A contrary middle-aged bear that is fervently looking forward to hibernation.

After 14 years employed as an investment manager, equity analyst and broker I am now free from institutional shackles. This blog contains my views on equity markets in general and searches for rewarding opportunities in stocks.



I didn’t want to put a disclaimer on this site. I was of the view that anyone stupid enough to blindly follow what I say and construe it as investment advice is probably delusional. If that hypothetical individual thought that they could sue me for poor investment advice, then I suggest that they look up the definition of Man of Straw.

This is my blog. It is about my investment journey. It is designed for two purposes only:

(i) to commit my thoughts on the markets to an area that keeps me accountable, not to you dear reader, but to myself. Thus is is a form of self-discipline.

(ii) to hopefully encourage debate on some of the market topics that I cover, so that I (not you) may learn something.


You as a reader should not think that I am advising you in any way, as I am not. I dont know you and you dont know me. You have no reason whatsoever to trust me.



2 Responses to “About John McElligott”

  1. 1 Conor Maguire January 19, 2012 at 1:22 pm

    Hi John,

    I’m a regular reader of your blog and found your recent examination of European equities very interesting, particularly in your application of the Graham & Dodd/Shiller PE methodology to European equities. Examining European equities with the Shiller PE was something I’ve actually been interested in doing myself for some time, but found some difficulty in obtaining reliable data.

    Can I ask you where you found the Index-level EPS for each Euro market? I haven’t been able to find a reliable source to date that presents index-level EPS in the same way that S&P do for the S&P 500 Additionally, I note that you referenced the Morgan Stanley, European Equity Strategy, 28 Nov 2011 by Secker, Carr, Garman & Lim – do you know if this report is publicly available online? I’ve been trying to get hold of a copy but no joy so far. I’m currently researching my own variant on the Shiller PE for Euro and US equity markets that I believe will produce some interesting observations and which I’d be happy to share with you once I’ve completed it. Anyway, if you could help me at all with the above, I’d greatly appreciate it. It’s a pleasure reading your blog, please keep up the excellent analysis!

    Kind regards,


    • 2 jmcelligott January 19, 2012 at 10:07 pm


      Thank you kindly for your comments. I had looked at many ways to get to a G&D or Schiller PE for European markets at an index level and I gave up. Instead I started an incredibly tedious, but ultimately worthwhile exercise.
      (1) I beagan at a company level for each index. I looked at the latest ten years of data directly from annual reports.
      (2) I took the last ten net profit figures for each company in the indices that I studied.
      (3) I choose net profit as opposed to EPS for the simple reason that the various rights issues held during the past decade would mean that when looking at EPS in 2006, that it was calculated in possibly a lower share count than the 2010 EPS calculation.
      (4) Because I used EPS, I used present mkt cap as opposed to share price.
      (5) There are flaws, namely it is weighted by the size of the profitability and market capitalisation.
      (6) It is trivial to equal weight it, in that it is a simple average of each individual companies PE10 ratio.
      (7) There are other flaws – what is reported as an exceptional gain (eg sale of a division) in one company maybe reported as normal earnings in another company (thinking of banks in 2009 and 10 using mkt to mkt gains on own bond holdings as profit). Where I could discern an exceptional gain I excluded it, otherwise it got included.
      (8) For prudence I included all losses whether deemed exceptional or not.

      I reported actual findings weighted by the weight of profits etc. Why. I wanted to test whether or not the apparent low valuation of European markets was overly biased by a few large financials in each individal country index.

      To my mind there are two reasons to use stock screens
      (i) to generate new ideas,
      (ii) if the same screens are run saw every quarter, then over time one builds a picture as to how attractive or unattractove the broader market or individual sectors/geographies are. To my mind a strong bull market is broad based. Whereas valuation attractiveness in the present market is not very broad based. For me that is very worthwhile information.

      The Morgan Stanley piece that you refer to is not publicly available.

      I hope that this is helpful to you.


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