News Analysis
• M&S
• 2010
• Does news
matter
• Is it science
Case
Fundamental
• Alchemy or;
• Child’s play?
Technical Analysis
Analysis
• Data or
• Dialogue?
• But then
what?
Behavioural
Managed?
• How to lose
money
£150,000,000,000
Enough to fund
20million HE students
£130,000,000,000
£110,000,000,000
£90,000,000,000
£1,790,000,000,000
£70,000,000,000
£50,000,000,000
£30,000,000,000
£10,000,000,000
-£10,000,000,000
News Analysis
Marks & Spencer Group PLC
30 July 2010
The Company's capital consists of 1,582,902,704 ordinary shares with voting rights.
Therefore, the total number of voting rights in the Company is 1,582,902,704.
Up 0.51%
31 August 2010
The Company's capital consists of 1,582,917,001 ordinary shares with voting rights.
Therefore, the total number of voting rights in the Company is 1,582,917,001.
Up 4.16%
01 November 2010
The Company's capital consists of 1,583,507,776 ordinary shares with voting rights.
Therefore, the total number of voting rights in the Company is 1,583,507,776.
Down 1.91%
http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/exchangeinsight/news-analysis.html?fourWayKey=GB0031274896GBGBXSET1
M&S finds favour as Footsie volumes slow for Christmas
Financial Times December 16th 2010
“M&S seems to have the
strongest momentum among
the majors, with industry data
still supportive,” said analyst
Andrew Hughes.
He estimated M&S to show
“scarily good” same-store sales
growth of 4 per cent for
general merchandise and 3 per
cent for food. By comparison,
sales at Next and Argos stores
may fall by 4.5 per cent and 6
per cent respectively, he
forecast.
December 16 2010
M&S finds favour as Footsie volumes slow for Christmas
Financial Times December 16th 2010
Technical Analysis
•
•
•
•
•
•
Last year, United lost at
home only twice: to Chelsea
Settlement as of 24/12/2010, at 5:45 p.m.
and to Aston Villa. That loss
Marks & Sp. fractionally up, achieving a modest profit of +0.43%. The day started well for the stock,
to peaks
Villa was
this
very
which approached the previous session's
with aduring
first price of
376.2,
and
stayed on a plateau during the entire session. The weekly analysis of the security and the FTSE 100
of fixtures a year
shows Marks & Sp. losing relative strength against theweekend
index.
Status and Trend Analysis
ago
While the medium-term scenario still looks bearish, the short-term structure shows some
promising signs, with support at 372 holding strong. The positive movement in the short
term indicates a potential reversal of the bearish trend, with the possibility of prices flirting
with the key resistance level of 378. Thus there is a good chance of the bullish phase
continuing towards the 384 level.
Risk Analysis
The security's level of risk is currently under control, with daily volatility at 1.641, whilst
daily volume remains high, having risen above the 1-month volume moving average in the last
session. Marks & Sp.'s stable movement suggests that institutional investors have an interest in the
security, to the extent that they can exert a high degree of control over its trend, which appears
orderly and without strong fluctuations.
DOW v FTSE
r=0.96
12000
11500
DOW
11000
10500
10000
9500
9000
4700
5200
5700
6200
FTSE
data from yahoo.finance
Fundamental Analysis
M&S Performance
130
120
110
100
90
80
70
60
2007
2008
Revenue
2009
PAT
EPS
2010
Conditions
are 'right'
Buy and hold
in the short run, the
market is a voting
machine, not a
weighing machine
Growth stocks
‘Quants’
"being greedy when
other people are fearful
and fearful when other
people are greedy."
value investing
>
If you spend more than 13
minutes analyzing
economic and market
forecasts, you've wasted 10
minutes
Peter Lynch
15%
Cash flow
•Sales volume
•Retail price
•Inflation
•Interest
•Exchange rates
•Costs
•Inflation
•Interest
•exchange
•Exchange rates
Dn  Pn
D1
D2
P0 

 ... 
1
2
(1  i ) (1  i )
(1  i ) n
WACC
Cost of equity
Beta
Market return
Risk free return
Dividend
Share price
Cost of debt
Behavioural
Heuristics applied to surfing
• Rule of 72. divide the number 72 by whatever yield you are
getting to see how long it would take for your investment to
double.
• “120 Minus Your Age” Rule. That is your percentage of stock
allocation.
• The Long Term Inflation Average Is 4%
• Very Few Years Are “Average”.
• You Need 20x Your Gross Annual Income to Retire.
• Save and Invest 10% of Your Pre-Tax Income.
• 10, 5, 3 Rule. You can expect a nominal return of 10% from
equities, 5% return from bonds and 3% return on highly liquid
cash
• Required Return. Required return = risk free rate + beta (historical
market return – risk free rate).
http://etfdb.com/2009/top-10-investing-rules-of-thumb/
Stereotypes and anecdotes
mis-pricings and return anomalies
http://funds.ft.com/UKUnitTrustsandOEICS/Act
iveManaged
http://www.londonstockexchan
ge.com/exchange/prices-andmarkets/stocks/indices/summar
y/summary-indiceschart.html?index=UKX
Same
Different
http://www.msnbc.msn.com/id/13560741/ns/technology_and_science-science/
1-ten-2
2-ten-4
3-ten-6