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Saturday, July 25, 2009

Country Value Rankings -- China Remains #1

Below is a the Covered Calls Advisor's current 'Country Value Rankings' table. This table provides a value-oriented perspective that assists this advisor make objective decisions regarding overweighting and underweighting specific countries and regions in the Covered Calls Advisor's portfolio. A comprehensive approach to asset allocation goes beyond diversification solely by asset classes (i.e. stocks, bonds, real estate, commodities, etc.); it should also include diversification by global geography. Behavioral finance research has clearly identified the profound tendency of most investors to succumb to "home-country bias". Also in this regard, John Templeton was a leader in advocating the importance of developing a global-oriented value investing perspective to aid us in achieving investing outperformance.

Note: For expanded view, left click on this spreadsheet

The Country Value Rankings table above is based on a weighted-average ranking system. You will notice that there are eight categories (and one factor for each category) used in the analysis of each country as follows:

The next-to-last column on the Country Value Rankings spreadsheet shows the Weighted Average Summation Total for each country. China received the highest total points at 24.22 and thus is now considered the #1 ranked country as a value-oriented investing opportunity. Consequently, as shown in the right sidebar section here called "Current CCA Portfolio Holdings", you will notice that there is a substantial commitment to China-based equities. Also of note in this Country Value Rankings spreadsheet is (1) the dominance of Asian-based countries in each the top six positions; and (2) the U.S. ranks 12th among the 20 countries/regions included in these rankings.

This Country Value Rankings spreadsheet is detailed in terms of both the methodolgy used and the resources used to capture the information for each country. If you are interested in these details and would like further clarification, please share your comments and questions in writing -- they are always welcomed. Click the 'comments' link below to post your feedback. If you prefer confidential communications, my email address is listed at the top-right sidebar of this blog.

Hope this information is helpful in your thinking about your equities selection in your covered calls investing process!

Regards and Godspeed to All,


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