“In Europe, the relative underperformance of value [stocks] versus growth has not been as sustained since the early 1980’s. In the US, according to research by O’Shaughnessy Asset Management, investors have to go back to 1926-1941 to find a comparable period of sustained relative performance.”
That’s from Inflection Point, a blog post in which Marc Rubinstein takes a long term look at the valuation of stocks and the impact of technology on markets and the economy. The article has a lot of references.
Update: Chris Meredith of O’Shaughnessy Asset Management talked about his research on Odd Lots.
Great explanation by Johannes Borgen on Twitter:
In summary: banks are more robust than they used to be, but they have profitability issues.
To learn more about bank stocks, listen to the recent episode of Odd Lots with John Hempton.
See also this thread by Marc Rubinstein:
I also blogged about bank stocks in my 2017 post A lost decade (for bank investors).
You’ll see that the forms are pretty vague when it comes to point IV – Financial interests. Board members should name “Any financial interests holdings in companies/firms listed on a stock exchange”.
Some members have included equity funds and bonds under this item, although one could argue if that’s really required.
However, the declarations of interest do contain some remarkable info:
- German board members Sabine Lautenschlager-Peiter and Joachim Wuermeling own co-operative shares in banks. The value of these holdings is trivial.
- Ed Sibley owns some shares in Bank of Ireland. Mr. Sibley adds: “These are the remnants from a share ownership scheme from when I worked for Bank of Ireland (until 2008). They are worth less than €500, and I am in the process of getting rid of them.”
- Peter Praet owns shares of the National Bank of Belgium, one of the few publicly traded central banks.
- The spouse/partner of Vytautas Valvonis works at the Lithuanian branch of Dankse Bank.
- Several board members (Benoît Cœuré, Tom Dechaene, Yves Mersch,
Gaston Reinesch, Vitas Vasiliauskas, Claude Wampach) teach at universities (see item II – private activities). The earnings from these professorships are trivial.
- Mr. Wampach owns Turkish lira denominated bonds issued by the European Investment Bank. Let’s hope he hedged the currency risk 😉
- The financial interests of board members Margarita Delgado (Spain), Catherine Galea (Malta) and Andreas Ittner (Austria) contain only securities from their home countries.
- Constantinos Herodotou (Cyprus), Madis Müller (Estonia) and Pierre Wunsch (Belgium) have the most diversified investment portfolios – Mr. Müller even owns a gold ETF. They should teach their colleagues about the importance of diversification!
See my tweets from a couple of weeks ago. I’ll have more to say on the blog (including the potential merger/acquisition of Commerzbank) if I find the time…
Finance attracts lots of smart people. But that doesn’t mean you’ll make money from their ideas.
Here are some examples of why listening to supposedly smart analysts can be bad for your financial health:
- Peter Cauwels and Didier Sornette, researchers at ETH Zurich, declared in 2011 that Facebook was worth 15 billion dollars.
“War is Peace
Freedom is Slavery
Ignorance is Strength“
The financial news offers an endless stream of scary stories and opinions.
Should you sell your stocks because of the news?
Maybe. But probably not. Continue reading “Ignore the news”
What long-term returns can you expect to make on a portfolio of stocks? That’s a crucial question for pension funds and other investors.
There are several ways you can try to answer this question. You can look at historical returns and assume that the future will resemble the past. Continue reading “Prospective returns on equities”