The Apple Is On A Roll

Anybody who doesn’t know about iPhone, iPad, or iPod? It seems the California-based company is enjoying the best time of its life, or maybe times are getting even better in the months and years to come. After good quarterly figures, the company looks as strong as never before. Where is the company today in the hit list of the most expensive enterprises in the world? Will its share price rise and reach out to the moon? Continue reading

About The Beauty Of Stock Markets

From time to time, stock markets reveal their real beauty. Not only when they are going straight up for investors being long the stock (as they do now in Jan 2012), or when they keep diving deeper and deeper for short sellers (as they may well do later in 2012 when the January euphoria will have evaporated), but also when investors take a moment of rest, and the markets are looked at from a distance, over a long time period. That’s the moment when they reveal their true inner beauty, pure elegance. Continue reading

Worried About Your Stock Portfolio? Go And Insure It

The economy is swinging back and forth; are we back in a recession, yes or no; will the weak governments now eventually default on their debt and when; will the Chinese soon pull out from funding US government debt and will they ever chip in money into the European Financial Stability Facility; will all this hurt share prices and my investment portfolio; how painful will it be; anything I can do about it? …. Such questions are floating around en masse in the big world of small investors. One answer is: Yes. Manage your risk and insure your investment portfolio. So then, how? Continue reading

Biases Part II: What Corporations Can Learn From Behavioural Finance

On Dec 19, 2011, I wrote about this topic. Here is a follow up on this matter. Our goal is to look into the toolbox of Behavioural Finance, understand the biases they talk about, carry the toolbox from its place in finance into the world of corporations and enterprises, and see what the key bits mean in that every-day context. Continue reading

What corporations can learn from behavioural finance

Behavioural finance, as a complement to traditional finance has long been trying to understand how people make decisions. This with the goal to eventually help investors improve their economic results, speak make their portfolios more efficient in the sense of modern portfolio theory (or put simply, make more money for given risk). The discipline, borrowing from psychology, has uncovered numerous biases that distort people’s decision making, typically to their detriment. Now then, there are lots of fruits to harvest from those studies, not only for professional investors and traders, but equally for the Sunday afternoon private want-to-be stock market player or the corporate citizen involved in day-to-day projects in their company. Continue reading

Making investments – what to look out for!

When investing in shares of publicly traded companies, investors (specifically private ones) can do at least the following: make a bet, ask for a hot tip of a friend, ask a financial adviser, pull a well-remembered company name out of their memory, consult an investment magazine, or do some homework and study the fundamentals of the companies. Investors beware: Even fundamentals can be highly misleading. Continue reading

Where volatility doesn’t shake up people

As mentioned in previous articles, much of the world is over-indebted, after a long period of boom and buzz. Some banks are still too highly leveraged or their capital base is thin (and vulnerable to write-downs of e.g. Greek government debt, see Dexia for a recent case). Governments are too much in debt, one or the other seems ripe for default. Continue reading

The Greek default

Much of discussion happens these days about sorting out Europe’s problems: a sovereign debt crisis, a banking sector still not fully recovered from the financial crisis, and a currency crisis. The debt crisis focuses on Greece. The fears concerning banks relate to their exposure to government bonds as from countries like Greece, Portugal, Italy, and Spain and a degree of undercapitalisation. The currency crisis is all about the future of the Euro. Continue reading

Cash from fallen angels

In times of market turbulences in the USA and in Europe, caused by uncertainties about the economy, fears of a double dip recession, concerns about sovereign debt and possible implosion of the Eurozone, equity markets are under pressure. This is partly justified because any forthcoming recession would put a dent into EBIT of corporations and likely therefore a dent into the future free cash flow of companies. On the other hand, markets are also hammered down by emotions, by the king amongst them: fear. Continue reading