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On filters, feedback and the future
Posted on March 31, 2009 by Richard Beddard
Filed Under Companies, Investing, Markets |
In practice:
Porvair fits the Thrifty 30 template
Finding the balance sheet is much easier when companies take the trouble to bookmark their electronic annual reports.
Porvair (PRV) does, thankfully, and the company fits the Thrifty 30 template. The shares are cheap, its 10 year PE ratio is nine, and it owns more than it owes (shareholders’ funds are 56% of total assets).
The company makes filtration equipment and the chairman and chief executive report healthy demand in aviation, energy and water offset by weak demand from automotive customers. Since its filtration systems are specialised and need replacing during maintenance cycles, the company doesn’t just rely on new sales.
My only connection with Porvair is a pair of 100% waterproof socks I tested last summer in the icy waters of Europe’s deepest canyon, the Grand Canyon du Verdon. They have a Porvair membrane, but sadly, Porvair disposed of the membranes business in 2003 to focus on high growth filtration.
The socks work, though.
In theory:
Pundits and professors are pronouncing the end of the cult of the equity.
Mark Hulbert reviews a paper pointing out mean reversion is not the only influence on stockmarket returns. Complacent investors expecting the future to be like the last two hundred years may be disappointed.
It sounds like the opposite of value investing. A new book, The Ivy Portfolio, says you can mimic the market mauling returns of big the US endowments (Yale, Harvard etc.) by momentum trading Exchange Traded Funds.
A bit of doom from the FT. Banks lend less, so consumers stop spending, so profits turn to losses (or smaller profits), so businesses default, so banks lose capital, so banks lend less… Do you see where this is going? It’s a feedback loop or the nasty bit in a credit cycle.
Is Freeman Dyson the anti-Lovelock? He’s also ancient, revered, and British born, but he’s debunking climate change paranoia.
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[...] (PRV) looked like a good company at a bargain price, but yesterday’s AGM statement, showed that things can always get worse, before they get better. [...]