
c0b67e63c13fc9cd3d0ce3f8c2a184da.ppt
- Количество слайдов: 14
Crisis means opportunities Mindaugas Valuckas Member of the Board Hanner AB Riga, 04/20/2012 1
It is very risky to follow experts’ forecasts 2
• Economists in most cases tend to provide inaccurate prognoses • Research shows that prognoses follow facts not vice versa as it should be 3
• The same inaccuracy is seen in analysts’ prognoses of company earnings… 4
• … and the same problem is with bond yields prognoses 5
• Not surprisingly the forecasts of stock prices follow the actual prices 6
Factors of fear and greed in investing 7
• After very successful period of 1990 -2000 USA stock market survived two big downfalls of prices • Low prices means good time to buy, but… • In 1999 -2000 (just before market crash) cash flow to stock market was 422 billion USD. While in 2001 -2002 (at the bottom) cash flow was 107 billion USD • • • In 2006 -2007 (just before market crash) cash flow to stock market was 464 billion USD. While in 2009 (at the bottom) cash flow was negative -40 billion USD 8
• • How much does an average statistical investor earn? Or how much do they lose due to fear and greed? • • During 1989 -2009 period due to inconsistent investing (fear and greed) an average statistical investor earned only 3. 2% annual return in the USA ; That is 2. 5 times less than the market average 9
What do the great investors do? 10
• Warren Buffett is called the greatest investor of all times; • Over the last 20 years he has managed to generate the return twice higher than the market averages (remember that an average statistical investor generated the return 2. 5 times lower than the market averages); • Two main strategies used by Warren Buffett: • Buy and hold for a long period of time – he virtually does not sell his investments at all; • He spends most of his money for investments when others don’t (at the bottoms of cycles) – he says “I am hungry when the others fear and I fear when the others are hungry”; 11
What about real estate in Latvia? 12
Price EUR/sqm • Apartment prices are at the level of 2004 -2005 and near the absolute bottom over the last 8 years; Fear does it’s work – the number of transactions is lowest over the last 10 years Apartments number • Transaction number of apartments in Riga Average price EUR/sqm 13
Thank you for your attention! 14
c0b67e63c13fc9cd3d0ce3f8c2a184da.ppt