Hitting The Century (V – Ireland)

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% of world GDP, Andrew Langford, COR, default, Emerald Isle, Europe, European sovereign debt crisis, Event Driven, Fairfax, FBD Holdings, Greece, home bias investing, Ireland, Irish value investing, ISEQ, Prem Watsa, Price/Book, Return on Equity, taxes, Thatcher, Total Produce, Trinity Biotech, UK, Wilbur Ross

Continued from here. OK, let’s take a look at my next investment allocation:

Ireland (16%):   So much for all my rabbiting on about home-bias, what a terrible job I’ve done here..! Ireland accounts for a whopping great 0.3% of world GDP, and yet I’ve got 16% of my portfolio invested in the Emerald Isle (yes, please visit, all tourist revenues gladly accepted)!? OK, so, in my defence:

i) C’mon, everybody’s doing it! I’m confident 16% is far lower than the average Irish investor (and US investors are just as bad – how many realize US GDP is now just 22% of world GDP?).

ii) As Philip O’Sullivan (taking off the green jersey?!) reminded me, these stock picks are not that Irish anyway! Total Produce (TOT:ID/LN) is essentially pan-European, Trinity Biotech (TRIB:US) operates primarily in the US (& Europe) – I guess FBD Holdings (FBD:ID, FBH:LN) is my only true Irish exposure!

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TGISVP VII (More Disco!)

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Black Earth region, catalyst, German property, home bias investing, Ireland, Irish shares, Irish Stock Exchange, Irish value investing, IRR, Jim Rogers, market mastery, portfolio allocation, Prem Watsa, teenage dating, TGISVP, Warren Buffett, Wilbur Ross

Continued from here. In my last post, I reflected on how pernicious the effects of ‘home bias‘ are, and asked:

So why on earth did I launch something like The Great Irish Share Valuation Project..?!?

What am I trying to do, even inadvertently? Encourage readers to abandon their current portfolio, and go all-in on Ireland and a Top 10 of high potential Irish stocks? Good grief, no…not at all! Actually, my first (and perhaps primary) motivation has been to share with you more of an investing idea, rather than any investing recommendations:

Don’t Bank on the Banks!

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3-6-3, Allied Irish Banks, Bank of Ireland, EIIB, iShares Turkey ETF, Loan-to-Deposit Ratio, TBTF, valuestockinquisition, Wilbur Ross, WisdomTree ETF

John from valuestockinquisition.com left a great comment here, and I thought I’d set down some thoughts here with a blog post rather than a comment:

I’m not too worried about EIIB (EIIB:LN) in this context, at this point I pretty much consider it to be a failed bank experiment. Now, they just need to monetize their bank licence and move on. More generally, John has some great points and examples, and I’m sure he could provide more. It’s like fingers in the dyke – for every bank ratio you focus on, there’s another you’re forgetting and that’s about ready to spring a leak. And he highlights that no ratio’s proven to be a reliable predictor of success or failure. God, all in all, just look at any specific TBTF bank and it really just looks like one great bastard of a Rube Goldberg contraption…