How the S&P 500 Destroyed Trillions in Value

Felix Salmon discusses a new study out of the IESE Business School in Madrid that discusses the value destroyed by S&P 500 component companies which issued shares at peak levels.

In the period 1991-2010, the S&P 500 destroyed value for the shareholders ($4.5 trillion). In 1991-1999 it created value ($5.1 trillion), but in 2000-2010 it destroyed $9.6 trillion. The market value of the S&P 500 was $2.8 trillion in 1991 and $11.4 trillion in 2010.

We . . .

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Value in Emerging Market Small-Caps

Mark Mobius, Vice-Chairman of Franklin Templeton Investments recently wrote the following in support of emerging market small-cap companies.

Small-cap companies in emerging markets are generally under-researched and not as established as their large-cap counterparts. Some have very short track records, not much background and little publicly accessible information, therefore presenting a higher level of perceived risk and deterring many investors. But for these very reasons, share prices of small–cap companies are less likely to reflect their true value with fewer . . .

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ITSI up 59% on 27x Avg Volume

Quick follow up on a company I reviewed two weeks ago, International Lottery & Totalizator Systems (OTC:ITSI). Yesterday was a great day for anyone that was able to get in (remember, it has extremely low volume), with the stock jumping up 59.09% on 27x average volume. Pretty impressive! Keep in mind that this company has massive volatility (likely the result of such low volume and a low share price), so an opportunity might present itself again!

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Visualizing Obama’s Proposed 2012 Budget

NYTimes has a nice visual representation of the proposed budget. Green means increases in spending, red means decreases.

BudgetGraphic

Check out the full size version here

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Use of CVRs in Pharma Deals

Last month I discussed Celegene Corp’s Contingent Value Rights (CVRs) here and here. The Wall Street Journal ran a story today that shows all of the pharmaceutical transactions in the past ten years to use CVRs:

Celgene’s 2010 purchase of Abraxis Bioscience Ligand’s 2010 purchase of Metabasis Therapeutics Ligand’s 2009 purchase of Neurogen Endo’s 2009 purchase of Indevus Pharmaceuticals Medicines Co.’s 2009 purchase of Targanta Therapeutics Ligand’s 2008 purchase of Pharmacopeia Fresenius SE’s 2008 purchase of . . .

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