Europe
September 25, 2011
– Comments (18)
On May 9, 2010 I recommended being overweight European equities in this post. In comment #12 of that post I gave this short list of recommendations.
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AXA (CS:FP),
Banco Santander (SAN:SM, STD),
Crédit Agricole (ACA:FP),
Deutsche Bank (DBK:GR, DB),
Erste Group Bank (EBS:AV),
ING Groep (INGA:SA, ING),
Intesa Sanpaolo (ISP:IM),
OMV (OMV:AV)
Telefónica (TEF:SM, TEF),
Telekom Austria (TKM:AV),
UniCredit (UCG:IM).
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On April 15 I wrote this in comments #43-45.
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(May 7, 2010 close -> April 14, 2011 close)
AXA (CS:FP) 11.82 EUR -> 15.42 EUR +30.46%,
Banco Santander (SAN:SM, STD) 7.71 EUR -> 8.305 EUR +7.72%,
Crédit Agricole (ACA:FP) 9.06 EUR -> 11.47 EUR +26.60%,
Deutsche Bank (DBK:GR, DB) 45.80 EUR -> 41.595 EUR -9.18%,
Erste Group Bank (EBS:AV) 28.00 EUR -> 35.63 EUR +27.25%,
ING Groep (INGA:NA, ING) 5.51 EUR -> 8.814 EUR +59.96%,
Intesa Sanpaolo (ISP:IM) 2.01 EUR -> 2.198 EUR +9.35%,
OMV (OMV:AV) 24.36 EUR -> 31.225 EUR +28.18%,
Telefónica (TEF:SM, TEF) 15.36 EUR -> 17.81 EUR +15.95%,
Telekom Austria (TKA:AV) 9.17 EUR -> 10.18 EUR +11.01%,
UniCredit (UCG:IM) 1.63 EUR -> 1.712 EUR +5.03%.
average relative difference +19.30%.
EURUSD ≈ 1.447 currently.
EURUSD was at around $1.275 at the "close of European equity trading on May 7, 2010" (see comment #30 above).
performance (May 7, 2010 close -> April 14, 2011 close) calculated in USD and exclusing dividends.
little Europe portfolio: ((1.193*1.447/1.275) - 1) * 100% ≈ 35.4%.
SPY ($111.26 -> $131.56): ≈ 18.2%.
and all 11 positions are currently (calculated in USD) in the green ...
EURO STOXX 50 Price Index (May 7, 2010 close -> April 14, 2011 close) (2500.18 -> 2917.72): ≈ 16.7%, so that little "mostly financials" portfolio beat the index slightly. oh well ...
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I really don't want to see the April 14, 2011 -> September 23, 2011 performance of that "little Europe portfolio". It is probably around -60% ...
I think it is time though to declare the next period of European equity outperformance. I think a similar portfolio (maybe leaving out the telecom stocks) will gain at least those 35.4% over the next 12 months (again calculated in USD and excluding dividends).
I think I will post a new list, or maybe several lists (Germany, Eurozone, financials, non-financials ...).
So the main message of this post is: European equity outperformance against almost any "similar group" over the next few weeks and probably over the next 12 months. As usual I do not have a particularly interesting explanation for my "forecast" ...
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