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

By Ian Kelly 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 … Read More

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

By Kevin Murphy 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 … Read More

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

By Kevin Murphy “An imbalance between rich and poor is the oldest and most fatal ailment of all republics.” Plutarch (45-120AD) As the above quote shows, income inequality is by no means a new concern but it is one that … Read More

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

By Ian Kelly In their recent paper Mistakenly seeking solitude, Nicholas Epley and Juliana Schroeder of the University of Chicago describe an experiment in which, one morning, they recruited 118 commuters at a suburban railway station and randomly divided them into … Read More

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

By Andrew Lyddon 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 … Read More

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

By Ian Kelly 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. … Read More

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

By Ian Kelly 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 … Read More

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

by Jamie Lowry 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 … Read More

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Law of averages – Investors need to distinguish between ‘time’ and ‘ensemble’ averages

By Kevin Murphy 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 … Read More

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Explosive potential – How can value investors benefit from an expected boom in M&A activity?

By Nick Kirrage “Of course, you might think people would prefer to do M&A in an environment of low prices but it never works like that. People very rarely buy cheap – in reality, most make acquisitions when they are … Read More

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