The How and Why of value investing
In practice:
It’s not science, and it’s not about rockets
As a youngster, the “How and Why” books inspired me and I’ve just experienced overwhelming nostalgia browsing this website. I’m not alone. Definitely not alone!
How and Why books explained things, and to a boy who’s previous main source of wisdom had been the Valiant Annual, How [...]
How many economists does it take to start a flamewar?
In theory:
It takes two, baby
Of all the bad jokes about economists my favourite doesn’t involve changing light bulbs:
Q: Why did God create economists?
A: To make weather forecasters look good.
Although our understanding of the economy, and the atmosphere, is sophisticated it doesn’t mean we can predict how they will behave, mostly because of the bewildering number [...]
Cataclysm postponed, temporarily
In practice:
How inflation, population, and developing countries could take us back to the ‘70’s
You have to watch this two part video interview with Russell Napier on the FT site earlier this month:
Bear market bottoms
Cataclysmic bear market
If you do, come back, because I rang Mr Napier last week asking him to clarify his prophecy of doom. [...]
Huveaux, heaving itself back from the precipice
In practice:
How good is good?
Most studies I’ve seen demonstrate that the best returns come from the cheapest companies, and those with the strongest finances. Putting the two together, buying good companies at cheap prices, is common sense.
In practice it can be difficult to do because there is a trade-off between price and quality. It’s not [...]
The dash to trash
In practice:
Speculation is in the air
What a great Spring. The sun is out, the skies are blue, and unless you’ve been locked away in a bunker somewhere, investors and speculators have produced a remarkable turnaround in the stock market.
Here’s my plot:
The chart shows how we’re prepared to pay for UK shares (main market and [...]
OPD (again)
In practice:
Signs of overconfidence warn me off
Sorry about the absence of a post yesterday. OPD (OPD) waylaid me. It’s funny how it’s the shares you decide against that take the longest to appraise.
I wrote about the recruiter last week. It fits my pattern. The shares are dirt cheap. The 10 year price earnings ratio is [...]
OPD: A classic boom and bust share
In practice:
Another cheap recruitment company
The fortunes of recruitment companies depend on the fortunes of the economy, but OPD (OPD) looks like a boom and bust share par excellence. Founded by its current chairman and biggest shareholder, Peter Hearn, in the teeth of recession in the early 1990’s, its share price chart booms and crashes with the [...]
Dialight at the end of the tunnel
<blink>Buy me</blink>
Dialight’s chart reminds me of our politicians, huffing and puffing, but not achieving much. The price now, adjusted for splits and consolidations, is pretty much what it was back in 1994, as far back as Sharescope shows, though it’s also returned money to investors.
Judging by the numbers, Dialight is flashing a great big LED powered [...]
ASOS makes me look like an ass…
‘A’ is for acronym, and anomaly
Here’s a rarity these days, a couple of charts that go from bottom left to top right:
Yesterday, ASOS (ASC) announced it had doubled sales and and almost doubled of pre-tax profit and is looking ahead to another year of strong growth.
I cringe whenever I look at charts like ASOS, and [...]
Market warms up, bargains still abound
In practice:
‘Bounce’ still insignificant
As promised on Wednesday, from now on Monday’s a data rich day. First, off the market, and the bad news: It’s warmed up a tiny bit since I reported that the recent stock market ‘bounce’ was insignificant.
By my calculation, the long-term price earnings ratio of the stock market [...]
