New annual reports were rare in February, but next month we should witness a tsunami of reporting as companies file for the year ending December 2008.
Last week I found six companies that could be cheap (their prices are less than the average of up to nine years of earnings per share), financially strong (debt is less than equity), and that had just published reports so we can get an up-to-date view of their businesses.
Since yesterday, a report from Moody’s and a video from the BBC have unsettled me even more about Eastern Europe. Ignorance was bliss. A little information is terrifying. The truth is probably somewhere in between.
The gist of the report is that the credit crunch and collapsing oil price are costing Russian companies.
Since the point of investing in companies is to buy a share that will return us more money in the future, the risk investors face is that they might get less money back. The problem, as bankers, around the world have discovered is, we’re not very good at measuring risk.
In a note published in 27 January, James Montier, looked beyond standard statistical measures of risk to identify what could go wrong with an investment in a company.