I wrote a piece the other day ‘What, when and why? The portfolio manager’s dilemma’ in which I said that I don’t start the day knowing what I am going to write. Opportunity just knocks.
Whether you are an analyst or portfolio manager, you need to know when share prices are offering opportunity or risk to the portfolio.
No one can be expected to watch everything all the time, but failure to do so can cause missed opportunity for gains or at worst, harmful losses – especially in volatile markets such as the ones we operate in. Also a point I have been making lately.
The chart you can see is Diageo, which has been an unmitigated disaster as an investment as a few well known portfolio managers can attest to (allegedly.) The periodic red dots that you can see are high risk of loss signals.
Everyday Apollo generates a forward expectation of returns and we establish a probability range between the 12m upside and downside forecast limits.
As of the close last night, DGE was generating that signal. NOT a sell signal, but a signal that said Dave Lewis had better deliver on expectations. If he did, the share price and signal was correct and warranted. Good things were happening and potentially analyst upgrades would come. If not there was a risk. Today, the share price is down 10%. The evidence was there.
As the saying goes ‘forearmed is forewarned.’ The Apollo EDGE platform and signals have been providing this service to portfolio managers for 20 years. The same time it takes to make one of Diageo’s exquisite malt whiskeys.