Gavekal Capital: To Catch A Falling Knife

Friday, March 13, 2015

To Catch A Falling Knife

From nearly every perspective, MSCI Europe Energy sector valuations look rather tempting compared to any other sector in the region:

The issue, then, becomes whether or not the decline in prices has stopped:

Our point-and-figure methodology comes in handy here, enabling us to track relative performance versus the MSCI All Country World Index for the Energy sector's constituents. With just one possible exception (Neste Oil), all of these charts would seem to indicate a high likelihood that the downtrend in European Energy stocks will remain in effect for some time to come.

Download the charts here: MSCI Europe Energy Sector Point-and-Figure Charts

About Gavekal Capital

Gavekal Capital is a US registered investment advisory firm that manages the Gavekal Knowledge Leaders Strategy. Knowledge Leaders are a group of the world’s leading innovators with deep reservoirs of intangible capital. These companies often possess competitive advantages such as strong brand, proprietary knowledge or a unique distribution mechanism. Knowledge Leaders are largely service-based and advanced manufacturing businesses, often operating globally. Gavekal Capital seeks to identify the world’s leading knowledge companies through a proprietary process that analyzes corporate knowledge investments.
We offer the Gavekal Knowledge Leaders Strategy in multiple products for global investors. For more information about our product offerings please visit http://www.gavekalcapital.com.
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