Combination of absolute and relative return
The term "value investing" means that the investor understands the value of the assets in which he invests; the investor estimates their long-term potential on the basis of the current value of the assets and not on a forecast of short-term market dynamics.
Two main approaches to value-investing:
In both cases, the market price - the price of acquisition - is lower than the fair value; in effect, the asset is acquired with the so-called margin of safety.
Long position in stocks, baskets or indices
Relative return
The market price of a share (basket, index) is below fair value.
Selling put options on stocks with strikes below market prices
Absolute return
The stock is seen as acceptable by the manager, but the stock’s price is higher or somewhat lower than the fair price; the premium on a put option with a strike significantly lower than the fair price delivers a reasonable return (of more than 6-7% annualised).
Relative return
In the case of the execution of the put and the resulting delivery of the stock, the stock enters the portfolio at a price lower than the fair value.
Selling call options on stocks with strikes at above-market prices, if the stocks are available in the portfolio (so-called covered call)
Absolute return
The premium on a call option with a strike price equal to or higher than the fair price (the level at which the managers would close the position in the stock) delivers a sensible return (of more than 6-7% annualised).
Relative return
In the case of the execution of the call (delivery of the shares), the profit on a stock that has reached its fair value is realised.
Long position in stocks, baskets or indices
Relative return
The market price of a share (basket, index) is below fair value.
Selling put options on stocks with strikes below market prices
Relative return
In the case of the execution of the put and the resulting delivery of the stock, the stock enters the portfolio at a price lower than the fair value.
Absolute return
The stock is seen as acceptable by the manager, but the stock’s price is higher or somewhat lower than the fair price; the premium on a put option with a strike significantly lower than the fair price delivers a reasonable return (of more than 6-7% annualised).
Selling call options on stocks with strikes at above-market prices, if the stocks are available in the portfolio (so-called covered call)
Relative return
In the case of the execution of the call (delivery of the shares), the profit on a stock that has reached its fair value is realised.
Absolute return
The premium on a call option with a strike price equal to or higher than the fair price (the level at which the managers would close the position in the stock) delivers a sensible return (of more than 6-7% annualised).
The sale of stock call options with strike prices higher than the market prices when the stocks are not held in the portfolio (uncovered/naked call)
Absolute return
The probability of the share price reaching the strike is low; nevertheless, the option premium delivers significantly more than 6-7% in annualised return.
Relative return
If the stock does rise above the strike price, the portfolio incurs a loss, equal to the difference between the strike price and the market price, which needs to be paid to acquire the share to deliver it (for the execution of the option). For this reason, such transactions are possible only in exceptional circumstances and on the basis of a very small allocation of resources.
Acquisitions of put options on shares, baskets or indices
Absolute return
The stock (basket, index) is traded at a level lower than the fair price; however, there are triggers (e. g. a possibility of an event) that may lead to sharp falls; the option premium is relatively cheap. As a rule, the managers would not hold such a share in the portfolio; such situations are extraordinarily rare.
Relative return
In case the trigger is activated and the share falls to a level lower than the strike price, the portfolio reduces the loss incurred from such a fall.
The sale of stock call options with strike prices higher than the market prices when the stocks are not held in the portfolio (uncovered/naked call)
Relative return
If the stock does rise above the strike price, the portfolio incurs a loss, equal to the difference between the strike price and the market price, which needs to be paid to acquire the share to deliver it (for the execution of the option). For this reason, such transactions are possible only in exceptional circumstances and on the basis of a very small allocation of resources.
Absolute return
The probability of the share price reaching the strike is low; nevertheless, the option premium delivers significantly more than 6-7% in annualised return.
Acquisitions of put options on shares, baskets or indices
Relative return
In case the trigger is activated and the share falls to a level lower than the strike price, the portfolio reduces the loss incurred from such a fall.
Absolute return
The stock (basket, index) is traded at a level lower than the fair price; however, there are triggers (e. g. a possibility of an event) that may lead to sharp falls; the option premium is relatively cheap. As a rule, the managers would not hold such a share in the portfolio; such situations are extraordinarily rare.
Elena Chirkova
28 years of experience in capital markets and corporate finance; has worked in asset management, investment banking and financial consulting; specifically, as head of capital fundraising department at the Bank of Moscow, financial advisor at the Rothschild Bank, head of corporate management department at Deloitte, vice-president of investment banking at Troika Dialog; adjunct faculty at Harvard University (USA); professor of Finance at the Higher School of Economics in Moscow. Author of numerous articles and books on economics and finance, including «The Warren Buffett Philosophy of Investment», published by McGraw-Hill Education in the US, and «How to evaluate a business by analogy”, on how to evaluate a stock on the basis of economic ratios. Read Economics at the Moscow State University; Masters in Economics from The Claremont Graduate School in California; extensive training in corporate finance and capital markets at Amsterdam Institute of Finance.
Управление на собственном счете клиента
Услуга подразумевает применение Флагманской стратегии на личном счете клиента, открытом в удобном для него банке или брокере.
Преимущества внешнего управления:
предоставление консультаций по упрощению
комплаенс-процедуры
максимальная ликвидность капитала
предоставление индивидуальных подробных отчетов от управляющих
Базовые условия
Валюта
инвестирования
Доллар США
Минимальный размер
инвестиций
5 000 000
Комиссия
за управление
1%
Комиссия
за доход
10%