Analysis of pricing of company earnings
In this 5 minute TED talk, psychologist Dan Ariely ruminates on the way that conflicts of interest encroach on even the best of intentions. It’s an issue that is endemic to the world of finance - and an area where communication technologies can assist. Let me explain by first referencing a simplistic model of how the [...]
Every quarter we run our state of the art filter over the industry sectors that trade on the ASX. It relies pretty heavily on the art part, but anyway the objective is to contrast valuations with earnings expectations to get a sense of where the sectoral opportunities might lie. The following chart summarises the results: [...]
And to place the previous post in context, every six months or so, we step back to have a really long term look at the Australian equities market. From the market low in 1884, the market added around 5% per annum – the blue line above illustrates what straight line growth of 5.2% per annum [...]
Reflecting on the following chart via Pragmatic Capitalism (here) – got to thinking about how the same might apply to Australia: So herewith is the log chart of the All Ordinaries price history since 1875: Now you might argue about the choice of market cycles – I admit to liking the symmetry of ~27 year [...]
Sometime back we suggested that the PE ratio for the equities market was likely to fall relative to recent decades. Based on some spurious pointing at historical charts, we came up with an expectation that the average PE ratio might be more like 12x (see here). On our numbers that suggested ‘fair value’ was around [...]
I’d like to be able to clone the Humble Student of the Market’s ability to see the market for what it is. His latest thoughts on going long the Australian market against the Canadian are well worth a read (you will find it here). It’s an incestuous world we live in these days, so in [...]
I started this post some months ago with the intention of digging deeper into our Australian banks reliance on the international capital markets. In particular wanted to get an understanding of what the impact of the government guarantee funding facility would be. I’ve been dragging my feet, so in an effort to get it out [...]
Another chart for the annals – this one from Sitka Pacific Capital Management (see the original article here).
Following from the previous post (here) that suggested that ‘fair value’ for the All Ordinaries is around 4250 – just to clarify, I’m using the term ‘fair value’ as an indicator of where I’d be willing to overweight equities. Not sure how this compares to a forecast from a broker calling for 5500 for the [...]
I like it when someone makes it easy – thanks to the Big Picture (here) – I’m just printing it here to make it easy for me to find later:
older posts »
