How you pay for the City

Ark_Welder

Ark_Welder wrote: »

No. It tells us the level of investor sentiment that there is towards a particular trust or sector.

...some of the time, but not always.

Personal Assets Trust rarely trades at a discount, it is usually at a small premium. What does that tell anyone about either its prospects or the abilities of the investment manager?

doughnutmachine

Ark_Welder wrote: »

...some of the time, but not always.

Personal Assets Trust rarely trades at a discount, it is usually at a small premium. What does that tell anyone about either its prospects or the abilities of the investment manager?

It suggests that PAT has managers that can add value in excess of the fees that active management entails.

But since the vast majority of investment trusts trade at a discount it suggests that most IT managements do not add value

Ark_Welder

doughnutmachine wrote: »

It suggests that PAT has managers that can add value in excess of the fees that active management entails.

But since the vast majority of investment trusts trade at a discount it suggests that most IT managements do not add value

Found a new subject to troll about instead of 'unit trusts' then...;) You will make me yawn again - honest.

BP is trading at a small premium to last reported net asset value. Presumably, that's an example of management 'adding value' too. And it's funny how some of the frequently mentioned oil and mining companies are at big discounts - just shows you're probably right with your analysis some of the time...:D

Glen_Clark

Ark_Welder wrote: »

BP is trading at a small premium to last reported net asset value.

Surprising when there is apparently no end in sight to Macondo claims.
Do you think BP is overvalued?

(seems remarkable that Motley Fool Analyst ignores net asset value ;
http://www.fool.co.uk/news/investing/2013/08/20/should-i-buy-royal-dutch-shell-plc-or-bp-plc.aspx
http://www.fool.co.uk/news/investing/2013/08/21/the-comeback-is-on-for-bp-plc.aspx )

Ark_Welder

Glen_Clark wrote: »

Surprising when there is apparently no end in sight to Macondo claims.
Do you think BP is overvalued?

(seems remarkable that Motley Fool Analyst ignores net asset value ;

Book value (net asset value) is something that is looked at more from a value-investing style with variations over the level of premium to BV that represents 'value'. So whether it gets referenced depends on the point-of-view of the individual that wrote the post/article. Whether the individual investor looks at it probably depends upon the level of research that they're prepared to do, plus their own style of investing. Of the individual companies that I hold, price to book value varies from 0.88x up to 3.45x (quick calculations from the relevant FT Financials tabs for the relevant companies). The highest is for Centrica, so yer makes yer own mind up over whether that represents 'value' or not. Value is, very much, a subjective opinion.


Regarding BP, then it is comparable to RDSA/B in PBV terms - on the FT. But looking at Digital Look is giving different values to the downside for Shell, and by quite a margin - would need to look at it further to try and see why. But in both cases, they're not companies that are of interest to me so I don't try to put a value to them for my own purposes. But for BP, in addition to the ongoing Macondo situation, there is still the involvement in Russia that should be considered.

doughnutmachine

Ark_Welder wrote: »

Found a new subject to troll about instead of 'unit trusts' then...;) You will make me yawn again - honest.

BP is trading at a small premium to last reported net asset value. Presumably, that's an example of management 'adding value' too. And it's funny how some of the frequently mentioned oil and mining companies are at big discounts - just shows you're probably right with your analysis some of the time...:D

yeah valid point, but as I understand it NAV for companies involves a lot of guesswork. For instance it's hard to value something's like intellectual property or goodwill. So I can type of see why the market price of the share is higher/ lower than the NAV.

But the NAV of an investment trust is fairly robust, it does reflect the market value of the shares the IT owns.....

well done for giving a half sensible response

Ark_Welder

doughnutmachine wrote: »

yeah valid point, but as I understand it NAV for companies involves a lot of guesswork. For instance it's hard to value something's like intellectual property or goodwill. So I can type of see why the market price of the share is higher/ lower than the NAV.

Which is where any difference between the book values based on tangible and intangible assets can come in, especially where the latter does contain a fair amount of goodwill, as recent results from Glencore demonstrate. Again, something about investing directly into individual companies that some individuals might not notice.

doughnutmachine wrote: »

But the NAV of an investment trust is fairly robust, it does reflect the market value of the shares the IT owns.....

...assuming that the IT owns shares, that is. Where it doesn't , the NAV might be a reflection of the opinions over the value of the assets held. ITs that hold physical assets such as property, for example - the price of the asset being the opinion of a valuation 'expert' rather than the price that would be realised there and then from a sale...

doughnutmachine wrote: »

well done for giving a half sensible response

Must mean I'm still half ahead then...:T

cepheus

The banks don't want your cash due to cheap money from the funding for lending scheme. However, they don't need to lend, its cheaper to be fined.

How you pay for the City Episode 4 of 4

In the final part of the series, David Grossman assesses the impact of Government interventions like Quantitative Easing and Funding for Lending. He looks at their impact on savers and pensioners and asks whether the City has disproportionately benefited from their effects.

The programme also investigates the growth of speculation on the price of commodities like oil, a practice that's been fuelled by fears of inflation as a result of QE. Has the rise in the price of consumables in recent years been driven by demand or by the effects of increased speculation? And who ultimately pays for it?

See also positive Money

Ark_Welder

The price of oil was on the increase well before QE came into being.

Let's hear it for This Is Money (for the one and only time)....




another...




Ditto other commodities, the prices of which the Chinese might have had something to do with...

But by all means, tell all those naughty retail investors that have been using ETFs to speculate on the prices of commodities to stop it now!!!