From where I stand most market analysts and our own estimates are still nowhere near current market prices. As a matter of fact the upside that exists between our price targets and markets prices is consistently above 20 per cent.
As an example; Apple’s earnings for the last 12 months was $9.38 per share. Suppose Apple does not increase earnings going forward. This still implies that investors will add $9.38 to their wealth for each share of Apple they hold. At current prices this would mean a 10 per cent increase.
This story is common across the equity markets. So unless we price-in a catastrophic scenario whereby earnings are slashed across the board, the market appears to be oversold.
Before I elaborate, let me review the principles around which I would use to construct an equity portfolio. My investment style focuses on themes that I believe will be winners in the next investment period.
My top themes in the US sphere are based on technology, retail, payment systems, entertainment. In the European region I have focused on the auto sector, pharma, technology, insurance and French banks.
I have completely avoided common favorites such as oil and gas and natural resources for...
