The ASE Index has 49 members and Rocky had three simple criteria:
(1) A strong balance sheet — (i.e. not a lot of debt).
(2) A reasonable return-on-equity over the past few years.
(3) Some evidence of earnings growth over the past 8 years.
Amazingly, out of 49 stocks (Hellenic Coca-Cola excluded,) only two stocks passed these pathetically undemanding tests:
Metka S.A. — a manufacturer of heavy equipment used in mining and ports. Unfortunately, this stock is actually up 3% year-to-date, so the market knows this is a decent company.
Jumbo S.A. — a chain of retail stores that sells toys and baby products. (Rocky rarely pays retail. He likes wholesale.)
Iaso, SA, a company that provides obstetrics and gynecological services did not make the cut, however, it might have been a pairs trade with Jumbo SA. (Short the OB/GYN, long the baby toys?)
[Disclosure: Rocky never gives investment advice. However he concludes that while the Greek stock market may rally on a resolution of their debt crisis, he doesn't see any compelling investments...and the country seems to lack any listed world-class enterprises. As to the question, "What's a Grecian Urn?" the answer is around $30,000 per year. But that's evidently tax free, with an early retirement too.]
The Central Bank of India announced this morning that they purchased 200 metric tonnes of gold from the International Monetary Fund. See: http://www.imf.org/external/np/sec/pr/2009/pr09381.htm
This is ostensibly bullish for the price of gold. But is it bullish for Blue Nile stock? (NILE)
Rocky does the math:
1 Tonne = 32,151 Troy Ounces
1 Troy Ounce = 31.10 Grams
This fashionable Blue Nile wedding ring contains 1.6 grams of gold:
Rocky’s X-22 computer calculates that the Indian Central Bank just bought enough gold for “only” 125 MILLION wedding bands. Since the population of India is 1.1 BILLION, the Indian Central Bank is sensibly planning ahead.
[Disclosure: Rocky has been, is, and may continue to be, long gold bullion. But he may change his mind if he reads that scientists have finally succeeded in turning lead into gold.]