Major Market Value Update Nov. 2008

by | Nov 18, 2008 | Multi Currency Investing

Asset allocation theory suggests that economic conditions are moving towards the time when equities will be a good place to invest.


When that opportunity ripens, be sure to invest in markets that represent good value.

This is why we continually watch global market values carefully.

Here is a summary of the October to November 2008 Major Market Value Review of Michael Keppler. This month presents more changes than I have seen in years…so read carefully.

Recent Developments & Outlook

Equity markets around the world suffered their worst monthly retreat in more than 20 years.

After having given up 10.8 % in the previous month, the Morgan Stanley Capital International (MSCI) World Total Return Index (with net dividends reinvested, December 1984=100) plunged another 16.4 % in October.

Only October 1987 was worse: In that month, the developed markets equity benchmark index lost 19.6 % in local currencies.

Year-to-date (through the end of October), the MSCI World Index has lost 35.4 % in local currencies, 38.6 % in US dollars and 29.2 % in euros.

The euro lost 9.7 % versus the US dollar last month to 1.2681 (USD/EUR) and now stands 13.3 % below the 1.4620 it fetched at year-end 2007.

As in the previous month, there was no place to hide in October either: All eighteen major markets covered here declined.

Switzerland (-8.6 %), the United Kingdom (-10.6 %) and Australia (-11 %) suffered least.

Austria (-30.3 %), Belgium (-29.7 %) and Singapore (-26.3 %) performed worst.

There are no winners year-to-date either: all Major Markets declined during the first 10 months.

The best markets — again, those which lost least — were Canada (-26.7 %), Switzerland (-27.4 %) and the United Kingdom (-30 %).

Belgium (-61.1 %), Austria (-59.7 %) and Hong Kong (-53 %) came in near or at the bottom year-to-date.

All performance numbers are in local currencies, unless mentioned otherwise.

There were four changes in our performance ratings last month:

Austria, Norway and Singapore were upgraded to “Buy”.

The Netherlands was downgraded from “Buy” to “Neutral”.

The Top Value Model Portfolio holds the nine “Buy”- rated markets Austria, Belgium, France, Germany, Italy, Norway, Singapore, Spain and the United Kingdom at equal weights.

According to our analyses, these markets offer the highest expectation of long-term risk-adjusted performance.

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

Keppler’s NEUTRALLY RATED MARKETS are: Austria , Australia , Japan , Netherlands, 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 misinterpret 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 Merri, me and Peter Laub of Jyske Global Asset Management at OUR INTERNATIONAL INVESTING & BUSINESS COURSE IN ECUADOR. We review economic conditions, Ecuador real estate, my entire portfolio plus investing and business ideas for the months ahead.

Join us at a course in Cotacachi or on Ecuador’s coast this winter.

Jan. 16-21 Ecuador Spanish Course
Jan. 22-23 Imbabura Real Estate Tour
Jan. 24-27 Coastal Real Estate Tour

On our last coastal real estate tour we viewed this luxury hotel front…


and back.


Here are delegates working hard at viewing.


Plus we saw land and a next door house for sale.

Feb. 13-15 International Business & Investing Made EZ
Feb. 16-17 Imbabura Real Estate Tour

We also saw this Bahia Coco Bongo Hostal for sale (the owner says she has $110,000 in it).


Here delegates view a 15 room hotel for sale, with an asking price of $60,000.


March 8-9 Imbabura Real Estate Tour
March 10-15 Ecuador Export Expedition
March 16-19 Coastal Real Estate Tour

Plus we saw this potential Bed & breakfast. $90,000 asking.


Better still join us all year in Ecuador! See our entire schedule of 26 courses, tours, mingos and expeditions we’ll conduct in 2009.