Last week we noted that reporters were bemoaning the worst 5-day performance on the FTSE 100 for three years. This week we're seeing reports of the best week for the index in two years! With a 6% rise, some of last week's sharp losses have been recovered but it's proving to be a rocky ride for investors right now.
News and views from the web...
With the price of oil falling by nearly 50% in just six months, US investor Howard Marks used his year-end memo to clients as reminder of the folly of listening to forecasts and what the oil price may mean for value investors. He quotes a great line from economist Rudiger Dornbusch: “In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could."
On the subject of follies, John Kay penned an interesting article in the FT on why it's wise to escape the crowd when it comes to assessing value. Elsewhere, Monevator took a look at a subject that's very close to our hearts here at Stockopedia - factor investing (albeit from a fund perspective).
James Montier is one of our favourite investment strategists and anything written by him is worth a read. This month he's come up with a detailed paper titled The World's Dumbest Idea - a deconstruction of the concept of shareholder value maximization.
Bottom up...
Shares in Tesco ticked up this week, after what's been a dire year for Britain's biggest grocery chain. Sir John Templeton once suggested that it was at “points of maximum pessimism" that beaten up stocks like Tesco could be worth buying. Vitaliy Katsenelson wrote an interesting piece on why that could be the case now.
Elsewhere Richard Beddard at Interactive Investor offered up some thoughts on Titon Holdings, a company that makes window catches among other things. Titon has seen its StockRank rise from 83 to 98 since early November, mainly as a result of improving November. Subscribers can check out its Stock Report here.
Stockopedia's small-cap expert Paul Scott has been reporting on a series of profit warnings this week. It's been a tough year for investors with interests in the AIM All-Share and FTSE SmallCap indexes but there have been some big stock winners. Among them this week was…
