Unicredit rights issue watch & correlations & some research for deeply discounted rights issues

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Unicredit:

This is not really a surprise: Today, on the first day the Unicredit rights traded separately (Ticker: UCGAA), the pressure on the stock continued.

The theoretical price of the right at the start of the day would have been 1,26 EUR, currently they are trading at ~95 cents, after hitting a low of ~85 cents in the morning. With the share at 2.44 EUR (again -7%), the theoretical price should be (2.44-1.943)*2= =0.994 EUR, so there is only a slight mispricing at the moment.
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Efficient capital markets – Unicredit rights issue edition

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In any finance course, market efficiency is one of the most important parts of the curriculum. The Therory says the following:

There are three major versions of the hypothesis: “weak”, “semi-strong”, and “strong”. The weak-form EMH claims that prices on traded assets (e.g., stocks, bonds, or property) already reflect all past publicly available information. The semi-strong-form EMH claims both that prices reflect all publicly available information and that prices instantly change to reflect new public information. The strong-form EMH additionally claims that prices instantly reflect even hidden or “insider” information.

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Strategy 2012

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After the 2011 review, I wanted to quickly summarize my general strategy for 2012.

1. In general I don’t think that I am able to predict any stock market levels, fx rates or interest rates. For me, “tactical” assets allocation, which means siwtching assets classes or moving in and out of cash does not provide any systematic upside. However I believe that absolute market levels (esp. FX and interst rates) have some predictable influences on certain business models.

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WMF AG – Hidden Champion part 3 – Potential catalyst and Private Company Valuation

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After part 1 and part 2 I had concluded the following:

–> from a pure Asset perspective, the Stock seems currently fairly valued
–> from an EPV perspective, one could assume an upside of 25-43% if one assumes constant cash flows going forward based on 2010 results

So overall, the upside is there but certainly not “super exciting”, so why bother ? Maybe the reasons are to be found in what i would call more the “qualitative” angle ?
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2011 – Portfolio and Performance Review

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Performance (see also the current portpolio page)

December 2011 was the best month for the portfolio in absolute terms so far with + 4.03% against -1.62% of the Benchmark (50% Eurostoxx50, 30% Dax, 20% MDAX). For the whole year, this results in a performance of -4.1% against -13.8%. On a monthly basis, the picture looks as follows:
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