Time to buy Turkish stocks?

Discussion in 'Stocks' started by Daal, Aug 13, 2018.

  1. Daal

    Daal

    http://factcheckingturkey.com/economy/claim-turkey-s-corporate-debt-70-cent-its-gdp-459

    Corporate and goverment debt levels as a % of GDP are lowish, so it seems that they dont need to print all that much money. TUR is trading at 7-8 times earnings, over 50 stocks are in it, so its diversified. The sanctions arent good but this isnt like North Korea, all they got to do is to release a guy from prison and even if they dont, its not like Trump can rally the entire planet to sanction Turkey due a priest. Turkey is in NATO after all
    Time to buy?
     
  2. qxr1011

    qxr1011

  3. Arnie

    Arnie

    I think a good deal is due to the Lira. Isn't much of their debt in other currencies?
     
  4. Daal

    Daal

    You are probably right, so this becomes a Soros reflexivity type situation where pessimism leads to default and optimism leads to good times
     
  5. m22au

    m22au

    I don't know your specific timeframe and risk/reward metrics for this trade/investment, but it's important to remember that according to a recent Goldman report, some banks are probably insolvent at current levels. (USD/TRY at about 6.99 at the time of writing). The others might be insolvent if the TRY declines by another 15%.

    So while big questions remain about the banks (ie, potential for 90% downside or more), it's hard for me to exited about buying a basket of Turkish stocks.

    https://www.ishares.com/us/products/239689/ishares-msci-turkey-etf

    Especially if that basket includes quite a few bank stocks.

    .
     
  6. Daal

    Daal

    Do you have the details of that note? IME during times of panic, its very easy to overestimate these sorts of risks. I certaintly did back in 2009 in the US crisis and many have done in the EU crisis in 2011-2012 as well as in the Brazil turmoil in 2015. Its human nature
     
  7. m22au

    m22au

    Yes you're right it's just an estimation of the risks.

    Original post about Goldman note here:
    https://www.elitetrader.com/et/threads/turkish-lira-try.320094/page-7#post-4704634

    which contains a link to a ZH article about a Goldman note:

    "Goldman Warns Turkish Banks Will Be Wiped Out If Lira Hits 7.1"
    https://www.zerohedge.com/news/2018...rkish-banks-will-be-wiped-out-if-lira-hits-71

    .
     
  8. Humpy

    Humpy

    Most of their talented people got sacked after the failed coup. Leaving the religious boneheads in power for the foreseeable future.
    A bad bet probably.
     
    p0box4 and SunTrader like this.
  9. SunTrader

    SunTrader

    I don't trade/own stocks so what do I know but if I were to consider Turkish stocks I'd wait for some kind of bottom and initial first move before I'd seriously consider diving in.
     
    Snuskpelle likes this.
  10. Yo Mama says... "Don't buy a stock in a downtrend".
     
    #10     Aug 13, 2018
    Snuskpelle, birdman and Cswim63 like this.