Economic Review VI – Expansion & Value


This series is reviewing ideas gained at the Jyske Bank Global Economic Seminar in Copenhagen where I recently spoke.  The speaker after me was Jakob Griesen, a very bright lad. He is young, aggressive and is the lead portfolio manager for Jyske Invest’s Aggressive Strategy and the Jyske Invest Favorite Equities Fund which is one of the best performing global big cap funds in Europe , up 19.75% so far this year.

We live (so the scientists tell us) in an expanding universe.  The nature of this universe seems to be built on a fractal “as above so below” formula. This means that humanity’s nature should be (and is) one of expansion as well.  This means we should not be surprised that stock markets (a reflection of humanity’s activity) should be expanding increasingly as well.  This is one of my fundamental investing and business beliefs. In other words I expect shares globally to continue rising. Yet I also believe I cannot know when they will rise or fall in the short term.

Jakob’s message reinforced this belief as he outlined his investment process.

He stated right up front that he believes in active management based on the premise that equity markets are efficient in the long run but that financial markets are not effective short term due to human behavior.

Jakob then outlined trends and his activity in stock markets:

  • Cheap stocks outperform expensive stocks.
  • Stocks in companies with rising earnings outperform stocks in companies with falling earnings.
  • He prefers companies with share prices already in established up trends.
  • Stocks with high earnings and rising earnings outperform stocks with low and falling earnings.
  • He buys cheap, high quality stocks with rising earnings and increasing attention from the market.

These ideas have certainly been fortified by our Multi Currency Portfolio educational tracking. Today’s multicurrency update showed how investors can never count on short term trends.  Markets crashed last month but before investors could hardly react the same markets have almost totally recovered.  Here is an excerpt of the update I just sent our Multi Currency Educational subscribers.

“The latest review of the five multi currency portfolios we have tracked since November 1, 2006 (ten months) leaves me wondering, “should we yawn or gasp?

“A week after August 10, the gasps began, but quickly slowed to a yawn. Now a month later, if we have blinked much, nothing seems to have happened at all.”

Here is the latest word from the large publisher that we have developed a cooperative plan to offer our Multi Currency Educational Service.  “ Gary , I have sent your promo out to a designer this week…we’re eager to market ASAP.  I’m waiting to hear back from our ops crew about how best to get you the orders.”

This means that the time to subscribe at the low, existing $149 price is nearly through.  To take advantage and save during these last days simply go to http://www.garyascott.com/catalog/bldh

 

Next, Jakob Griesen outlined how he finds good investments using the Jyske Invest VAMOS approach:

  • They have developed a model that systematically scores and ranks all companies in the global stock market on a weekly basis.
  • All factors in the model and the scores are totally objective.
  • He uses only factors which have historically resulted in solid returns and factors which he believes will prove to yield good performance in the future.
  • The model adjusts for differences in accounting standards across countries.
  • All stocks are given a score on VAlue, MOmentum, and STrength, (VAMOS).  Each of these three attributes is rated ten (highest) to one (lowest.  Then shares with the best scores over five (in each attribute) are selected for further screening.

We discover how successful this model has been in tomorrow’s message. Until then good global investing.

Gary

You still have time to meet with Merri, Thomas Fischer of Jyske Bank and me at our farm where we will look at VAMOS in detail. The course is International Business & Investing Made EZ course in North Carolina , September 14-15-16, 2007. We hope to see you there. Details are at http://www.garyascott.com/nccourse/

All delegates are invited to the farm for afternoon tea on Sunday September 16. Here is our dining deck over the creek ready to serve!

Or join us and Jyske Bank at our Hotel El Meson de las Flores for International Business & Investing Made EZ in Ecuador , November 9-10 and 11. http://www.garyascott.com/catalog/IBEZec/


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