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Big name stocks for all seasons

Magic squared 
Things are looking up for the stockmarket according to Edmund Ng, an Analyst at Morgan Stanley. In a research note published the day before Halloween, he recommended investors buy shares in quality, stable, growth companies that typically perform well in bull markets.
During the panic culminating last March, investors abandoned companies with weak finances, and [...]

Blame it on Bachelier

A random walk into recession
You’ve got to watch these two interviews with Benoit Mandelbrot:

part 1
part 2

Mandelbrot saw the financial crisis of 2007 coming, He couldn’t have told you exactly when or how it would happen. His achievement was simply in recognising that big, and sometimes destructive events do happen in financial markets.
Maybe [...]

Reward, without the risk

In theory:
The holy grail
Contrary to conventional notions of risk and reward, buying shares in safe companies really does improve returns. That’s the message from a research note published last year by Morgan Stanley.
It published an alluring chart, which depicts what goes on over a stockmarket cycle (click on it for a larger version):

The story [...]

Guarding against ego risk

In practice:
Up fell, down dale
I’ll start today’s blog more or less where I finished Monday’s appraisal of Anite, a profitable software company, with strong finances that is maybe, kind of, but not certainly, cheap.
Like most value investors I think much more about safety, than I do about returns, taking the view, contrary to conventional thinking, [...]

Step forward… The real Thrifty 30

In practice:
I name this portfolio…
Regular readers will be familiar with my Thrifty 30 portfolios. They are portfolios of thirty shares in financially strong companies at cheap prices. I first tried it on this blog, then I had a go for Money Observer [pdf]. Up to now, though, I have not maintained a Thrifty 30 portfolio. [...]

Good companies at cheap prices

In practice
A random walk down Wall Street
How soon my ‘extended break’ ended. Now it feels like a mini-break and while I’m looking forward to resuming our discussions about the state of the market, and interesting companies, a bit of me is still in the middle of the Atlantic
All I got from Bermuda (apart [...]

Minsky, mortgages and you

In practice:
Minksy’s protracted moment
If you follow this blog, you’ll recognise these names: Jeremy Grantham, Nouriel Roubini, Robert Shiller, and James Montier. I’ve quoted them many times, and they anticipated the financial crisis.
They have something else in common, they’re all followers of economist Hyman Minsky. Grantham describes himself as a Minsky maven. Roubini  feared we were [...]

Not quite 30 glorious years

In history:
30 28 25 23 glorious years
The last 30 years were momentous for investors but what did they mean to you? I’m writing the story of the stockmarket in the words of the private investors who bought and sold shares since the Thatcher years. The article will appear in Money Observer later this year, [...]

Thrifty 30 progress report

In practice:
Good companies at cheap prices
Occasionally on Twitter investors, as opposed to people hawking porn sites, show interest in my tweets. So, when henrio83 asked ‘What’s happened to your thrifty thirty?’ I thought I should explain.
First, a quick recap.
Thrifty 30 is the name I gave a method of discovering good companies at cheap prices. [...]

Deficient Markets Hypothesis

In theory:
As dead as a parrot
In his latest note, Soc Gen Analyst James Montier, compares the efficient markets hypothesis (EMH) to Monty Python’s dead parrot.

No matter how much you point out that it is dead, the believers just respond that it is simply resting!
Montier’s often pronounced EMH dead. In fact, he’s getting so frustrated he’s [...]

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