Cheap Financials

The FT has an article about how cheap financial shares are at the moment. Which reminded me about Ariel Funds recent letter to investors, in which they outline why UBS is a good investment.

Ariel Funds estimates UBS’ intrinsic value to be US$94 compared to their purchase price of US$60 and today’s price of US$52.

You can check out more of John Roger’s (founder of Ariel Funds) current investments on Gurufocus.

Investment Tools

Here are a few investment tools I came across from Top 5 Hacks for Intelligent Investors and Valuation Tools from Financial Times from FatPitchFinancials.

Excel Add-In

This Excel Add-In lets you take financial data from Yahoo Finance, Google Finance, MorningStar, Reuters etc straight into Excel. For example you want the market cap of MSFT from Yahoo Finance in your Excel spreadsheet. Just install the add-in and use the formula “=RCHGetElementNumber(”MSFT”, 941)”. Quote from the orginal post.

You can turbo charge you stock financial spreadsheets using an excellent and free Excel Stock Market Functions Add-in. You can download this great tool that lets you add data from MSN, Yahoo, Google, Reuters, ADVFN, Morningstar, and more directly into your Excel spreadsheet cells by joining the smf_addin group.

Note to download the add-in you have to join the associated Yahoo Group.

FT – DCF model

The Lex column from the Financial Times has an online DCF calculator / model. This is good for people that don’t want to build a model in Excel and are happy to plug in a few high level assumptions to generate a valuation.

Playing In The Currency Markets With A Peashooter

Here are some links about the RBNZ’s intervention in the currency markets. I especially like the comparison of RBNZ’s efforts and that of a peashooter made by The Economist.

Economist - A warning shot

CONFRONTED by a growing army of speculators, on June 11th the Reserve Bank of New Zealand decided enough was enough—and let rip with the peashooter.

 

Most nations with strong currencies should refrain from following its lead. After all, peashooters are of little use against a determined foe.

But The Lex Column (subscription required) in the Financial Times makes the point that currency intervention is meant to work in one of three ways.

1. Directly affecting the supply and demand of the currency.
2. Hinting at future monetary policy.
3. Signaling that the currency is out of whack.

The column rightly points out that only the last two have any real chance of working. If the RBNZ is determined to defend the currency at a specific level then there are “players” in the foreign exchange market with far deeper pocket than the RBNZ. But this YahooXtra article states the RBNZ will not attempt to defend a particular level for the kiwi.

If the “exchange rate is exceptional and unjustified in terms of the economic fundamentals” to borrow the words of Allan Bollard then as the Lex Column says, it may turn out to be a good punt by the RBNZ.

Other coverage:

• Article about the first intervention from the Financial Times: New Zealand raises spectre of intervention.
• Bloomberg article about the second intervention.