Maybe socialism is not all that bad. Right now, the United States government effectively owns the nation’s major banks, mortgage lenders, and insurer. Even more, they just changed long-standing securities laws and financially backed the short-term cash market.

Washington’s action is making the heroes of a free-market economy scratch their skin off, but it is hard to deny the monumentally positive impact it is having on Wall Street. All major indices are through the roof this morning.

What will happen on Monday, next week, next year, or even next decade, nobody knows. The Treasury Department and the Federal Reserve have re-written the world’s economic rules. Wall Street was forced to throw out its old textbooks. Now it must sit back and wait as we write a new one.

Today may be a great day on the Street. But absolutely nobody knows what impact all of these knee-jerk regulations will have on the global markets in the future.

Some cash for the weekend

With near-zero certainty in the markets, I am not willing to take any undue risks. Nearly all my recent equity picks are way into positive territory. You need to lock in the gains.

Mechel (NYSE:MTL) is up by nearly 25%. Vimpel Communications (NYSE:VIP) is up by nearly 35%. And Nortel (NYSE:NT) is up close to 10% since I recommended it. And do not forget my third Russian pick, Rostelecom (NYSE:ROS) that I recommended selling for gains of nearly 40% yesterday. These are sizeable gains in just a few days.

If you followed my advice and bought shares of these companies earlier this week, sell them all.

The equities market is in a great mood today. Monday could be an entirely different situation. By then, we could have new rules, new economic laws, and an entirely different sentiment on Wall Street. The potential gains are much smaller than the potential losses.

Take your money off the table and stay tuned. I will have the next round of winners online in no time.

Source: Lock in huge profits: Sell Mechel (MTL), Vimpel (VIP) and Nortel (NT)

This from Today’s Financial News:

Rostelecom (NYSE:ROS) is up by over 35% [on Thursday], handing investors that followed my advice 35%-plus gains in just one trading day. Time to take those gains off the table!

I just love a volatile market. For the folks willing to do their homework and do some research, a roller-coaster market can lead to big gains.

The Russian markets are in turmoil. With 80% of the country’s equities representing commodity-based companies, it is no surprise the markets plunged as the global economy entered an obvious slowdown phase. While the discounting of many of these companies was needed, there was no need to slash the prices of many other Russian companies.

On Wednesday, I wrote about three Russian companies with share prices that got hammered in the wake of the country’s stock market collapse. All three are strong firms that deserve much higher valuations. The proof is hitting the ticker tape today.

My pick Rostelecom (NYSE:ROS) is up by over 35%, handing investors that followed my advice huge one-day gains. In this here-today-gone-tomorrow trading world, it is best to take those gains off the table.

Sell your Rostelecom position.

You should hold onto the two other Russian investments I recommended, Mechel OAO (NYSE:MTL) and Vimpel Communications (NYSE:VIP). Both positions are well into positive territory and should continue to rise in value.

Source: Making Money as Markets Go Mad: Sell Rostelecom (ROS) for 35%+ Gains

Andrew Snyder says when an emerging market such as Russia sells off unexpectedly it opens up great buying opportunities.

Andrew recommends three stocks that have been dramatically oversold in the crash. They are Vimpel-Communications (NYSE:VIP), Rostelecom (NYSE:ROS) and Mechel OAO (NYSE:MTL).

This from Today’s Financial News:

Although American financial problems are dominating headlines today, Russia is having some serious problems of its own.

Yesterday, Moscow and the country’s Central Bank were forced to infuse $20 billion into the Russia’s top banks. Meanwhile, the country’s major equity exchange, the Moscow Interbank Currency Exchange (MISEX), fell close to 20% in intraday trading, forcing officials to halt trading and close shop an hour earlier than normal.

Today the free fall continued, forcing Russia to raise its infusion to over $40 billion and halt trading once again. The purge needed to be stopped before it imploded and corporate valuations were needlessly erased.

If this sounds like a dire situation it is because it most certainly is.  But it is not the end of the world.

Few economists believed Russia’s economy could keep up its breakneck pace. Especially since the gains were based primarily on highly cyclical businesses. Remember, nearly 80% of the country’s market is based on commodities, which typically drop even faster than they climb.

Russia may be reeling in pain, but its problems have created a great investment opportunity. Every single one of its listed equities was in the red yesterday, whether they deserved to be or not. Some of the countries strongest and fastest-growing companies saw their valuations lowered by ten percent or more.

It gives you a perfect buying opportunity. Excellent investments are selling at a rare discount.

A powerful buying opportunity

We took one main rule from the Taipan Group when we created TodaysFinancialNews.com. When an emerging market sells off unexpectedly, pick the three ADRs that have sold off most and buy:

Three stocks in particular caught my eye.  Each of them saw its valuation erroneously stripped by huge proportions.

The first company you need to take a look at is Vimpel-Communications (NYSE:VIP). It’s one of Russia’s strongest and most profitable telecoms. It is the Verizon of Russia.

The great thing about telecoms is their businesses rarely erode. Once folks sign up for their services, they stick around for a long time. Because of that aspect of its business model, Vimpel does not deserve the nearly 50% cut in its valuation it has seen over the past nine months.

After the company announced its most recent earnings results, smart investors realized its value should be increasing. Vimpel’s revenues are growing and its entry into new markets continues at a hefty pace.

Shares are trading at a fantastic discount.  Do not miss this opportunity to get a strong foreign company, which is listed on the NYSE, at a price that will make any value investor drool.

After you are done buying your shares of Vimpel, take a look at Mechel OAO (NYSE:MTL). Four months ago, the mining and steel company was trading for $58. Today, you can get shares for under $20.

Will it go back to $58 anytime soon? Probably not.

Does a company with $7.6 billion in revenues last year deserve a valuation of just $8.09 billion?  Absolutely not! This company is worth at least twice that.  Shares should be selling for around $40, which means American investors have a fantastic opportunity at their feet.

With its coal and steel products being sold around the world, Mechel will continue to see strong annual revenues. After all, the coal industry is just like the telecom industry.  Once a coal plant fires up, it will keep those fires burning for decades.  To do it, they need a constant supply of coal.

Buying shares of this company is no different than buying a dollar bill for just fifty cents.  It is a deal you cannot refuse.

Finally, let’s head back to the Russian telecom. On Monday, Rostelecom (NYSE:ROS) was trading for $65.

Yesterday… about $42.

Today… below $30.

Shares of the company have plummeted thanks to the overall weakness in Moscow. The company is not quite as financially strong as the other two companies, but is so undervalued at current prices that it is an opportunity you cannot miss.

Once the shakeout in Russia slows, investors will start climbing out of the cracks and crevasses they are hiding in and will start looking for the most undervalued and best-performing investments they can find.

No doubt, Rostelecom will be one of them. Just a small bounce in share price could make you big money.

Thanks to the Feds intervention, Wall Street is making a controlled descent.  Russia made an uncontrolled plunge.

Now that Moscow has reached the bottom, smart investors need to search out the most undervalued companies and buy them at fire-sale kind of prices.

This is not an investing opportunity that comes every day.  Take advantage of it.

Source: Moscow crashes: Time to buy Vimpel-Communications (VIP), Mechel (MTL) and Rostelecom (ROS)?

Back in 2003, the Goldman Sachs Group Inc. (GS) – eager to push its clients toward emerging markets investment – created the acronym “BRIC” to stand for Brazil, Russia, India and China, the four emerging markets the investment bank’s strategists believed would become a dominant part of the world economy in the years ahead.

What started as a marketing ploy is now a profit play that global investors have to consider, since at least three of the four countries – Brazil, China and India – feature sound economies with powerful growth rates, and stock markets with reasonable valuations.

In fact, China and India are two of the fastest-growing investable economies on the planet, and have been transformed into global leaders in both the manufacturing and service sectors. At the same time, Brazil and Russia each has become a cornucopia of commodities, and are emerging as global leaders in the white-hot global energy sector.

These newfound global strengths have provided all four of these countries access to massive amounts of capital, a key element of the investing methodology in both Money Morning and The Money Map Report.

With foreign reserves of $1.68 trillion, China basically has all the capital it needs for the development projects it has on the drawing board. India has nearly $300 billion in foreign capital invested in its stock market; and that virtually guarantees it will remain on global investors’ radar screens for the foreseeable future.

After conducting this analysis, we decided to develop “The BRIC Report,” a periodic feature we’ll use to update you on both the latest developments, and the latest profit plays, in each of the BRIC economies and BRIC stock markets.

Building Profits, BRIC by BRIC

While the BRIC countries are by no means the world’s only attractive emerging markets – from time to time, in fact, the BRIC markets may become overpriced or their growth prospects may ebb – over the long haul, these markets remain strong opportunities for investors, and should remain at the top of your list of profit plays. Here are the four top factors why this is true.

• Population: The four BRIC markets are the largest economies and have some of the largest populations among emerging-market countries (which don’t include such already-emerged East Asian markets as Japan and South Korea). Companies from BRIC countries have large-and-competitive domestic markets, meaning they’re already globally competitive when they venture abroad.

• Rapid Growth: China and India have two of the fastest growth rates in the world, and that looks likely to continue. Other rapidly growing countries are much smaller – and more risky.

• Natural Resources: While China and India are the major poles of global manufacturing and service growth, the two other BRICs – Brazil and Russia – are cornucopia of commodities and energy, which in the past have been inadequately exploited. The escalating energy and commodity prices of the last five years have brought rapid growth to both countries, enabling them to develop active consumer sectors with a multitude of investable companies.

• Access to Capital: Brazil recently achieved an investment grade debt rating from Standard and Poor’s Inc., giving the Latin American country access to the major global pools of institutional capital, while also significantly lowering the cost of its debt. Russia has built up foreign-exchange reserves of more than $400 billion, allowing it to break free of a reliance on foreign capital. China, with a record $1.68 trillion of foreign exchange reserves, has access to all the capital it can handle. Finally, India may finally have broken out of the cycle of foreign exchange constraints that had previously prevented rapid growth: With foreign capital of almost $300 billion invested in its stock market, it is very much on investors’ radar screens worldwide.

Let’s take a look at the markets one at a time.

Judging by the performance of outgoing President Vladimir Putin, Europe should beware: The so-called “links” he’s seeking may resemble those used to chain together prisoners in the Gulag.

On the other hand – though it’s admittedly unpleasant to say so – there’s a point at which the effects of high oil prices are so great that in the short run they far outweigh one’s distaste for the thuggish Russian regime. And at $123 a barrel, we may be at that point.

Politically, Russia has pretty much reverted to the pre-1991 Soviet system.

Today, just like then, there’s only one real party: The United Russia party, which controls 315 of the 450 seats in the Duma (essentially the lower house of parliament) and whose leader is one Vladimir Vladimirovich Putin. There is considerable censorship of the media, and dissident reporters and editors have a habit of disappearing – not that there are many left now. There is huge emphasis on military power, and on throwing Russia’s weight around in foreign policy.

What’s New About the “New” Russia

However, there are a couple of significant economic differences between today’s Russia and the pre-1991 Soviet Union. One key difference is economic: While the state still controls most of the property today, it doesn’t control all of it, as it did before 1991. Even so, foreign investment in strategic sectors of the Russian economy was effectively banned by a decree of May 5. For this purpose “strategic” covers not only the military sector and energy, but also more than half of Russia’s output.

So, if the afore-mentioned difference is one of substance, this next one is all about style. Prior to 1991, Politburo members were relatively impoverished and notorious for their baggy Soviet suits and lack of fashion sense; these days, the top brass – and especially Putin – are snappy dressers with a nice Italian wardrobe, and bank accounts to match.

Putin’s even viewed as a sex symbol: In a recent No. 1 single in Russia, a female pop star cooed that she needed a new boyfriend and that “Takogo kak Putin” (he must be like Putin), and not a useless wimp like her last beau!

If you analyze the economic impact of Putin’s regime since 2000, you’ll find the result has been huge economic growth – an annual average of nearly 10% since that time with growth of 8.1% in 2007. Now a certain percentage of that was due to the proverbial “dead-cat bounce” as the economy recovered from the debilitated state it had reached by 1998-99. An additional portion reflected the benefit of a Ronald Reaganesque tax reform passed in 2001, which produced a “flat tax” income-tax system with a rate of 13%.

That caused many conservative U.S. commentators to favor the Putin regime in its early years, despite the signs of human rights abuses. However, since the arrest and imprisonment of oil company tycoon Mikhail Khodorkovsky and the looting of his company Yukos, it has become obvious that the nominal rate of income tax doesn’t matter much when the state can – and does – seize anything it wants.

Since at least 2004, Russia’s economic growth has been driven almost entirely by high oil prices. At first, oil production increased along with prices, producing real economic progress. Since Putin’s partial seizure of Royal Dutch Shell PLC (RDS.A, RDS.B) concessions in 2006 and BP PLC (BP) earlier this year, it has become obvious that the Russian state will control all economic activity in the energy sector. As a result, output has now stopped increasing and in this year’s first quarter it actually declined slightly.

I wouldn’t want to be a wealthy entrepreneur in today’s Russia, no matter how many bodyguards I surrounded myself with. At the same time, however, there’s also no question that some of the benefits of economic growth have gone to the Russian people – something that was rarely, if ever, true under the old Soviet system.

Consumer spending rose 12% in 2006 and matched GDP growth of 8% in 2007. With a current account surplus of $74 billion in 2007, foreign exchange reserves of $470 billion and ever-escalating oil prices, Russia’s ruble has been strong, making imports super cheap. Given the lack of high quality goods in Russian stores before 1991, and the impoverishment of the country in the 1990s, this consumer boom is not surprising. But it does mean that there are finally investment opportunities in Russia outside the energy sector, in places where the Russian government’s heavy hand is less evident.

As long as global oil prices remain high, or continue increasing as they have in the past five years, Russian energy companies will make record profits and Russian consumers will enjoy a bonanza, producing profits in consumer sectors also. Once energy prices turn around, Russia is in trouble. However, there is no sign of that yet, and at least in the short term, there’s money to be made from the continued advance in energy prices.

Politically, it’s unclear how much of a difference Medvedev will make, since, after all, Putin will now serve as prime minister (one news report described Medvedev as the “puppet president” of Putin’s).

To be sure, as the former CEO of Gazprom OAO (OTC: OGZPY), Medvedev has at least a basic knowledge of how business works. And it’s likely that he’ll continue to follow Russia’s current “mixed economy” policy, meaning that “strategic” sectors will remain government playthings, while non-strategic sectors such as consumer goods are pretty much left to operate freely – and unharmed. Russia even intends to use its version of a “sovereign wealth fund” to go on a bit of a global buying spree, although it remains to be seen just how aggressive it will be.

Presumably, if Putin had wanted to restore full Soviet Communism he would have chosen someone else; that at least is a consolation.

Cashing in on Russian Capitalism

Does this leave any real plays for U.S. investors? It does, but you must keep in mind that this is a highly speculative market, and that you should be ready to sell if U.S. interest rates are increased. The reason: An upward increase in U.S. interest rates could cause a reversal in energy and commodity prices, which would have a major impact on the Russian economic advance. Here are a few Russian profit plays to consider:

• OAO Gazprom (OTC: OGZPY): This is one of the obvious Russian plays, the state-owned natural gas monopoly with ambitions to control Western Europe’s gas supplies. Since its ambitions don’t yet extend to the U.S. market, it is quoted only on the Pink Sheets. It has a Price/Earnings ratio of 12, based on trailing earnings, but gas prices and Gazprom’s dominance are both rising.
• Lukoil (OTC: LUKOY): The other obvious Russian heavyweight, Lukoil is the largest state-controlled oil company; again, the firm doesn’t care if you buy the stock, meaning it also is only available through the Pink Sheets. This one has a trailing P/E ratio of only 8, and that was based on 2007 earnings when oil prices for the year averaged $80. A good speculative play on a further run-up in oil prices.

Moving outside the oil sector, there are two mobile telephone companies you might look at:

• Vimpel-Communications (VIP): This company has 55 million subscribers and mobile operations in Russia, Kazakhstan, Ukraine, Uzbekistan, Tajikistan, Georgia and Armenia. Right now, it trades at 22 times trailing earnings, but only 13 times forward earnings. It does pay a dividend, but the yield is only 0.9%. I slightly prefer its collection of non-Russian operations to those of MBT (the Russian operator we’ll get to in a moment) – you especially want Kazakhstan, which is oil-rich.
• Mobile TeleSystems OJSC (MBT): This mobile operator has 73 million subscribers and operations in Russia, Ukraine, Uzbekistan and Turkmenistan. It is cheaper than Vimpelcom, trading at only 14 times trailing earnings and 12 times forward earnings, and it has a dividend yield of 2.5%.
• Finally, for a flyer on Russia’s consumer-oriented agribusiness, albeit an expensive one, you might look at Wimm-Bill-Dann Foods OJSC (WBD), which manufactures and sells branded dairy, juice, water and baby-foods products in the Russian market. The shares trade at a pricey 37 times trailing earnings, and the forward P/E of 21 isn’t much of an improvement. The dividend yield is tiny at 0.1%. However, earnings are racing forward as the Russian consumer market opens up to quality branded goods.

Don’t put your retirement savings in the Russian market – Vladimir Putin might get tempted! However, for a modest oil-related flutter, Russia is well worth a look.