More
than Just a Pretty Picture!
Scripophily isn’t
the name of some rare disease, but rather a specialised branch of numismatics focused
on the study and collection of old stocks and bonds. The word is derived from
the English word "scrip" which represents an ownership right and the
Greek word "philos" which means to love. At AKRO, we have adorned the walls
of our offices not with photos or paintings but with old stock and bond
certificates. Such furnishings seem particularly fitting for a mutual fund
group whose activities are focused on such investments.
Over the years,
thousands of companies have at one time or another issued share and/or bond
certificates. It is therefore possible to focus on almost any theme to start a
collection. The railway and automotive industries are particular favourites
amongst Scripophilists. Thematic collections can include anything from
corporate scandals (Enron, Global Crossing,) to erotica (Nevada brothels,
Playboy Inc., Beate Uhse). I will confess that my collection at AKRO, and at
home, is rather eclectic in nature; a mixture of the decorative and the
historically interesting. It includes some lavishly illustrated foreign
certificates issued by Louis Bleriot, Claridges Hotels, The Port of Bruges, and
Societe Paris-France S.A. The majority of the collection is however focused on
old Czech certificates.
Michael
J. Mauboussin - Head of Global Financial Strategies at Credit Suisse in New
York - holds a strong view that demonstrating investment skill by investment
managers requires persistent and predictable performance. Expectations
investing is a process for identifying attractively priced stocks by first
estimating the market’s expectations of key value drivers and then determining
the likelihood that the company can or cannot meet those expectations.
This paper is a transcript of Michael's presentation at the Equity Research and
Valuation Conference 2012 held in Philadelphia on 6–7 December 2012 in
partnership with CFA Society Philadelphia.
Excerpt from the article: „Last week, the Cleveland Fed Financial Stress Index climbed to 1.92 (measured as standard deviations from the mean); a level associated with severe financial distress, and previously observed only during the 2011 market retreat, the 2008-2009 financial crisis, and the Asian crisis of 1998. This spike has been driven by widening credit spreads and other measures of systemic market-perceived risk. In 1998, a similar spike shortly preceded the collapse of Long Term Capital Management. In 2008, the spike shortly preceded the failure of Bear Stearns and Lehman Brothers. In 2011, the spike was followed by the failure and restructuring of Greek government debt… Presently, a further 40-50% collapse in the S&P 500 over the completion of this market cycle would not represent a worst-case scenario, but rather a run-of-the-mill outcome from current valuations. That prospect is coupled with an expectation of a U.S. recession, and the likelihood that Fed easing will be wholly ineffective in preventing either….
This Tuesday we had a pleasure to host Brian Singer, CFA, the Partner and Head of Dynamic Allocation Strategies Team at William Blair & Company, L.L.C, as the key-note speaker at the CFA Society Forecasting Dinner 2016. His thought-provoking lecture with the title "The Macro Asset Allocation "Game" - Is Game Theory Overtaking Finance?"unequivocally confirmed once again that economics is a social science as he was stressing many themes and key words which are not the prime focus for the great majority of finance and investment professionals, such as complex adaptive systems, geopolitics, strategic negotiations, game theory or time-series cointegration. Based on Brian's lecture it is totally obvious that to become a successful economist, investor or financial advisor in the long-term perspective it is by no means enough to be a master of Excel spread sheets. On the contrary you must abound also with a solid background in history, geopolitics, sociology and international relations. In his short paper from March 2013 Brian summarizes the game theory framework applied within the investment process of his Dynamic Allocation Strategies (DAS) team.
Enjoy the reading and let us know your comments! We wish you a nice weekend.
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