As doitinvest.com has said previously, a yo-yo. And again, with a very speculative twist so that we can close our mouths when we see the gains some funds will post at the end of Q4 2008.
Dow Jones was relatively stable today at around 9,300, if you can call stable remaining at a level 40% lower than the beginning of 2008 (seems like yesterday, hugh?). But in US it was election day and in the rest of the world some companies came up with positive news – Marks and Spencer increased almost 9% (but looks like Dow Jones – in a gap of potential), Societe Generale gained 6,7% and Clariant AG rallied more than 6% too after posting better-than-estimated results.
What do all these companies have in common? Well, they are not from US :). Secondly, as doitinvest has noted some blogs ago, these companies have spread the risk by investing abroad. They have a pretty decent exposure accross multiple continent markets, both in sales and production facilities. At last (but not at least), they went abroad a long time ago. And now they reap some portfolio benefits – whilst they make losses in their core OECD markets, the emerging ones continue to grow offsetting their losses.
This looks like a good strategy. Maybe some sticky-nose theoreticians (like Michael Porter) do not like when the companies diversify themselves. As Porter has said in his “Competitive Advantage” book, it is the job of the shareholders to diversify away, not of the companies. In other words, an efficient company gives the money back to the shareholders so that they do the diversification themselves.
Well, he might have a point if we would live in a perfect world. But we don’t and these companies have posted gains.