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.
18 Sep 2014
Professional and private investors alike will often and without a second thought compare trading strategies or portfolio performance against a benchmark stockmarket index but are they right to do so? To examine that question further, let’s consider the development of the S&P 500 – the broad US market index that comprises 500 large companies and is one of the world’s better-known benchmarks.
16 Sep 2014
As investors, we are in many respects living through some pretty gentle times – and those who would counter that view by pointing to the bleak news emanating from areas such as Gaza and Ukraine must at least concede that markets would have reacted a good deal more negatively to such events had this been a more volatile period in the mould of 2008, say, or even 2011.
15 Sep 2014
Consider the following excerpts taken from the national broadsheets: “The discounters are moving in at one end of the market ... and some blue-chip suppliers are discounting their premium brands. The supermarkets' middle-ranking, own-label products are looking vulnerable.”
10 Sep 2014
Income inequality is by no means a new concern but it is one that seems to have become increasingly controversial and politicised in recent years. Yet how much of this is down to the fact that, while – as we illustrated with tongue firmly in cheek in Tangled up with blue – there are many correlations to be found in the world, none has any statistical value without a causal link?’
9 Sep 2014
‘Don’t talk to strangers’ is a rule most parents drum into their children from the moment they are old enough to leave the house – and one most adults have no problem following when travelling in a bus, a train or especially a lift. If we are to believe the findings of two behavioural scientists, however, our own lives could be a lot more pleasant if we struck up conversations with random fellow passengers
2 Sep 2014
It is a fact of corporate life that company management will occasionally decide to significantly change the strategic direction of the business they run and, whenever this happens, it is a fact of investment life that sometimes you will agree the decision is in the best interests of the business and its shareholders – and sometimes you will not.
28 Aug 2014
Dan Kahan last appeared on The Value Perspective in Tale of woe, when we discussed his work on the way people’s numerical skills can be affected when they are asked questions that conflict with firmly held beliefs. The Yale Law School professor has now taken things a step further with a new paper entitled Climate science communication and the measurement problem.
27 Aug 2014
The false sense of security into which the current lack of market volatility is lulling many investors has been a recurring theme on The Value Perspective in recent months – and neither is this limited solely to stocks and bonds. As you can see from the graph below, by mid-July currency-market volatility had reached its lowest level this century and was standing at almost half its long-term average.
21 Aug 2014
Towards the start of the year, in Short notice, The Value Perspective referred to a Reuters interview in which Jim Chanos suggested the best time to be going short of markets – a practice in which he has built a reputation as a particularly skilled practitioner – is “when you feel like the village idiot and not an evil genius”.
20 Aug 2014
Let's play a game we will call ‘Russian dice’, the rules of which were invented by a physicist/economist called Ole Peters. They are pretty simple – roll a dice and, if it comes up ‘one’, I will shoot you. Do you fancy playing? It does not sound very appealing but, if you were a nihilistic mathematician, you might be tempted because – in the very strictest terms – on average you will be absolutely fine.