By the time you read this, I'll have landed in Kiev, the capital of Ukraine.
While I'm in the country, I'll meet with the heads of a few investment banks, some big investors, and an old friend from Moscow who's a corporate-restructuring specialist. I'll also talk to a handful of journalists, a lawmaker or two, and the management teams of a few companies I'm considering recommending in The S&A Global Contrarian.
I'm intending to go to an investor conference sponsored by one of the largest Ukrainian brokerage houses, where the prime minister, several members of parliament, and a number of other high-profile people are scheduled to speak.
Usually, investment conferences aren't that interesting. But with the recent crisis, I'm fascinated to hear what the new interim government has to say. I'm also looking forward to seeing how many investors are in attendance.
Based on sentiment and valuations, Ukraine is deeply out of favor... so I'm interested to see how serious the investors in attendance are about putting money to work in Ukraine.
While I'm in Ukraine, I'm hoping to get a better understanding of where the country is going... and whether it's in as bad a shape as it seems. I'll also look for catalysts that could push the market from bad to less bad. Remember, that's where the best contrarian opportunities are.
For now, though, the focus is on whether Russia will try to annex more of Ukraine after Crimea. Tens of thousands of Russian troops are assembled along the eastern border of Ukraine. That's far more than necessary for a "training exercise," which was the initial, flimsy Russian explanation for the sudden increase in military presence. With domestic public opinion supporting him, Russian President Vladimir Putin might not be finished absorbing parts of Ukraine yet.
I expect Kiev to be safe in the event of renewed Russian military activity... but I'm hoping that no invasion happens while I'm there...
Editor's note: Kim just sent us the following "boots on the ground" update from Kiev...
Below are some photos from my trip so far. A few words of explanation...
Most of these photos are from Khreshchatyk Street, the main drag in the center of Kiev, with Independence Square at its core. The entire 1.2 km stretch of road is still barricaded off.
There are tents set up all down the street… along with piles of rubble and tires and park benches and anything else the hundreds of thousands of protestors – who clogged the road during the peak of the protests – could find to keep troops at bay.
There are dozens of makeshift memorials to the 100 or so people who died in the protests. The big Christmas tree-shaped structure in the square features a visage (on a bogus Time magazine cover) of Hitler reimagined as Vladimir Putin.
I made a point of not speaking in Russian as I walked down the street. It probably wouldn't be dangerous for someone who has a difficult-to-place accent like me. But I wasn't about to ask for trouble.
Today, people walk down Khreshchatyk like it's nothing more than a quiet stroll to the shops… after all, to get anyplace downtown the chances are good you'll have to go down it. Driving anywhere in town is a bit of bear, as you have to go all the way around the road...
But the aura of the street is overpowering and haunting and humbling… it was only weeks ago that it was teeming with people who believed enough in what they were doing to risk, well, everything, as you can see here.
It's a testament to the awesome power of conviction. All that talk of how Ukrainians are as similar to Russians as, say, New Yorkers are to people from Boston… well, this strip of street suggests, compellingly, otherwise.
A lot of people believe that the EU and the U.S. funded the protestors. This may partially be the case. I certainly wouldn't put it pat them... although that they'd be competent enough to prevent any concrete proof from surfacing strains my credulity. And hundreds of thousands of people don't risk their lives for a few hyrvnia (the local currency had devalued around 25% over the past few months). So, I don't really buy it.
There's also a lot of debate about who was really behind the snipers, who accounted for many of the deaths during protests. All sides in the conflict have powerful propaganda machines, and distinguishing fact from fiction is a very complicated thing in Ukraine today.
And it feels like it all could flare up again. The tents are still up, and the barricades haven't been completely cleared, in part because protestors want to be sure that the current interim government stays focused and honest. (I saw a number of members of the interim government speak at a conference today, against my impulses – this is Ukraine, and the former Soviet Union, after all – but I was pretty impressed. More on that soon.)
At night, the streets (and metro) of Kiev are almost deserted. Restaurants are quiet. Bars are empty. Usually – a number of people have told me – it's a bustling place.
People are afraid of what might happen...
Reports in the international media that tens of thousands Russian troops are massed on the Russian border – whether those reports are NATO/U.S. propaganda or reality, I have no idea – have discouraged people from venturing out.
The state of the Ukrainian military is such – I've read and heard – that it wouldn't take more than five thousand Russian troops a few hours to move through the 200 km separating Kiev from the Russian border and capture the Ukrainian capital.
And few nights ago some members of the nationalist wing were shot at a restaurant a few blocks away from the hotel where I'm staying (ironically, or not, by a place called "Mafia" that serves, among other delicacies, sushi… you can't look two ways here without seeing a sushi joint).
The little fridge magnets shaped like golden loaves of bread (next to the blue and yellow winter caps in the photo below) are a reference to a trinket that was found in one of the massive villas of deposed president Viktor Yanukovych… the man liked his gold, apparently.
The shot of the inside of my hotel room shows the maxi-bar (bottles of liquor and glasses on the wall, by the massive built-in TV screen), and the mini-bar (what I think most people are more used to) at the far end of the photo.
Moscow outlawed wandering down the street with an open beer years ago, spring weekend style… but in this and many other ways, Kiev feels like Moscow (or, rather, a smaller, nicer, more manageable, more European Moscow) from a decade ago.
Kiev is a beautiful and pleasant city… I've been here half a dozen times, but never had the opportunity to really appreciate it.
Finally, the photo of a menu... You'll see an entry for salo — aka, lard or fat — a Ukrainian delicacy. It's pure, unadulterated animal fat. I'll take a borscht (a traditional beet-based Ukrainian soup… cognac infused, which I had a few nights ago, was the best I'd ever had) any day.
More soon...
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