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

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

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    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.

  • Weighting game – An eye on valuation can help counter the human bias to buy high and sell low

    Weighting game – An eye on valuation can help counter the human bias to buy high and sell low

    Ian Kelly

    1 Oct 2014

    It is an unfortunate fact of investment life that, even after transaction charges and other costs are taken into account, investors can end up making lower returns than the very fund in which they have placed their money. This additional drag, we should quickly add, has nothing to do with bad practice on the part of any fund managers and everything to do with bad timing on the part of many investors.

  • Night and day – UK banks are wholly different to the businesses they were before the credit crisis

    Night and day – UK banks are wholly different to the businesses they were before the credit crisis

    Kevin Murphy

    26 Sep 2014

    In Article of faith, we noted how banks are, to our minds, decent businesses even if – with the sector by some distance the cheapest in the UK market – this is not an opinion shared by too many other investors. We have been bullish on banks for a while now so what is it we see that other investors, who have either shunned the sector or perhaps dipped a toe only to quickly withdraw it, do not?

  • Stress test – The experiment that suggests stress can cause short-term changes to risk tolerance

    Stress test – The experiment that suggests stress can cause short-term changes to risk tolerance

    Jamie Lowry

    24 Sep 2014

    How much or how little risk someone is prepared to tolerate as they seek to grow their wealth is seen as one of the more fundamental considerations in investment. Implicit within this belief is the assumption that, once a person has decided where they fit on a spectrum that traditionally runs from ‘cautious’ to ‘adventurous’, this attitude to risk will remain constant unless their circumstances materially change.

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