Try India
Whenever I see the many articles discussing the risks of investing in China, like this list at Interactive Investor Blog, my immediate reaction is, why not invest in India. (more…)
Vodafone’s loss that wasn’t
According to most of the press Vodafone made a £15bn loss in the 2005/6 financial year. The largest loss ever made by a British company. In fact, it would be more accurate to say that the company made a real profit but an accounting loss. (more…)
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New site
I have decided that I should blog about investment on a separate site.
The new site is The Strategy Blog. I intend to put a fair amount of work into it – have a lot of ideas that simply do not fit into any of my other sites and it seems a shame to waste them.
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Music industry fails to get it.
Not content with the bad PR of suing customers, or the dubious ethics of sabotaging file sharing (which do have legitimate uses), the recorded music industry has excelled itself by annoying customers and reducing the value of their product simultaneously.
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Investors and changing media
I have previously written about how the media are changing, but, with most of the benefit likely to go to consumers and individual content creators, the more difficult question is how investors can profit from the change. However there are some areas likely to produce winners:
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How the media will change
I have little doubt that the media will be rapidly changed by technology (primarily the internet and mobile phones), and it is not too difficult to think up the most likely scenarios of that change, however this is a diffiult change for investors to profit from.
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Skyepharma – problems solved, price still down
Either the market is simply not prepared to be anything but negative on Skyepharma or I am missing something. The problems with Paxil continue, but Skyepharma has been shielded from the effects of this by a new agreement with Glaxosmithkline’s which gives Skyepharma the royalties on the budgeted sales until normal sales resume.
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Compass profit warning
I seem to be getting rather obsessed with strong market reactions to bad news, following my recent piece on Skyepharma with this. This time its Compass. Yesterday the price fell 5% on the back of a fairly minor profit warning.
Compass announced £24m in lower profits and extra costs, 3.7% of forecast EBIT, and with no change to cashflow expectations. (more…)
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Good stock pickers
What I am interested in is what makes a good stick picker, or an analyst who can really add value by finding the investments that outperform.
Firstly I will leave aside the obvious. A good stock picker or analyst needs to be good at financial analysis, understand the companies, sectors or economies they look at, understand valuation issues etc. There are simply too many people with these skills for them to give a stock picker an edge. What we need is the ability to consistently pick stocks that are mispriced (more…)
Closet trackers
Supposedly active fund managers often place a large chunk of the money they are managing in a few large caps, in effect ensuring that their fund’s performance can not deviate too far from the market. Brokers often do, or encourage clients, to do the same.
The reason is supposedly the control of risk, however it is interesting that what is being controlled is not the volatility of the portfolio (i.e. the risk of losing money) but the risk of under performing the market. There are plenty of ways of managing volatility directly so why choose to do it indirectly, and possibly less effectively, by tracking the market? (more…)
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