UK investors could be forgiven for feeling pretty upbeat. After a quiet performance last year, the country’s main stock market indexes are motoring along. Even at the smaller end of the market, which suffered badly in 2014, there has been a strong pick up in sentiment. The FTSE Small Cap XIT is up 12% this year and even the junior AIM All-Share is showing some decent momentum.
These kinds of conditions generally lead to increasingly noisy warnings about the risks of an imminent crash. In the States, the S&P 500 has been on a six-year bull run that has added $16.5 trillion to stocks. Some analysts are convinced that a crash is around the corner. In Japan, stock valuations are back at their late 1980s peak, although there seems to be little concern that the market is back in bubble territory.
It’s harder to say the same about China. While the country’s main Shenzhen index dipped this week, it has more or less doubled in value over the past year. According to an excellent Economist article shares on the tech-heavy Shenzhen index have an average price-earnings ratio of 64 - and that rises to 80 for some of the smaller firms. Incredible numbers of private investors are now flocking to the market - with 4 million new brokerage accounts opened during one single week in April. Other forecasts reckon that around 170,000 trading accounts are being opened every business day - more than 10 times the average last year. It makes the UK performance seem a little tame.
At Stockopedia this week, our resident small-cap value expert Paul Scott took a well earned break - but not before writing up his notes from the recent London Value Investor Conference. You can catch up with all his reports here. Alex Naamani took a close look at drugs firm Indivior as a potential spin-off success. And Roland Head’s Stock of the Week was stamp dealer Stanley Gibbons.
Elsewhere this week, we have been reading:
Michael Johnston, Dividend Reference - 19 Things That Actually Happened in 1999
Ben Carlson, A Wealth of Common Sense - To Win You Have to be Willing to Lose
Jesse Felder, The Felder Report - Why It’s So Important For A Stock Operator To ‘Know Thyself’
Patrick O’Shaughnessy, The Investor’s Field Guide…
