November 28, 2017

How do you like them Apples!

Mark Causer

POST SUMMARY

For those movie buffs, you might recall the line from Matt Damon’s character in the movie Good Will Hunting after he secures the phone number of a young lady in a bar;

“Do you like apples? Well, I got her number. How do you like them apples?”

This line springs to mind when we take a look at the recent performance of several listed global companies (some of which you own in your portfolios), returns have been eye watering!

This is simply another reason to ensure that underlying valuations of the investments and/or fund managers we recommend to you are always questioned, prices are challenged, based on the available information. 

For those movie buffs, you might recall the line from Matt Damon’s character in the movie Good Will Hunting after he secures the phone number of a young lady in a bar;

“Do you like apples? Well, I got her number. How do you like them apples?”

This line springs to mind when we take a look at the recent performance of several listed global companies (some of which you own in your portfolios), returns have been eye watering!

This is simply another reason to ensure that underlying valuations of the investments and/or fund managers we recommend to you are always questioned, prices are challenged, based on the available information. 

Here are a few to ponder:

  • Apple shares are up 12% in only 1 month. This addition to the share price is the equivalent of investment giant Goldman Sachs’ entire market capitalisation.
  • Alphabet shares (the Google search engine) are up 25% since mid-May. The dollar value is US$145 billion. By comparison, powerhouse General Electric’s entire market capitalisation is US$155 billion.
  • Microsoft shares are up 13% in 2 months or US$74 billion. This is half of the entire value of the Vietnam stock market. 
  • Amazon shares are up 19% in 1 month (or 19 trading days). This is equivalent to Rio Tinto’s entire market capitalisation.
  • Facebook’s share price is up 20% since the start of July. This expansion of their market capitalisation is equal to Diageo’s market capitalisation of US$86 billion. Diageo is the world’s largest producer of spirits and a key producer of beer (Guinness, Smirnoff, Johnny Walker, Baileys to name just a few).
  • Tencent shares (Chinese IT service provider) are up 22% so far this month (17 trading days). This is equal to the entire equity market capitalisation of Softbank (a Japanese Telecommunications Company and a very large shareholder of Alibaba).
  • On that note, Alibaba shares are up 55% since the start of June (US$173bn). This is equal to either the market capitalisation of Unilever or PepsiCo – both worldwide brands. 
  • Investment bank JP Morgan is up 20% since the start of June. This increase in six months is pretty much equal to our own NAB’s market capitalisation of US$60 billion. 
  • Last but my no means least, Samsung Electric is up 20% since the start of September. This is equal to either the market capitalisation of Nintendo or Fanuc (a global Japanese robotics company).

How do you like them apples?

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