Browsing All Posts published on »December, 2010«

Why The Equity Market Still Looks Good Value

December 20, 2010


An regularly quoted measure in order to estimate whether or not the equity market represents good value is the price/earnings ratio (ie. the price of the overall stock market relative to the current year’s forecast earnings).  This makes sense given that shareholders are paying for the stream of earnings that the companies in the index […]

The Perils of Growth Investing (Part 1)

December 15, 2010


This is the first in what I expect could eventually be a long series of examples of how investing in “growth” business at high valuations can result in a serious loss of capital.  The chart below shows the share price of Betfair, a company which operates a peer-to-peer online gambling exchange.  The company sold off […]

The Systematic Debasement of Sterling by the UK Government

December 15, 2010


Conventional wisdom suggests that the spectre of inflation has been defeated by the economic policy innovations of independent central banks and inflation targeting mechanisms. Indeed, despite prices of many types of goods and services currently rising – and expected to continue rising – as discussed in a recent post, many still believe that deflation is […]

The Impending Inflationary Threat

December 6, 2010


In its latest inflation report, the Bank of England stated confidently that: Inflation is likely to stay above the 2% target throughout 2011, given the forthcoming rise in VAT and continuing increases in import prices. As the impact of those factors on inflation diminishes, inflation is likely to fall back, reflecting continuing downward pressure from […]

The Investment Case For Chime Communications

December 5, 2010


Firstly, a disclosure: Cautious Bull is a shareholder in Chime Communications plc.  Here’s the investment case that persuaded me to buy the company’s stock. Chime Communications plc is a London Stock Exchange-listed holding company for a variety of public relations agencies, including Bell Pottinger, the agency founded by Lord (Tim) Bell, who rose to fame […]