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

  • Short change - How worried should you be that hedge funds appear so reluctant to short?

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    Short change - How worried should you be that hedge funds appear so reluctant to short?

    Jamie Lowry

    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”.

  • Law of averages - Investors need to distinguish between 'time' and 'ensemble' averages

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    Law of averages - Investors need to distinguish between 'time' and 'ensemble' averages

    Kevin Murphy

    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.

  • Explosive potential – How can value investors benefit from an expected boom in M&A activity?

    Explosive potential – How can value investors benefit from an expected boom in M&A activity?

    Nick Kirrage

    14 Aug 2014

    "Of course, you might think people would prefer to do M&A in an environment of low prices but it never works like that. People very rarely buy cheap – in reality, most make acquisitions when they are able to, which is normally when their profits and their cash buffers are high and people are willing to lend them money."

  • Higher education - Valuations are expensive but history shows they can grow more expensive yet

    Higher education - Valuations are expensive but history shows they can grow more expensive yet

    Andrew Lyddon

    12 Aug 2014

    US equities are, relative to most of their history, expensive. We trust this is not too controversial a statement – and certainly it should come as little surprise to regular visitors to The Value Perspective. Still, if anyone needs more convincing, we would point to the 10-year cyclically adjusted price-to-earnings ratio of the US’s S&P 500 index, as we have done several times in the past in articles such as Profits warning.

  • Tullett like it is - Structural issues are a concern but not necessarily terminal for a business

    Tullett like it is - Structural issues are a concern but not necessarily terminal for a business

    Nick Kirrage

    8 Aug 2014

    Inter-dealer broker Tullett Prebon issued its half-year results at the end of July and it would be fair to say these lived down to the market’s very low expectations. While equities tend to be bought and sold electronically, other assets are less easily traded and inter-dealer brokers help this happen by providing liquidity. In recent years, as you might imagine, this has been a very tough business to be in.

  • Short shrift – Other investors may not like short-sellers but they can learn from them

    Short shrift – Other investors may not like short-sellers but they can learn from them

    Jamie Lowry

    5 Aug 2014

    Short-sellers often come in for criticism from both the media and the wider world of finance – not least because their aim of profiting from the failure or collapse of a business rather than its success can strike many as somewhat contrary to the spirit of investment. However, as a recent coup by the colourfully named Gotham City Research illustrates, there is a lot other investors can learn from short-sellers.

  • Cat and mouse - Insurance-linked securities is yet another area where value is in short supply

    Cat and mouse - Insurance-linked securities is yet another area where value is in short supply

    Andrew Lyddon

    31 Jul 2014

    From time to time – though admittedly with what, in recent months, has felt like a good deal greater frequency – The Value Perspective likes to highlight an asset class that looks to be overpriced. This time, our attention has fallen on the relatively young and still relatively small sector that is the non-life catastrophe bond – or ‘cat bond’ – market.

  • Cynk hole - Plenty of extreme sports already exist so there is no need to make investing one

    Cynk hole - Plenty of extreme sports already exist so there is no need to make investing one

    Jamie Lowry

    29 Jul 2014

    Everybody will have their own idea as to what is and is not ‘fun’ but, even so, The Value Perspective was a little taken aback to read the following comment in a recent Financial Times article: “We are in a bubbly market, but my expectation is that most people who are buying and selling thought they were just having fun speculatively trading a promoted security.”

  • Blame game - Should investors ever reproach themselves for their advisers' errors?

    Blame game - Should investors ever reproach themselves for their advisers' errors?

    Ian Kelly & Nick Kirrage

    25 Jul 2014

    To what degree should investors ever blame themselves for the mistakes of their investment advisers? Here on The Value Perspective, we were tempted to take a few steps towards this particular ethical minefield after reading an article about one small but interesting differentiating factor between an economic downturn and a financial crisis – the practice known as ‘financial looting’.

  • Slow burn - Bad decisions taken in boom times can take a surprisingly long time to unwind

    Slow burn - Bad decisions taken in boom times can take a surprisingly long time to unwind

    Andrew Lyddon

    24 Jul 2014

    One of the things that most caught The Value Perspective’s eye about the record $9bn (£5.25bn) settlement BNP Paribas has agreed with US prosecutors in relation to allegations of sanctions violations was not the huge price-tag nor even that it all but cancels out all of 2013’s profits – effectively meaning the staff of an international bank spent the whole of last year working for the US Treasury.

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