The details of how and why a Russian jet was shot down near the Turkish-Syrian border remain unclear, but one thing can already be said: Russian President Vladimir Putin has misjudged his Turkish counterpart and former friend, Recep Tayyip Erdogan.

According to Turkey's military, one of its F-16s fired on a jet over Turkish territory, after the plane's pilots ignored 10 warnings to leave. So the North Atlantic Treaty Organization's second-largest military is claiming to have shot down an aircraft in anger that was probably Russian, and is now "consulting" with its NATO allies.

Russia's defense ministry confirmed one of its jets had crashed, but said the plane was flying in Syrian airspace at an altitude of 6000 meters when it was fired upon from the ground. Putin blamed "backstabbing" and said his country's plane was 1 kilometer (0.6 miles) inside Syria when hit. So there's a dispute.

These kinds of skirmishes happened between NATO and the former Soviet Union during the Cold War, but make no mistake; this is a big deal. What comes next will be a test of maturity for all sides. European stocks slid on the news with Russia's main index down by 4 percent.

By now, after flatly denying that a Russian missile brought down Malaysian Airlines MH-17 over Eastern Ukraine last year (despite a meticulous Dutch investigation), and pretending for days that there was no evidence that a bomb destroyed a Russian airliner over Egypt in October, Russia's word counts for zero in matters of aviation. But that doesn't prove it is lying on the all-important question of where its Su-24 was when it was hit.

Turkey summoned Russia's ambassador on Friday to demand that Russia stop bombing Turkmen rebels in Syria, who hold territory just across the border and are openly supported by Turkey. Ambassador Andrei Karlov and his military attache were reportedly told that Turkey would "not be indifferent" to any harm that came to Turkmen civilians. In order to bomb these rebels (who are part of the Free Syrian Army, rather than Russia's proclaimed target, Islamic State), Russian and Syrian aircraft have to fly very close to Turkish airspace. So it is conceivable that Erdogan has simply decided to warn Putin off.

The Turkish version of events is also plausible. Russian jets have been flirting with Turkish airspace ever since Putin began his military intervention in Syria. Turkey may just have decided enough was enough.

David Fuller's view

In terms of investment opportunities, what should one conclude about Turkey and Russia today? 

With a strong and initially successful government, it appeared that Turkey could do not wrong up until 2Q 2013.  It was also considered by some to be a candidate for the European Union.  Turkey is not expensive today (p/e 11.43 & yield 3.24).  However, Erdogan’s increasingly authoritarian rule has damaged Turkey’s democracy.  This appears to be driving investors away because the chart above looks top-heavy.

Russia has long been cheap (p/e 10.24 & yield 4.73) but remains a kleptocracy.  Reckless Putin has also made far more enemies than friends in recent years.  A strong rally by industrial commodities would halt Russia’s economic deterioration but it will not fulfil its economic potential without a successful change of government.