Musings On Markets

Musings On Markets 1

In 1992, I had just completed a spreadsheet that included the common PE ratios for companies in different sectors in the United States. There was little of the product in it, but I determined that since I had developed it, I might as well discuss it. I posted that spreadsheet for students in my own class to download and managed to get available to other people who visited my website (more hopeful thinking than a genuine plan, since there were relatively few people looking for data online). Each year since, I have put into the info collection, expanding my list of data items for US companies initially, and in the last decade, adding to the collection by looking at non-US companies.

It is my first job each year and it takes in the first week of the entire year, today for the 2014 update and I just uploaded the info. While you can find them all by going to the info section on my website, I won’t bore you with the details in this post, but focus instead on the what, why and what next of data.

The “what”: It begins with fresh data! In the last three decades, we’ve witnessed a revolution in data access that we need to step back again to appreciate. In the 1980s, unless you worked well at a college or university or an investment bank or investment company, your access to data was not simply limited but often non-existent.

The first glimmers of the data trend were in the 1990s and for me, it started with Value Line offering an electronic version of the data, on a monthly basis by mail delivered on the CD. That was the basis for my first data updates and Value Line data remains my base for all of us data, more because of my familiarity with it and its own history than any special characteristics. Actually, there are directories which have richer detail, not just in terms of having more data items for US companies, but in bringing in entries in other markets.

My decision to broaden my data updates from US to global companies was brought on by my usage of Bloomberg terminals which were installed at the Stern School of Business regarding a decade back. About five years ago, I started tapping into Capital IQ, an S&P product, today that is one of the more comprehensive databases for global companies.

In addition to accounting data, it offers market data and commercial governance data on specific companies and an easy interface for screening process and downloading data. My concentrate in data evaluation is to consolidate the data into an application where it not only less overpowering but also more usable in valuation and corporate and business finance endeavors.

  1. What do you Mean by Negative Shareholder’s Equity
  2. To stay at home
  3. If a firm chose to increase its debts percentage from 20% to 40%, what’s the potential risk
  4. Provision the cloud infrastructure with Pulumi
  5. Increased network security and access control specifically for sensitive data
  6. Fluency in English
  7. Certified Banking Domain Professional by MVL Consulting

To that effect, I compute averages on key figures (profitability actions, risk measures, and financial leverage measures) across industries and physical groupings. I also use the uncooked data to place my spin on corporate finance actions (cost of capital, excessive results) for individual companies. The why: It is solely self-interest!

While I am gratified that we now have some out there who use my data in their analyses, I wish to be clear that there is very little that is altruistic about my initiatives. So, if you’re curious, here will be the reasons why I believe that the week that I spend in the beginning of each 12 months is well spent.

Anchor Angst: Behavioral economists, starting with Kahnemann and Tversky, have observed that traders and experts look for anchors, starting factors for making judgments, when making a decision. They also noted that these anchors tend to be either skewed (by an investor’s own encounters and history) or based on fiction, leading to bad decisions. So, what is a low PE percentage in today’s market or a high-revenue multiple?

Rather than make those judgments predicated on bad information, Each year and allow it informs my assessments I find it useful to go through the data. Year It really is this theme which I used for my update last, where I used one of the best books/movies, Moneyball, to illustrate the energy of data. Go global: It is easy to speak “global” but it remains true that people are most comfortable with keeping “local”.