German soccer glory was predictable – with luck

July 13, 2014

Brazil’s World Cup was first-rate entertainment, thanks to many surprising results. In finance, as in sport, forecasting is a dangerous game. But it is where the greatest value lies. The key is to draw conclusions from pertinent facts. Luck helps, too.

If only Argentine economy matched soccer success

July 13, 2014

The nation’s strong World Cup showing reflects astute management of its big fan base and valuable on-field talent. That contrasts with a 100-year record of wasting its human and natural resources. Avoiding policy own-goals could one day make Argentina an economic champion, too.

Why investors were taken in by Gowex

July 11, 2014

The scandal-hit Spanish wifi provider raised many red flags. Why were they all ignored? Because more people benefit when companies flourish, and Spain needs success stories. Gotham City, Gowex’s nemesis, did everyone a service, but its work shouldn’t have been necessary.

“Seller beware” when profiting from market calm

July 10, 2014

Volatility, gauged by indicators like VIX, is ultra-low. While it could be the calm before a storm, investors including Pimco have been selling insurance against price swings. It’s one way to make money amidst shrinking yields, but it’s also a risky bet against the unexpected.

PetSmart activists barking up the right tree

July 9, 2014

Jana Partners was joined by another big shareholder in commanding the $6.8 bln dog food retailer to roll over and sell itself. Management could throw investors a bone with a bigger buyback. The better option is a deal with Petco, the rival controlled by TPG and Leonard Green.

Shire can get more from AbbVie

July 8, 2014

The London-listed drugmaker is pondering a fresh, $51 bln unsolicited bid from its U.S. rival. AbbVie touts shareholder support and is offering a hefty 45 pct premium. Shire’s board can probably extract one more increase in return for a recommendation.

Supercharged IPO tax spoils need splitting

July 8, 2014

KKR and Silver Lake are listing web hosting outfit GoDaddy. The use of what’s called an “Up-C” structure means the company will float with big tax deductions. IPO investors and existing owners will both benefit, but other IPOs with Up-Cs have seen more dubious arrangements.

Gowex collapse leaves egg on many faces

July 7, 2014

The Spanish wifi provider has said its CEO admitted falsifying the accounts, days after short-seller Gotham City attacked the company. Gowex’s status as a poster child for Spanish entrepreneurialism means the fallout will go beyond increased risk aversion to junior listed stocks.

Beijing Motor IPO lifts bonnet on China carmakers

July 7, 2014

The automaker hopes a Hong Kong listing will help it cash in on China’s yearning for luxury vehicles. But its own marques lose money. Earnings depend on joint ventures with foreign groups like Hyundai and part-owner Daimler. It’s a reminder that China’s car market has two speeds.

Chinese internet stocks deserve their discount

July 4, 2014

Groups like Tencent and Baidu are growing faster than their U.S. counterparts, but American dotcom shares fetch a higher multiple. Corporate governance worries and legal risks are partly to blame. So are doubts about international expansion. The valuation gap is warranted.