Long Term Value


Our multi currency lessons are looking at value analysis.

I use Jyske Bank and Keppler Asset Management to assist me in spotting value trends.

The reason for this is shown in yesterday’s message at the www.garyascott.com ezine titled Multi Currency Strategy USA

Part of that message said:

Equity investors should always look for value because market timing does not work. The chart below convinced me of this fact many years ago that trying to decide when the market is going to rise or fall is not much better than playing roulette where the odds of winning are about 36 to 1.


multi-currency-ibbotson-chart

This chart reflects a 1993 study by Ibbotson and shows how from 1926 to 1993 (804 months) equities dramatically appreciated more than treasury bills. Yet if you deducted the best 30 months of equity appreciation in that 804 months the equities performed worse than treasury bills.

All the extra growth above low treasury bill rates over 67 years was earned in just 30 months. That gives us about a 1 in 27 chance of “guessing” correctly. I say “guess” because after 40 years of being involved in equity markets, I have learned that there is always something we do not know!

Plus I would be willing to bet that most of those months that had extraordinary growth came right after a period when shares performed badly…the time when investors least expected this growth.

Equity markets rarely shout, “hey I have been bad. Now I am going to catch up.”

There is further proof to be seen in the need for value in a recent German publication that interviewed Michael Keppler.

See the article here:

2008_09_02_e-fundresearch_keppler_guestcommentar

Please do not hesitate to contact Thomas Fischer at JGAM if you have an account and have questions. His email is fischer@jgam.com

If you have questions of Jyske and are not a US resident or citizen contact René Mathys at Jyske Bank mathys@jbpb.d

Please send me any other questions. I’ll give the questions priority if you add BL in the subject line. I cannot give you direct investment advice individually but can answer questions (without disclosing your identity) in these lessons.

Until next lesson, good global investing!

Gary

Join me and Thomas Fischer from Jyske Global Asset Management in North Carolina to learn more about economic trends.

International Investing and Business Made EZ North Carolina

We’ll have lunch at the farm and enjoy the leaf change.

farm colors

This is the most beautiful time of the year on the Blue Ridge.

multi-currency-meeting-in-autumn

If you do not subscribe to my free www.garyascott.com ezine you should also look at Jyske Bank’s current Strategic Economic Outlook


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