The iShares Russia ETF currently has a P/E of 6, which is extaordinarily low.
EDIT: P/E is 6 according to Yahoo! Finance but 16 according to iShares (h/t Ryan Carey for pointing this out). These values are not even close so I don’t know what’s going on here.
We looked into this fairly deeply and found that the lower value corresponds to the harmonic weighted average: https://en.wikipedia.org/wiki/Harmonic_mean. This is the one that is relevant for mean reversion. When the valuations of the companies vary widely, the different means give very different answers. The most robust is the Shiller P/E, and for Russia, it is 5 now.
The iShares Russia ETF currently has a P/E of 6, which is extaordinarily low.
EDIT: P/E is 6 according to Yahoo! Finance but 16 according to iShares (h/t Ryan Carey for pointing this out). These values are not even close so I don’t know what’s going on here.
We looked into this fairly deeply and found that the lower value corresponds to the harmonic weighted average: https://en.wikipedia.org/wiki/Harmonic_mean. This is the one that is relevant for mean reversion. When the valuations of the companies vary widely, the different means give very different answers. The most robust is the Shiller P/E, and for Russia, it is 5 now.