Comment of the Day

March 06 2014

Commentary by Eoin Treacy


Eoin Treacy's view

A number of subscribers have requested that we add a section to the Chart Library devoted to the companies we regard as Autonomies. Sarah completed this task today and you will now find the list in the International Equities section third down from the top of the left column.

We began to focus on large successful multinational corporations in 2010 as the global economy was led out of the credit crisis by Asia. In order to compile a list of suitable shares we looked for those that are truly global and defined that as having at least 50% of their revenues originating outside their home country. 

We also looked for those that dominated their respective niches. While not intentionally seeking oligarchies, the concentration that occurs as part of a capitalist system means that the Autonomies represent a number of oligarchies where a small number of companies dominate their entire markets. 

We did not make dividend growth a defining characteristic for the list because a number of high growth companies do not pay dividends. However, there is substantial cross pollination between the Autonomies and S&P’s Dividend Aristocrats because globally oriented companies with sound balance sheets generally have solid records of dividend growth. 

In my book, Crowd Money, I used the Autonomies as an example of a developing investment theme and depicted long-term charts so that base formation completion was abundantly clear. This helped to stress the point that ranges are explosions waiting to happen and that long-term bases give rise to impressive uptrends. 

?You can now scan through the constituents of the Autonomies, using the View All Charts function, in the Chart Library. What is clearly evident is that commonality which was such a feature of the list for the first two years has broken down. Consumer focused sectors have spent much of the last 18 months ranging while industrially oriented sectors broke out of their bases later and continue to extend their uptrends.


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