Four reasons banks aren’t cheap enough
Weighing in on bank valuations again, here are four fundamental reasons why I ‘m not buying banks: Price, profits, cashflow, and deposits.
The long-term price earnings ratio is my preferred measure of value. I take the average of up to nine years of earnings and divide it into the current share price. Using the average of [...]
Why didn’t we see the credit crunch coming?
Because we can’t see the future, of course. So why did we willingly ignore the possibility events like these might happen? Beats me.
Yesterday John Humphreys spent a day in the City of London (BBC audio) trying to get a fix on the credit crunch for the Today Programme. One of the City types he quizzed [...]
More than Behavioural Investing
Behavioural Investing is a rare book. One that lives up to all the promise, and can even distract a man from his Swedish meatballs.
It was over three months ago that James Montier’s new (well it was then) book arrived at Interactive HQ and I received it with high expectations. Amazingly, it’s met them.
I started reading [...]
What were you doing on 19 October 1987?
Friday is the 20th anniversary of ‘Black Monday’, when the Dow Jones fell 22.6%. The FTSE All-Share fell 20% in two days. Most investors can remember what they were doing then and, for some, it changed their lives.
Peter Lynch starts my favourite investing book, ‘One Up on Wall Street’, reminding readers:
You can’t bring up [...]
This is what the end of capitalism is like…
When you woke up this morning it may have felt as if the end of capitalism was nigh. That’s unlikely, when you consider what the end of capitalism would really feel like.
Listening to Bloomberg Radio, the headlines seem mildly apocalyptic. Fears that defaulting US mortgage holders will lead to global debt contagion re-emerged as BNP [...]
You. Investor. You’re a sucker
Academic theory suggests you can’t knowingly beat the stockmarket. Investors that do are just lucky, or crooked. The majority that don’t are suckers. It’s not true.
My nomination for top blog posting on another blog this year is this one: You, investor, are a sucker. It sent me into a bout of introspection that all investors [...]
Who’s afraid of the big bad bear?
The most popular article I have written for some time was “The Great Crash of 2009“, where I knitted together the ideas of a well known bull, Ken Fisher, and a well known bear, Jeremy Grantham and rather cheekily suggested they were in agreement; that there will be a crash in 2009. The truth is, [...]
The Great Crash of 2009
Last week I went in search of the intellectual case for a sustained bull market. Most of the investors who responded liked the logic, but some felt I should give the bearish case more of an airing. It may take a while, but casting around for bearish ideas (they aren’t, frankly, too hard to find) [...]
The boom must go on
There’s a buzz on the Internet about a chart published on The Big Picture. It purports to show the level of the Dow over the last year against the period leading up to the Crash in October 1987. The two match, almost as if one were a shadow of the other. Back in 1987 the [...]
Man versus stock picking machine
There are still some jobs computers can’t do says Mark Thoma of Economist’s View. The Mechanical Turk was a chess machine that toured around Europe and America trouncing all-comers, including Napoleon and Benjamin Franklin. But the Turk was a hoax. The technology didn’t exist in 1854, the year of the its destruction, let alone in [...]
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