Let's say you only watch MSNBC and CNN to get your news. You would see that an overwhelming consensus of allegedly bipartisan experts holds that Russia hacked our election in order to put Donald Trump in the White House, and that Trump has been and is still being manipulated by Vladimir Putin in order to undermine US interests in favor of Russian interests.
Then, naturally, you would want to invest in the Russian stock market. You'd want to long the Ruble and long Russian equities. A US president can do a lot for Russia: He can cut back on energy production, driving the cost of natural gas and oil up to the point where Russia's inefficient system can actually make a profit pumping the stuff out of the ground. He can pull Russia out of the quasi-wilderness of not being permitted to fully participate in western-run payment processing systems. A US president can lessen security pressures on Russia by distancing himself from other regional powers like Poland, which is probably Russia's most serious rival among border states. Yes, the POTUS can do a lot to help Russia, and since this POTUS is clearly in league with the Russians who manipulate him easily, then why not make some money by investing accordingly?
Congratulations, you just chose to invest in the 2nd worst performing stock market in the world. The chart below shows the stock market returns for last year, President Trump's first year in office, ranked by returns. It looks only at countries which are easily accessible by investors, which means that there is a large country-specific index for each of them.
Now it might be that this is just a stock market return thing, not pertaining to the underlying business dynamics. For example, often a market can perform poorly because they were overvalued at the beginning of the period, so that even a strongly growing economy cannot justify such sky-high valuations. Is that what happened with Russia? No, it is not. As you can see on the graph below, (which ranks countries from most attractive valued to least attractively valued in the left column) Russia was extremely undervalued compared to the rest of the world. It was on sale, bargain basement, Crazy Ivan, “We're practically giving it all away!”-prices.
Ruling party pro economic reform, opposition very ineffective
Pro-market and nationalist parties took power
Generally pro-growth culture, by a left of center leader who was expected to be more anti-growth.
Export growth, delay in rate hikes
Since valuation at the time of purchase is a major driver of returns, Russia had a major tailwind behind it. And yet it performed abysmally. Why? Because it had abysmal corporate earnings growth. That means this abysmal relative performance is not a matter of reverting to the mean – Russia’s poor business and economic performance earned it the poor investment performance we've been seeing.
Anyone who bought the idea that America is now governed by Putin’s puppets and invested accordingly left a lot of rubles on the table.