Ishr E Stx 50-i Discussion Threads

[jonwig] 19/11/2011 07:40

... two excellent European fund managers speak this week.

They pointed to shares trading on low price/ earning (p/e) ratios across the region – based both on one-year earnings and earnings averaged over 10 years. They noted the relatively high yields on offer. They explained why a merger and acquisitions (M&A) boom is in the offing and how, in times of trouble, quality companies take market share from the weak.

And they pointed out that, given its unpopularity with investors, Europe is something of a contrarian's dream. Of the global investors surveyed by Bloomberg a few weeks ago, 53 per cent said they expected Europe to offer some of the world's worst investment opportunities over the next year – and money has been flowing out of the zone all year.

If you think one of the keys to successful investing is going where others won't, say the managers, it is hard to see how you might find a better bet.

That's all true. There is a reason to get into European equities simply because no one else will, as this does make them cheap (although nothing is ever so cheap that it can't get cheaper).

However, the real reason to think about buying a little is less complicated: markets are moved by money and the ECB has little choice but to make more of it. It is unlikely to do so in the near future: the German position is nothing if not intransigent. But when this crisis gets bad enough that the ECB starts doing so, European markets will soar – and they should do so regardless of whether they represent value or not.

[jonwig] 08/11/2011 12:40

Top Ten Holdings:

1 TOTAL SA ORD France 6.43%
2 SIEMENS AG-REG ORD Germany 4.87
3 SANOFI ORD France 4.73
4 TELEFONICA SA ORD Spain 4.24
5 BANCO SANTANDER SA Spain 3.61
6 BASF SE ORD Germany 3.57
7 SAP AG ORD Germany 3.15
8 ENI SPA ORD Italy 3.12
9 BAYER AG-REG ORD Germany 2.99
10 UNILEVER NV-CVA ORD Netherlands 2.93