October Book Review
"When Markets Collide: Investment Strategies
for the Age of Global Economic Change"
By Mohamed A. El-Erian, McGraw Hill, 2008
A brilliantly prescient overview of the global economic and financial world without technical geekiness and numbing charts. Mr. El-Erian, as well qualified on this topic as any, provides a very readable explanation of where we are today and a very credible view of where we are heading.
Unicorn Rating: 5 out of 5
Unicorn Equity Analysts is a small cadre of like minded independent stock investors applying their collective skill, wit, wisdom and humor to provide valuation analysis on common stocks of public American companies. We publish monthly “Tip of the Unicorn”, a newsletter containing valuations of companies requested by our subscribers and available only to our subscribers.
Our approach is founded on the Peter Lynch concept that the best future returns in the market are found in average American cities, selling coffee, collecting garbage and plying the business of America to average Americans. We believe that great wealth comes through hard work and there is no greater source of wealth generation than the stock market {Editors Note: this has become an odd point of view as of September, 2008 but one we’ll hold to anyway, pending the cessation of wailing from teeming hoards of irate investors tearing down the walls of Wall Street}.
Our subscribers are Americans (mostly) from across the country who see the widget makers, sewer cleanings, road pavers and other unwashed masses that actually produce economic value. When a subscriber requests a valuation on a firm they see around, UEA performs a traditional valuation based on the company financials (first and foremost), mingles in research about the sector, industry and macroeconomic position of the country then vets that stew internally to arrive at a conclusion about whether the company is over-valued (share price is too high compared to intrinsic value), under-valued (intrinsic value is higher than the share price), or fairly valued.
UEA holds the quaint idea that common stock prices should be somehow tied to a realistic expectation of future returns of the company. Our analysis methodology draws from the masters – Graham and Dodd’s Security Analysis – and assumes our subscribers are long term investors interested in long term return. We believe good companies make money by making and providing a good or service that has actual value to consumers and we, as analysts and investors, must be able to 1) understand the product or service of the company and 2) understand how the company expects to make profit from that product or service.
UEA are Wiki enthusiasts – pooling information seen through the eyes of many and sharing it back for individual decision making. It is well proven that collective intelligence is vastly greater than individual intelligence so we created this vehicle as a means for independent retail investors to see what others are seeing around the country and to benefit according to their individual views.
What our subscribers choose to do with that thinking, if anything, is their business, not ours.