65 - Why I don't invest in Russia or China

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Mental Models discussed in this podcast:

• Corruption
• Property Rights
• Government Ownership of Means of Production

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Show Outline

The full show notes for this episode are available at https://www.diyinvesting.org/Episode65

Two Key Characteristics Shared by Russia and China

• High Government ownership of key businesses
  • Could lead to corruption
  • Businesses could be influenced to make uneconomic investments
• I can't trust the numbers. (Due to the communist government)
  • Corporate frauds are more common
  • Both Russia and China have a critical lack of property rights.

Summary:

If you are going to make any investment you need to be sure that your principal is safe and a reasonable return on your investment is likely. Lack of strong property rights threatens my principal and government control of businesses threatens my reasonable rate of return.