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

  • Measuring up – Are you sure your benchmark index is doing the job you think it is?

    NEW
    Measuring up – Are you sure your benchmark index is doing the job you think it is?

    Kevin Murphy

    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.

  • Storm warning – Investors must not believe the current benign times will persist indefinitely

    Storm warning – Investors must not believe the current benign times will persist indefinitely

    Ian Kelly

    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.

  • Price war déjà vu? – look beyond market panic to see a little bit of history repeating

    Price war déjà vu? – look beyond market panic to see a little bit of history repeating

    Kevin Murphy

    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.”

  • In the frame – With any search for answers, it helps if people can first agree on the question

    In the frame – With any search for answers, it helps if people can first agree on the question

    Kevin Murphy

    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?’

  • Strangers on a train – Why the concept of ‘pluralistic ignorance’ really is not bliss

    Strangers on a train – Why the concept of ‘pluralistic ignorance’ really is not bliss

    Ian Kelly

    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

  • A reach for Sky – The valuations are stacked against BSkyB's push into the rest of Europe

    A reach for Sky – The valuations are stacked against BSkyB's push into the rest of Europe

    Andrew Lyddon

    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.

  • Open, not shut, case - Extra information can be a bad thing if you do not keep an open mind

    Open, not shut, case - Extra information can be a bad thing if you do not keep an open mind

    Ian Kelly

    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.

  • Don’t look back – The retrospective nature of volatility can induce a false sense of security

    Don’t look back – The retrospective nature of volatility can induce a false sense of security

    Ian Kelly

    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.

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

    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

    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.

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