22 examples of share price disasters

Friday 24 May 2019

Share price declining

CFA UK speaks to author Tim Steer of The Signs Were There  

CFA UK hosted Tim Steer for a presentation of his book The Signs Were There as part of our Author Series events. Tim’s background is in accounting and he was once one of the most highly-rated fund managers in Britain, before his retirement.

Tim took the opportunity to speak with CFA UK to about the takeaway messages from his latest book.

Because of his experience, Tim gained the ability to detect, in a company’s published accounts, the signs that may reveal that company is disguising troublesome facts that may even lead to a corporate collapse. During the presentation Tim went through a series of examples of recent listed stock market disasters, showing how an attentive eye could spot, within the accounts that everyone can access, the signs that could cast doubts about the robustness of those businesses long in advance.

As an example, long before Patisserie Valerie revealed the accounting fraud that brought the popular chain of cafés to its knees, a noticeable surge in inventories – quite dubious for a company that deals with fresh food – would raise more than one question about the faithfulness of the accounts and the real state of the business.

By going through such examples, Tim Steer provided stimulating and insightful information for the audience. Many CFA UK members would find educational value in this content, an important lesson on how independent judgement and analysis can add tremendous value to the investment business.

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