Blog

  • Aramco IPO Mirage

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    An IPO of Saudi Aramco in late 2018 at a valuation of $2 trillion (tn) has been widely trailed in the Press. We believe the Aramco IPO is unlikely to happen in 2018, if at all, for three main reasons: timing, the oil price, and valuation.

    Timing


    An IPO in the second half of 2018 is a challenging deadline. It leaves scant time to restructure the conglomerate’s myriad public interest and commercial holdings and to produce financial accounts to international standards. As a commercial...

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    Posted in BTBS Features | Investment
  • Pershing Square

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    Pershing Square Holdings has listed in London in what appears to be a move designed to garner investor support. Unusually for a major hedge fund, it is not seeking to attract wealthy family offices or university foundations; instead, it is looking to attract investment from ETF providers.


    With a market capitalisation of some $3.9bn, the closed-end fund or investment trust will become a constituent of the FTSE 250, and will therefore attract index tracking ETFs and funds. The reason for...

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  • A Closer Look at CAPE

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    Many of the value investment blogs have been complaining that the CAPE on the S&P 500 is outrageously high. Clearly, the index is no longer cheap, and when I checked two weeks ago, I was concerned to see that its median EV:sales was now above 3x. But neither am I convinced by some of the commentary on the extreme valuation of the CAPE.

    Some investors share an optimistic belief that the new administration will

    1. spark the economy into a higher growth trajectory, on the back of the...
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  • IPOs gearing up?

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    News about three IPOs this week reminded me that one of my signals of an approaching bull market climax is an increase in volume and a decrease in quality of IPOs. The three IPOs have very little in common:


    Detsky Mir is the largest toys and children’s retailer in Russia. This week, it raised $355m, valuing the company at roughly $1bn, in a rare IPO on the Moscow stock exchange. It looks like confirmation that the Russian market has turned, although the real money was made buying 12...

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  • Reward for being Smart

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    Being an investment analyst is a slightly sad existence. Locked away in a dark room, reading company accounts is not everyone's idea of fun. But it's a necessary part of the job, and occasionally, one can have some fun. The photo is a gift from the Investor Relations department of a major US company which was involved in a major transaction. They were quite embarrassed that in spite of all the careful scrutiny of the prospectus, with scores of paralegals and investment banking associates...

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  • Hedge Funds Commentary

    Dominic O'Connell kindly invited me on the Today programme this morning to give my perspective on what is happening in the world of hedge funds. We talked about why some big and long established hedge funds have seen declining AUM, have been losing money and have even been closing. I explained why some of the big macro funds might be finding it difficult to make money in a world of very low interest rates (although actually I think there have been plenty of opportunities to make money, and...

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  • Brexit Thoughts II

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    Philip Stephens column in the FT today addresses the Brexit question and the strategy of new Prime Minister, Theresa May. His conclusion is that we should take our time to invoke Article 50 and play a long game; his hope is that over time what seems politically impossible today will become achievable. I know Philip and have a considerable respect for his judgment but I disagree on one level with taking the negotiations slowly.

    Of course it is possible that we might get the best result...

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  • Open-ended Property Funds

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    I read about Standard Life's gating of its open ended property fund with some incredulity. Aviva and M&G have subsequently followed. Interestingly Aviva had a problem a little while ago when its fund manager left and it moved to a bid-offer spread for redemptions - now I can understand that when a manager leaves an equity fund or a bond fund, you might want to redeem immediately, but surely a property fund would have a little more longevity?

    I hope someone can explain why these...

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  • Brexit Thoughts 1

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    I have been moved to write what may be the first of several hopefully occasional pieces post the Brexit debacle. The impetus was an article in the FT this morning about Mark Carney, but indignation has been bubbling under for the last week. I nearly wrote in response to my old friend and former colleague Savvas Savouri who has been publishing almost daily artidles about how this is just like 1992, and sterling's exit from ERM and the subsequent UK economic and stockmarket recovery. Savvas...

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  • Microsoft buys LinkedIn

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    Microsoft buys LinkedIN

    We still have to hear the full explanation as to why Microsoft chief Satya Nadella believes that his $26bn takeover of LinkedIN will prove a good deal. But this master of inane meaningless corporate speak talked about..........

    So far, what I've learned about the LinkedIn team is how much our cultures share many of the same attributes. We both care deeply about individual and collective growth, and find deep meaning in the work we do to make a difference in...

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