Some emerging markets suffer “discounts for obnoxious governments” (Dogs), says Buttonwood in The Economist. The Russian state’s capriciousness and attacks on property rights, for example, mean its stocks trade on a price/earnings (p/e) ratio of below six.
At the average emerging market p/e of 12.5, investors would be shelling out an additional $1trn – $7,000 for every Russian citizen. Argentina, Iran and Zimbabwe also have big Dogs.