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 [...]
Wobble or world’s end?
Investors are worried about a credit crunch threatening to choke off investment and precipitate the end of the take-over fuelled bull market. It may not be that serious, yet.
Judging by the bounce in the ‘footsie’ this morning yesterday’s sell-off was not the beginning of the end, although extrapolating long-term trends from short-time price movements is, [...]
Supply and demand 60 years on…
Ultimately supply and demand moves share prices, and it’s always been that way.
This is true of private equity buyouts now. It’s one of the factors driving the market upwards:
…a positive reinvestment effect occurs when companies are taken over for cash or near cash and the proceeds are reinvested. This affect may apply to the market [...]
DNA of a superinvestor
Occasionally a cult forms around an investor. In the case of Mohnish Pabrai, it’s a sub-cult of the mother of all investment cults.
Whilst searching Amazon for classic value investing texts, Eddie Bravo of Vale tudo investing blog, discovered that two ‘must-read’ books, both out of print, were selling for considerable sums. Seth Klarman’s ‘Margin of [...]
Experts with the ‘X’ factor
Most, but not all, pundits are wrong, most of the time. Here’s how to spot the experts who’ve got talent…
Robin Soole, a reader of this blog, is unimpressed by financial journalism. In the following quote he added his own merciless annotations to a reply from an editor advising a reader after one of his magazine’s [...]
Taking the market’s temperature
Rising bond yields are a bad omen for the stockmarket. But we’re not doomed yet.
Rising bond yields last week provoked another bout of paranoid punditry this week for the very good reason that the bull market in shares is fuelled in part by cheap debt. Suddenly private equity deals, takeovers and share buy backs look [...]
Make way for the megacap boom
The dog-days of this bull market will be marked by a megacap boom, says Alphaville, quoting the Lex column. Here’s the logic:
The worlds 120 largest companies are 15% cheaper than the next 1,000. It didn’t used to be that way.
Big public companies have 40% less debt than their smaller peers.
If profitability declines, they’re less risky.
If [...]
Falling house prices wouldn’t trouble stockmarket
As regular readers of this blog will know, we’ve been discussing the timing of the end of this bull market. People fear it’s imminent, but the fundamentals are more reassuring.
Judging by comments like this one from Stuart, a property crash is the catalyst we fear most:
It is curious that neither Richard nor Robin [a regular [...]
Inside Zimbabwe
Just a quickie. An old post about the Zimbabwean stock exchange, and a new perspective from inside Zimbabwe.
The sixty year bull market
Here it is. As promised. The latest update of the most beautiful chart in my burgeoning chart library, provided courtesy of Scottish Widows (UK Financial History 1945-2006).
It shows the value of £100 indexed from 1945.
Invested in equities with dividends reinvested it would have been worth £125,243 by 2006.
Investing in equities without reinvesting dividends would have [...]
