S&P DJ is stripping another 16 resources companies out of the small resources share price index
John Robertson
PortfolioDirect
S&P DJ is stripping another 16 resources companies out of the small resources share price index. In June 2010, the index contained 99 stocks. Prior to the latest changes which will take effect on 21 March, that number was down to 64 (from a universe of nearly one thousand). Only one resource company has been added on this occasion. The S&P methodology is based on market capitalisation so that companies are effectively excluded if they underperform significantly enough. This approach was not designed for a sector as highly cyclical as resources. S&P is effectively recommending selling these latest 16 stocks because their share prices have already fallen. After their share prices have risen in the next cycle, S&P will add them back with a de facto buy recommendation for all those investors who are guided by index composition in their decision making.
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John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business strategist and investment market professional for over 30 years after starting his career as a Commonwealth Treasury economist in Canberra. Since being Australia's top-rated commodities analyst and chief economist at one of Australia' leading stockbroking firms, he has advised companies across the mining, consumer products, IT and biotech sectors on their equity market relations. He leads the firm's investment evaluation and security structuring activities on behalf of the Australian Small Scale Offerings Board (ASSOB), the world's first equity 'crowdfunding' investment platform. John Robertson discusses the interaction of mining and investment markets in his weekly 'From the Capital' column in Mining Journal.
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John Robertson
PortfolioDirect
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
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John Robertson
PortfolioDirect
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
Expertise
No areas of expertise
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