Yevhen Pentsak's advice :« ... don't hold your money on deposits»

Yevhen Pentsak (50) 16 March'09

Tags: rebalancing, investment portfolio, investments, deposit, eurobond, banking system, Ukreximbank, Yevhen Pentsak

Bad stability is better, than good uncertainty! How to get back a deposit, where to keep savings, as well as where to wait till the crisis will over, how to find a personal safety island? Do you have answers for these questions yet?

Bad stability is better, than good uncertainty! How to get back a deposit, where to keep savings, as well as where to wait till the crisis will over, how to find a personal safety island? Do you have answers for these questions yet?

Personally we do not have answers for all these questions yet. But we try to discuss them frankly, to express the uncertainty in the rightness of actions of state leaders in order to escape from this whirl of financial collapse where our country is falling down.

Together we overcome all the difficulties: thought to the thought, desire to the desire, word to assertion, conception to practice, and we will find a way out. We highly appreciate your thoughts, words, and propose to join to our comments. As to me, I just try to moderate the train of your thoughts; I do not claim the truth, I only try to motivate your reflections.

People say that scientists deduced a special code of leadership and tested it on rats. It appears that a rat, deduced by this method, has an ability to lead all congeners even on a dangerous for their life way. For example, such rat can lead on deep water and scupper all together with itself. At once I have thought about the utility of such invention for humanity in the context of the last events: we won’t refuse from such zvarych!

In this difficult time, I want to warn the population of Ukraine not to follow after pseudo nation leaders who try to profit from economic crisis. We have to remember Murphy’s Extended Law: «If a series of events can go wrong, they will do so in the worst possible sequence.»

More rational thoughts wander among economists, analysts who have an insider access to the real state of businesses in bank industry and state of economy on the whole. In particular, ex-minister of economics Victor Suslov believes that:

«There is the real threat, that some commercial financial establishments will sink debts towards western banks by means of money of citizens’ deposits. … it is impossible to trust the Ukrainian banks. From this moment I wouldn’t advise to hold money on deposits already, because everything that takes place all around testifies to the possible collapse of the banking system. Also an approving position on a failure to deposits’ return is the biggest error of NBU».

Ex-member of the government recommends: «It’s time to impose a real estate and land tax, to raise excises, abolish the preferred treatment of taxation and various kinds of preference» (Contracts ¹11, 2009, pgs. 10-11).

I am convinced that due to escalation of economic situation, more and more rational thoughts will be heard from governmental officials. But an economic situation in Ukraine from the state of time trouble can pass to the zugzwang’s state (a term originally used in chess). In chess by zugzwang we understand such situation in which it is already impossible to find correct move: all actions lead to the loss (default).

Thoughts of rationality are reached us from the USA, where lawyers continue hearing concerning to the rescue of «drowning American financial frigate AIG». They ask taxpayers, whether they have to pay compensative packages to AIG top-management of a 1 milliard of dollars, which took a company to such a state?

Thoughts of rationality also reached us from China. Recently, Wen Jiabao, prime-minister of China, became worried about the fate of biggest capital investments of China in the state bonds of the USA. «Not only the government of China, but also every investor can be absolutely secure about reliability of investments in the USA», - Barack Obama answered.

Personally when I hear words and such word combinations as absolute, best decision, optimal way, I begin really worried about veracity and sincerity of words of those, who expresses such opinion.

Increase of investment in the economy of the USA is not good news for us, because it means recession of investments in emergent economies and Ukraine is considered to be one of them.

In future I recommend to follow the conservative strategy:

  • 20% - in hryvnya,
  • 30% - in dollar,
  • 30% - in euro,
  • 20% - in available or cashless gold (the value of gold varies round a mark 925 dollars/ozt).

As to the currency market, I suppose that this week a calm will be continued. Eurobonds’ Coupon payments by Ukreximbank and Naftogaz may exert some pressure on a hryvna.

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See also:

Мысли среди недели: индуктивные и дедуктивные методы исследования фондовых рынков

Очень часто мне приходится дискутировать о применимости тех или иных финансовых теорий к текущему анализу рынков, осуществление на его основе прогнозов и инвестиционных решений. Еще чаще мне приходилось наблюдать за спорами теоретиков и практиков на финансовом фундаменте. Меня всегда удивляло, почему они спорят? Ученые и исследователи используют общепринятые модели, описанные во всех классических учебниках, их знает каждый магистр по финансам. Почему выводы этих моделей не нравятся практикам?

Comments:

Andriy123 18/03/2009 08:49

п.Євгене, з огляду вище описаної складної непрогнозованої фінансової обстановки в Україні та наданих Вами рекомендацій - що означає в цій ситуації тримати заощадження у безготівковому золоті, і чи варто зараз купувати золото, ціна на яке, мабуть, знаходиться на піку?
Дякую.

pentsak@kmbs.com.ua 18/03/2009 11:31

п. Андрію, якою складною і непрогнозованою не була ситуація нам потрібно в чомусь тримати наші заощадження (інвестиційний портфель). Кожна компонента запропонованого інвестиційного портфеля служить захистом (хеджем) від відповідного ризику. Наприклад, 20% у гривні є хеджем стосовно зміцнення гривні, 30% у доларі і 30% у євро взаєний хедж падіння - зростання долара відносно євро, а 305 у золоті відображає невпевненість у зростанні економіки США у найближчому періоді. Тоді західний інвестор буде частково виходити з акцій і зупиниться на золоті, попит збільшиться і воно зросте в ціні. Стосовно піку золота ніхто не знає, все залежить від того, як будуть розвиватись події на фондових ринках. Якщо ситуація буде покращуватись, то з золота потрібно виходити і вкладатися в акції, наприклад на українському фондовому ринку. Безготівкове золото означає відкриття поточного золотого рахунку в одному з надійних українських банків. Їх мало, але потрібно вибирати ...

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