Komentarai Siųsti draugui Spausdinti Vertinimas Neįvertintas

Dovre Insight: The biggest market inefficiencies

Spekuliantai.lt | 2012-04-30 | Spekuliantai.lt apžvalgos | perskaitė: 1124
Raktiniai žodžiai: Rinkos
Dovre Insight: The biggest market inefficiencies Dovre Insight: The biggest market inefficiencies

 A manager's worst nightmare is to be wrong and be alone. This leads to the a herd mentality and helps to enhance the ups and downs in the stock market.

Actually, the exchange should not fluctuate as much. Although the results of the listed companies vary considerably from year to year due to the economic cycle, it evens out in the long run. In the long term, the earnings level in a busineses is remarkably stable and closely correlated with gross domestic product.
According to the textbook the economic value of a company equals the present value of the future free cash flows. For a typical listed company valued below 15 percent of present value of profits generated in the first five years, would mean earnings this year and the next and there would be almost nothing left of the company value.

Contrary to the textbook

In practice, it is quite the opposite. Share prices follow the short-term cyclical fluctuations. This causes the stock market to go down far below its fundamental equilibrium level in bad times and become strongly overpriced during the good times.
A typical business cycle lasts around five years. Three or four of those years are often characterized by optimism and stock market rallies before a real downturn comes that lasts for a year or two.
The correlation between the stokcs and the business cycle is probably the greatest of all market inefficiencies and is probably due to herd mentality among portfolio managers and other professional market participants. If one misses on the stock exchange, it is best to be a part of the herd and not alone. If you are alone, there is great risk to loose your customers and your job.
For smart and patient players this phenomenon can be exploited to extract significant excess returns over time.

Exchange's cheapest

This week we include Bonheur into the portfolio. Bonheur is an investment company in which two-thirds of the value represented by Fred. Olsen Energy shares, while the remainder are mainly investments in wind farms as well as special vessels for transportation of offshore wind turbines.
We see three reasons to buy the stock. First, the NAV discount is at historically high 55 percent. This makes Bonheur with Ganger Rolv the exchange's cheapest investment companies. Secondly, the company has historicaly paid dividends. This spring it is likely to be five dollars per share. Finally, the upside is remarkable if there is anything structural.
A chart often says more than words. As shown in the chart below, the Bonheur share price is at three-year low, while Fred. Olsen Energy is close to three-year high. The spread has never been higher except for a few days in October 2008. Need we say more?

Dovre Portfolio

· Intex Resources
· Sevan Marine
· Savings Bank 1 SMN
· Funcom
· Wilh. Wilhelmsen
· Bonheur

In: Bonheur
Out: Sparebank 1 Northern Norway

 

 

Taip pat skaitykite

Vakar dienos JAV akcijų biržos sesija privertė sunerimti

Kokiomis nuotaikomis rinkos gyvens šią savaitę?

Kodėl dabar krenta aukso kaina?

Eilinė prognozė – rimtos korekcijos sulauksime jau greitai. Ar išsipildys?

2017-03-22 | Spekuliantai.lt apžvalgos 2017-03-20 | Spekuliantai.lt apžvalgos 2017-03-08 | Spekuliantai.lt apžvalgos 2017-03-06 | Spekuliantai.lt apžvalgos

Komentarai



Ekonominis kalendorius

Prekybos statistika realiu laiku

Techninės analizės įrankis

Privatumo politika Reklama Kontaktai Paskolos RSS RSS
© 2006-2024 UAB All Media Digital