happens. The numbers might look great but they never tell you the whole story. Good luck.
Turkey's problem is both geopolitical and economical. Caught between US and Russia. The country has internal and external problem (Kurtish sepearists, Syria conflict, ISIS, refuge). Economy largely depend on borrowing. Once these settled, everything will move forward again. I have strong confidence for it's future. It's situated at the gateway between Asia and Europe. Link between Black Sea to Meditrranean Sea (gas oil line to EU). A G20 and NATO member.

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princetontiger
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Re: Just put $100K into TUR. Analysis inside

Post by princetontiger » Wed Aug 29, 2018 4:55 pm

Keep in mind many Turkish companies are used to hedging currencies. They have dealt with hyperinflation before. This is something most European and American companies have never experienced.

I think the bottom is occurring in Turkish assets right now (in dollar terms).

Let's go back to the economy. Unlike most "third world" nations, Turkey has a very advanced capital market. Many companies are multinationals. Nigeria and Egypt have less than 50 public companies; Turkey has several hundred.

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