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.
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.
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."
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.
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.
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.
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.
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.”