Multi Currency Major Market Analysis – Sept. 2008

by | Sep 18, 2008 | Multi Currency Investing

Multi Currency Investment Major Market Value Analysis – August to September 2008

As stock markets drop below realistic levels during the current global correction, knowing where to find the best values grows in importance.

Commodity investing grows more dangerous as investors who have lost heavily in the recent gold, oil and commodity volatility have discovered.

Equity prices have historically outperformed commodities by almost three times anyway. See more on this.

Yet no one can predict short terms moves in any type of market because day to day pricing is always driven by erratic human nature. Yet all markets are also efficient, driven by value, in the long term

This is why this course is based on the premise that the best way to create long term investment profits is in equities and the best way to invest in equities is to get good value in the shares you buy.

One portion of this filter is to keep track of global market values so we follow the analysis of our friend, Michael Keppler. Michael continually researches international major stock markets and compares their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return. He compares each major stock market’s history.

From this he develops his Good Value Major Stock Market Strategy. His analysis is rational, mathematical and does not worry about short term ups and downs.

He, in my opinion, is one of the best market statisticians in the world. Numerous very large fund managers use his analysis to manage funds such as State Street Global Advisors.

Here is a summary of Keppler’s current comments on recent developments & outlook in international major markets that covers the month of August 2008 and is issued in September.

SEPTEMBER 2008 Developments & Outlook

Global equity returns were dominated by the strong rebound of the US dollar.

After having lost more than 46 % compared with its June 2001 high of 1.18 EUR/USD to 0.6347 by the end of June 2008, the dollar turned
around and gained 1 % in July and 6 % in August to finish the month at 0.6792.

In the last 20 years, there were only five months when the US dollar appreciated by 6 % or more: March 1991 (+11.5 %), October 1992 (+9.2 %),June 1993 (+6.2 %), August 1995 (+6.4 %) and January 1997 (+6.3 %).

As of the time of writing, the US dollar has gained an additional 3.4 % versus the euro compared with its level as of the end of August.

Last month, the MSCI World Total Return Index (with net dividends reinvested gained 1.2 % in local currencies and 4.5 % euros).

However, due to the US dollar strength, MSCI World Total Return Index lost 1.4 % in US dollars.

Year-to-date (through the end of August), the MSCI World Total Return Index declined 13.4 % in local currencies, 14 % in US dollars and 14.6 % in euros.

Eleven markets out of the eighteen markets covered here advanced in August and seven markets declined.

The Netherlands (+7.3 %), Belgium (+5.7 %) and the United Kingdom (+5.1 %) performed best.

Hong Kong (-5.3 %), Singapore (-4.9 %) and Japan (-3.6 %) performed worst.

Year-to-date, only Canada (+2 %) remains in positive territory. The next best performing markets, i.e. those which lost least, were Denmark (-8.6 %) and the United Kingdom (-10.1 %).

Belgium (-29.2 %), Hong Kong (-27.3 %) and Italy (-24.2 %) came in at the bottom of the 8-month performance ranking.

All performance numbers are in local currencies unless mentioned otherwise.

There is no change in Keppler’s performance ratings this month. The Top Value Model Portfolio contains the seven national MSCI markets Belgium, France, Germany, Italy, the Netherlands, Spain and the United Kingdom at equal weights.

Keppler’s SELL CANDIDATES (Low Value) are: Austria , Canada, Denmark, Hong Kong, Singapore, Switzerland , U.S.A.

Keppler’s NEUTRALLY RATED MARKETS are: Australia , Japan , Norway , Sweden .

Remember that the overall market value is just one of many filters we should use when we review value. The seven steps we use in our reviews include

1: Are the shares traded in a good value market?
#2: Does the share trade at fair Price to Earnings and Price to Cash Flow ratios?
#3: Does the share pay a good value dividend?
#4: Do the share have a good value relative to their previous price?
#5: Does the company have rising earnings?
#6: Has the share price been rising?
#7: Is the company’s management good and is their product or service line in a wave of the future

Michael Keppler also reminds investors not to misinterperate the investment analysis implicit in the Country Selection Strategy. A country is BUY-rated based on the valuation levels reflected in the MSCI benchmark index of country. A BUY rating therefore does NOT imply that any stock in that country would be considered an attractive investment.

To invest according to the Country Selection Strategy it is necessary to
construct diversified, risk-controlled, representative country portfolios in
every BUY rated country, weighting each country approximately equally in the
overall portfolio. It is not appropriate to instruct a stockbroker to simply to select stocks in the BUY rated countries.

For more details on Keppler’s analysis, contact Roderick Cameron at 1-212-245-4304 or email



Join me with Jyske Global Asset Management to learn more about value investing.

Thomas Fischer of Jyske Bank, who was a currency trader for years, joins me this October to review our multi currency portfolio thinking for the year ahead.

To help our Multi Currency subscribers meet him and learn direct how Jyske can help, we are are dropping the price of your subscription, $249, from the course fee. The normal course fee is $749 for one or $999 for two. The fee for all Multi Currency Portfolio Course subscriber is reduced to $500 for one or $750 for two. Send me an email at to set up the discount.

Please send me any other questions. I’ll give the questions priority if you add BL in the subject line. I cannot give you direct investment advice individually but can answer questions (without disclosing your identity) in these lessons.

Better still ask you questions in person! Join me with Thomas Fischer Friday to Sunday, October 3-5.

This will not be all work-no play. We selected this weekend as the most likely to be beautiful with the autumnal leaf change. The colors are glorious.


Here delegates at a previous course chat during a coffee break.


The October course is traditionally our smallest so we time to take questions from everyone. Save $249 (the fee you paid for this online course) off the normal enrollment.

Enroll for one…only $500. Join us. Save $249 for one here

Enroll for two…only $750. Enjoy a couples discount. Save $749 for two here