Jan 282013

Asset management is full of wise-sounding maxims. “Never catch a falling knife” is one of them, which seems compelling until it is matched by its opposite: “Be greedy when others are fearful”.

Meyer Burger caught my attention in November. The price was around 8 Swiss Francs. After doing my work, I asked to talk to the CFO, who is also the Investor Relations Officer. He was travelling at the time and couldn’t make it. So we planned to talk in January. I had instead a good conversation with the Media Relations Officer. The price was falling fast, and in early December it sank below 6.

Last week I finally talked to the CFO, who addressed my remaining concerns. But in the meantime the price had climbed to 9 Swiss Francs – a 50% move in less than two months.

“Better a missed opportunity than a bad investment” sounds wise too and, unlike the pair above, is always true. Especially when – as I think is the case with Meyer Burger – there is still plenty of scope for a good return. But it is an irritating consolation. “Don’t forget the 80/20 rule” is an apt rebuke.

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