Putting Recent Market Sell-off in Perspective

Source: Pixabay

Markets have been unnerved by rising interest rates in the US, with ripple effects around the world. The most staggering event has happened on the VIX market with a number of funds/ETNs making the headlines after having lost tons of money. What should investors take from these events ? A couple of reflections and interesting comments seen here and there. Continuer la lecture de « Putting Recent Market Sell-off in Perspective »

Worrying Records

Source: Pixabay

« The S&P 500 has entered the longest period since 1929 without a correction of more than 5%. » While this might entail a sigh of admiration to many investors, this kind of observation (per Goldman Sach’s report published today by their equity strategy team, entitled « Correction Detection; the risks of a drawdown within a bull market ») is a source of worry to us.

Continuer la lecture de « Worrying Records »

Things That Could Help European Stocks Break Out… Or Not – JPMorgan

JPMorgan’s equity strategist team has published a report today trying to figure out if European stocks will finally break out the glassdoor of 400 points (for Stoxx Europe 600) that they have been hitting 3 times already (2000, 2007, 2015).

They argue that this time might be the time, IF a number of conditions are successfully met. Among them, earnings recovery, operating leverage, decent (!) valuations and direction of bond yields are important factors to consider. Big swing factor are FX.

Continuer la lecture de « Things That Could Help European Stocks Break Out… Or Not – JPMorgan »

Future For Malaysia Equities Is Bright, Says Nomura

Nomura expects Malaysia equities to return 4% in 2018 and says stock picking will be of the utmost importance to outperform.

The positive view from the broker stems from a number of factors, listed in a report dated Jan 22: « 1) solid macro and consumption growth, 2) continuing foreign inflows amidst positive revisions, 3) better corporate balance sheets with dividend upside, 4) possible election rally, 5) likely net buying by local institutions, 6) Malaysia’s laggard performance vs peers, 7) key concerns on banks getting addressed, 8) an appreciation MYR. »

The brokers set a 2018 year end target of 1,900 points for KLCI index.

Continuer la lecture de « Future For Malaysia Equities Is Bright, Says Nomura »

Markets Keep Going Up. Where Are the Risks ?

Rule of thumb: the more expensive a financial asset is, the lower its prospective return. That’s simple. But sentiment and markets can become and stay irrational longer than investors can stay solvant, they say. So if you cannot predict when the markets will turn, it’s probably better to check where the risks are and monitor them the best you can. And invest with a margin of safety. Always…

Continuer la lecture de « Markets Keep Going Up. Where Are the Risks ? »

Carrefour, Bompard and the Reputation of Management vs Business

Alexandre Bompard, the young and alert new CEO of troubled French retailer Carrefour, will soon have a chance to show if he can thwart this priceless but nonetheless true observation from Warren Buffett:

« When a management team with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact. » Continuer la lecture de « Carrefour, Bompard and the Reputation of Management vs Business »

Are We on The Verge of Final Melt-Up Before the Next Krach ? Jeremy Grantham Thinks So

According to Investopedia a « melt-up » is a « A dramatic and unexpected improvement in the investment performance of an asset class driven partly by a stampede of investors who don’t want to miss out on its rise rather than by fundamental improvements in the economy. »

This is exactly what could happen to financial markets, according to veteran value investor Jeremy Grantham. Continuer la lecture de « Are We on The Verge of Final Melt-Up Before the Next Krach ? Jeremy Grantham Thinks So »

Unibail Rodamco-Westfield: 2 Views from the same Broker

Unibail Rodamco (UL) announced a friendly takeover offer for Australia-based Westfield (WFD) in a deal that values the Australian mall operator at c$25 bn (on EV basis).

Interestingly, Bank of America Merrill Lynch has analysts covering both companies. Following the transaction, the team covering UL has maintained its Buy rating while the one covering Westfield has moved to « Not Rated », arguing that « WFD is no longer trading on the basis of fundamentals. » Continuer la lecture de « Unibail Rodamco-Westfield: 2 Views from the same Broker »

Exane Issues Undeperform Note on Intu Properties But Says Hammerson Could Buy It… The Day the Deal is Announced

Hammerson announced a recommended offer for Intu Properties, the exact same day Exane BNP Paribas’s Michael Burt says « Hammerson is the most obvious acquirer for Intu » in a report date Dec 6 (at 6:18am), yet adding M&A is not an option. Continuer la lecture de « Exane Issues Undeperform Note on Intu Properties But Says Hammerson Could Buy It… The Day the Deal is Announced »

Seth Klarman on Value Investing

For those unfamiliar with Seth Klarman, he is the founder of the Baupost Group, and one of the most respected and admired value investors. I think it’s both because of his track record, his core values as an investor (patience and discipline among others) but also his humanitarian values that put him on par with Warren Buffett and Charlie Munger.

His words/remarks/interviews are very rare, so any opportunity to hear/read him is a fantastic one for investors willing to improve their process/thinking about investing/life in general.

Oil & Gas: A Primer (Sort of)

(Most of the data points/comments are extracted from a Primer published in Oct 2016 by Bank of America Merrill Lynch. Comments and financial data at the end are my own).

After a number of underperforming years, European oil & gas companies have been staging their comeback: they have cut into capex and opex to generate more cash flow or reduce debt and be able to maintain their payout/dividend payment.

The market has bearly started to notice, but oil & gas companies are leaner and in better shape to leave in a world where oil price would stand around 40-60$/barrel. Continuer la lecture de « Oil & Gas: A Primer (Sort of) »