Why is valuation inverted?

On one side an investor may not insist for profit before valuing a company on or off the stock market. At the height of the boom, it was possible for a promising dot-com to make an initial public offering (IPO) of its stock and raise a substantial amount of money even though it had never made a profit or, in some cases, earned any revenue whatsoever.

The other side we may have good profit making companies dirt cheap with no buyers. Price by book is a way to measure how much is a company worth in cash. Five companies from American DOW 30 are below Price-Book ratio of 1. While Romanian market undervalues19 out of 25 BETXT companies (75%).

Market does not always undervalue stocks, it also errors on the overvaluation side and it does it cyclically. Cycle of error corrects and just like everything else the worst valuations deliver. However, only few understand this repeating error like Warren Buffet who invested $ 5 billion in the worst ranked Bank of America with a P/B 0.335, which is less than most Romanian stocks.

Our Jiseki Time cycles are seasonal patterns of strength or weakness in assets. They are derived from percentile rankings of 0 to 100. The higher the percentile more the chance for an asset to weaken and worst the ranking, better the chance for the respective asset to outperform.

Alpha is a daily strategy signal product that gives trading and investment signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. Alpha is a part of the time triads analytics developed by Orpheus Research.

Coverage Romania: Romanian stocks, Indices and currency.


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