Category Archives: Investing

Human frailty

By Nick Kirrage. Even professional investors are human and that can be exploited Regular visitors to The Value Perspective will know our preferred measure of valuation for a business is the Graham & Dodd price/earnings (P/E) ratio, which uses a … Read More

Posted in Behavioural finance, Investing, Value Investing | Leave a comment

Crowdfunding – same wine different bottle?

We had an article recently about crowdfunding. It made me think about the whole area of investment, in terms of social media, globalisation (link to Globalisation the world turned upside down), etc. Imagine, if you will, to 18th Century London. … Read More

Posted in Community, Investing | 1 Comment

Reports of the death of SRI have been greatly exaggerated!

Since the launch of the first dedicated ethical retail fund in the UK back in 1983, the amount of assets allocated to this sector has continued to grow – year on year figures published by EIRIS show the sector has … Read More

Posted in Investing, SRI | Leave a comment

Rehypothecation should be banned – or at least capped

Hypothecation occurs when assets are used as collateral against a loan. The asset is the insurance the lender has if the debtor defaults on repayment, in such an event the asset can be seized by the lender to cover the … Read More

Posted in Financial crisis, Investing | 16 Comments

The Investment Currency Mechanism, the UK and the Financial Transaction Tax

When investments are made the currency the purchased asset is held in has to be bought by the investor, as it is the desired medium of exchange the seller has requested. Buying into a currency to invest in an asset … Read More

Posted in Investing, Regulation, Tax | 12 Comments

Investor risk appetite reviving but still subdued

World equities are up by 14% in US dollar terms from their early October low but Credit Suisse’s global risk appetite measure has only just exited “panic” territory – see first chart. On this measure, at least, “risky” assets are … Read More

Posted in Investing, Risk | Leave a comment

Reverting to type – many aspects of investment eventually move back to their long-term average

By Nick Kirrage. I recently saw the chart below, which shows US residential construction as a share of gross domestic product to be at post-war lows. That had some resonance for me simply because there was an echo of a … Read More

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The third dimension – valuation is the dominant driver of investment returns at a company level

By Kevin Murphy. The total return made on any equity investment can only come from three sources: from a company’s dividends from a change in its share price, which stems from a change in its earnings per share (EPS) from … Read More

Posted in Dividends, Income, Investing, Share Price | Leave a comment

We’re no angels (nor are we devils) – Why we do the things we do

In response to my article about motivation systems, Ray Fletcher posted an interesting (and flattering, thanks Ray!) response that included a fascinating link. It’s a Wall Street Journal piece by Al Gore and David Blood. They list five actions that, … Read More

Posted in Behavioural finance, Confidence, Investing | Leave a comment

Fear of the new – there are a number of reasons IPOs should be approached with caution

By Kevin Murphy. A distinctive feature of investors’ recent fondness for social networking sites and other technology-oriented stocks, which some commentators have dubbed ‘Tech Bubble 2.0′, is the way many share prices have rocketed up in price on the first … Read More

Posted in Investing, IPO | Leave a comment
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