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Figure 2 Already an Extended Bull Market: Duration Figure 3 Already an Extended Bull Market: Magnitude
Source: www.decisionpoint.com
How much would you pay for a It is noteworthy that the market is deeper value than that. So, what’s the
company that is effectively a holding only valuing this portfolio of catch? No catch, except the fact that
company of some of the top brand companies at 9x FY07 earnings and most institutional investors are
names in Asia with earnings growth 1.8x PBV. That would put the unlikely to have heard of these
of 42% and 16% in 2007 and 2008, dividend yield also at 4%. The companies, nor is it worth their while
respectively, a debt to equity ratio of management of these companies are a to risk going so far off the
20%, and generating an ROE of 24%? collection of some of the best benchmark, because their market
Throw in a healthy dividend also! If entrepreneurs that Asia can offer capitalisation is just too small for a
an analyst were to write a research today. Against average Asian market large fund to invest in.
report on this company, it might look valuations of 15x FY07 earnings and When anyone mentions frontier
something like this: EPS growth of 11%, you can’t get investing, three different types come
200
HFN Small/Micro
HFN Aggregate
150
Russell 2000
100
Percentage
50
-50
May-2001
May-2002
May-2003
May-2004
May-2005
May-2006
Jan-2001
Jan-2002
Jan-2003
Jan-2004
Jan-2005
Jan-2006
Sep-2001
Sep-2002
Sep-2003
Sep-2004
Sep-2005
Sep-2006
SmCap EM
250
SmCap Global
SmCap US
200 SmCap Europe
SmCap Japan
150
Percentage
100
50
-50
May 1, 2001
May 1, 2002
May 1, 2003
May 1, 2004
May 1, 2005
May 1, 2006
Jan 1, 2001
Jan 1, 2002
Jan 1, 2003
Jan 1, 2004
Jan 1, 2005
Jan 1, 2006
Sep 1, 2001
Sep 1, 2002
Sep 1, 2003
Sep 1, 2004
Sep 1, 2005
Sep 1, 2006
Source: Hedgefund.net, a division of Channel Capital Group Inc.
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