The Value Perspective

The Value Perspective is an extensive resource for providing information on 'value investing' in equities. Value investing is a proven, long-term approach which focuses on exploiting swings in stockmarket sentiment, targeting companies which are valued at less than their true worth and waiting for a correction. We aim to share the thoughts, opinions and passions of five experts in this field, along with independent commentators, providing greater insight into this often poorly understood area of equity investing.

The Value Perspective News

  • One size fits all – The underlying dynamics of retail apply no matter what you sell

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    One size fits all – The underlying dynamics of retail apply no matter what you sell

    Andrew Lyddon

    30 Oct 2014

    The recent travails of Mulberry, which culminated in the UK-based luxury goods company issuing a profit warning on 14 October, led us to revisit Spot the difference, an article written by The Value Perspective back in June 2012, which compared and contrasted the attractions of the then market darling with electrical retailer Kesa, now known as Darty.

  • Morally neutral – Share buybacks are not a question of good or bad but of good or bad value

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    Morally neutral – Share buybacks are not a question of good or bad but of good or bad value

    Ian Kelly

    28 Oct 2014

    “I don’t want to know about your complicated financial engineering schemes,” harrumphed the chief executive of a large industrials business dismissively after we had suggested in a recent meeting his company might like to think about share buybacks as an alternative way of investing some of the spare cash on its balance sheet.

  • Red flag – Despite what some policymakers may imply, global debt levels are not reducing

    Red flag – Despite what some policymakers may imply, global debt levels are not reducing

    Jamie Lowry

    23 Oct 2014

    ‘Deleveraging? What deleveraging?’ may sound suspiciously like an article you would find on The Value Perspective – certainly its theme of the dangers of taking on too much debt or ‘leverage’ will be familiar enough to regular visitors – but it is in fact the title of the16th annual Geneva Report on the state of the world economy, which was published at the end of last month.

  • Meeting criteria – Why a company’s choice of AGM location could be a possible ‘sell’ signal

    Meeting criteria – Why a company’s choice of AGM location could be a possible ‘sell’ signal

    Ian Kelly

    21 Oct 2014

    Academics can grow very excited about findings that are ‘statistically significant’. Without wishing to become too bogged down in the maths, however, we would respectfully suggest that, just because something is significant in a statistical context, it does not necessarily follow it is impactful or indeed useful in the real world.

  • Holding pattern – When there are fewer attractive assets to buy, value investors buy fewer assets

    Holding pattern – When there are fewer attractive assets to buy, value investors buy fewer assets

    Kevin Murphy

    16 Oct 2014

    In one or two recent client meetings, we have been asked why the turnover of stocks being bought and sold in our portfolios has increased of late. Let’s be clear on this – it hasn’t. Taking the Recovery fund as an example, you can see from the table below that portfolio turnover this year is in line with the long-term average of about 20% – an extremely low level in the context of the broader market.

  • High and dry – There is a reason some fixed income investments are known as ‘junk’ bonds

    High and dry – There is a reason some fixed income investments are known as ‘junk’ bonds

    Andrew Lyddon

    15 Oct 2014

    When will investors realise there is a difference between a promise to pay and actually coming up with the cash? We only ask because last month provided two more shining examples of the extremes income-seeking investors are now prepared to go in their quest for yield – and about which The Value Perspective has been warning for around a year.

  • For the best – Why a value strategy should not set time limits on its investments paying off

    For the best – Why a value strategy should not set time limits on its investments paying off

    Jamie Lowry

    9 Oct 2014

    The Value Perspective is grateful to fellow-blog The Brooklyn Investor for reminding us of a passage from the excellent business book Good to great by Jim Collins. This passage concerns what Collins names the ‘Stockdale Paradox’ after Admiral James Stockdale, a US pilot who was held for eight years as a POW in the notorious ‘Hanoi Hilton’ prison camp after being shot down during the Vietnam War.

  • A matter of time – ‘Average’ is a simple word that masks a significant degree of complexity

    A matter of time – ‘Average’ is a simple word that masks a significant degree of complexity

    Kevin Murphy

    8 Oct 2014

    Our article Law of averages, which focused on the distinction between ‘time’ and ‘ensemble’ averages, provoked some interesting comments and feedback – both face-to-face and in the Twittersphere. This included a degree of scepticism over some of the maths involved in a potentially lethal game we called ‘Russian dice’ so we are going to revisit the subject with a different example.

  • Costa benefit analysis II – In value terms, Chelsea are in a different league to Manchester United

    Costa benefit analysis II – In value terms, Chelsea are in a different league to Manchester United

    Kevin Murphy

    6 Oct 2014

    “Have some clubs paid too much for their new players?” wondered a headline on the BBC website just after the football transfer window closed on 1 September. Cynics might suggest that question could be answered with a single word but, here on The Value Perspective – our value senses tingling as they always do when we see the phrase “paid too much” – we clicked on the link hoping for rather more.

  • Constant threats – When it comes to risk and investing, out of sight should not mean out of mind

    Constant threats – When it comes to risk and investing, out of sight should not mean out of mind

    Andrew Lyddon

    2 Oct 2014

    As part of its statutory objective to “protect and enhance financial stability in the UK”, the Bank of England sets out to identify risks to the country’s financial system. One of the ways it goes about this is with a twice-yearly survey of the perceptions of such risks among market participants – in other words, professional investors such as asset managers, banks, hedge funds, insurers and so forth.

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