The Great Debate UK
Shareholder confidence vs. value investing
- Brendan Wood is Chairman of Brendan Wood International, a global intelligence advisory firm. Recently, BWI published the World’s TopGun CEOs as ranked by 2500 institutional investors, which provides insight into the executives in whom shareholders feel the greatest confidence. The opinions expressed are his own. -
The Brendan Wood International’s panel of 2500 institutional investors suffered through last year’s markets believing value would somehow prevail. Those value investing “diehards” indeed died hard.
Conversely, those who correctly read the status of shareholder confidence and acted on it were spared. In short, shareholders that had lost confidence in the system abandoned their value criteria and sold good companies along with lesser ones.
As a result, “value” investors were left holding a bag full of stocks with hidden value. Sadly, the value remained undercover while the price of these stocks plummeted. Many portfolios catapulted through risk tolerance levels and took their investors’ savings along with them. Capital preservation was sacrificed in favor of the mantra “the market always comes back.”
The rights road to Rio
– Neil Collins is a Reuters columnist. The views expressed are his own –
Shareholders in Rio Tinto would very much like to buy a bond yielding 9 percent, convertible into ordinary shares at $45, a tiny premium to today’s price of 29.30 pounds.
Unfortunately, if their board gets its way, they won’t get the chance, since the bonds are all being bought by the state-owned Aluminium Corporation of China (Chinalco).
