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Assessing sentiment and fundamentals

John Baron reminds readers why this discipline suggests the UK market offers compelling value
December 7, 2018

Recognising when sentiment and fundamentals diverge is the prerequisite of a good investment decision. In executing the trade, the investor will be moving against the consensus. Successful investing requires one to be a contrarian. As Sir John Templeton once suggested, it is impossible to produce superior performance unless you do something different from the majority.

And the majority have set upon the UK market as being the most unpopular in the developed world – even more so than Japan. This is confirmed by a host of commentaries by the big investment houses. Yet, away from the emotion of Brexit, the fundamentals speak a different story. Here lies the opportunity.

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