Forex : The investment manager, a new criterion for selecting small caps
▪ The month of October has gone from pretty good way with a CAC 40 rose 2% after historic gain in September. The company results were better than expected, and further mergers and acquisitions have served to support financial markets: the CAC 40 rose 2% and our index of smaller values, ACC M & S190, took 4, 9%.
Everything seems back on track, but …
▪ Fed up of markets?
Except that the rebound in economic growth remains limited across the Atlantic. Household consumption is sluggish. The uncertainties for 2011 are strong and the visibility it is obviously reduced. But suddenly, in this context it is interesting to note that if the aversion to equities remains strong, it seems that institutional investors are beginning to reposition themselves more heavily.
And that is why the markets are rising. But with all the excesses of the 2000s have produced (Internet bubble, “1929 2.0″, crashes, bankruptcies and record bonuses), individual investors like you and me are not they just permanently shrunken.
Cut off from reality, financial markets do not they simply scare small investors? The Exchange does disgusts Does not just an investor who wants to build on its healthy economy?
▪ The value of companies is no longer only financial
I think we are at this intersection. Far from not stopping at PER and the potential for business growth, it seems that we now need something else, other securities, other values come into play
And this is a new concept – which is becoming increasingly important – could provide a response to the current search for meaning: SRI, Socially Responsible Investment.
This concept leads us us, investors and analysts to have new interpretations of the data – because the former have shown their limits.
I watched this new trend initially fairly remote, especially seeing a new marketing and embedding a way to stop feeling guilty for making money in the current context. But the more I look at the initiatives that are left and right and it does not seem trivial. The first reason is that financial markets should stop imposing their laws on the economy, notably requiring ever higher yields.
Initially reserved mainly for large values, it would seem that the average values seriously begin to SRI. Just go to the website of Mersen (ex-Carbone Lorraine) to realize that the preservation of human capital is put at the center of the group’s strategy, as well as financial items. Indeed recently, the presentation given by the human resources manager lasted the same time as the CFO! This constitutes a strong signal of change in attitudes.
I even stumbled upon a new index called the INDEX and GAIA, whose performance since inception (October 2009) is identical to that of the CAC Mid & Small 190: +11%.
That does not mean much for now, but I’m beginning to think that companies have good governance that will have an environmental conscience and put a little more human central concern may ultimately be the ones Exchange also gaining.
This was consonant with the political values that I like and that we have available, simply because their bosses are not cost-killers psychopaths. I know this may sound strange to say but this aspect seems vital now and I’m going to integrate it into my criteria.
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