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Price and value don’t always move in tandem

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By Michael O’Connor    

In 2021, the S&P 500 hit new record highs in nearly one-third of all trading days and saw losses capped at 5%.

In a year of perpetual uncertainty, we saw one of the most robust and stable market performances in the last 25 years.

"The market can remain irrational longer than you can remain solvent" – John Maynard Keynes

Last year brought us the now infamous GameStop and AMC Short Squeezes, countless meme stock rallies and a 49,000,000% return for the meme coin Shibu Inu.

At this point, I think it’s blatantly apparent to everyone that price and value don’t always move in tandem.

In finance, we often expect the world to behave rationally. We carefully look to quantify the probability of each individual outcome, but not everything is measurable. We naively assume logic will prevail and underestimate the persistent irrationality of man.

As, investor Jim Grant reminds us:

"To suppose that the value of a common stock is determined purely by a corporation’s earnings discounted by the relevant interest rates and adjusted for the marginal tax rate is to forget that people have burned witches, gone to war on a whim, risen to the defense of Joseph Stalin and believed Orson Welles when he told them over the radio that the Martians had landed."

History is a perpetual stream of mistaken opinions and unpredictable outcomes. If you’ve relied on data and logic alone to make sense of the economy, you’ve been confused for one hundred years straight.

Instead of presuming everything is purely logical, it is important to realise that there are two sides to every investment: the numbers and the story.

While not always the case, in today’s momentum-driven market, ‘the story’ has consistently been more potent than the numbers. We have seen growth stocks soar off the back of compelling narratives about future possibilities with little numbers to back them up. SPAC’s, high growth stocks and altcoins have rocketed ‘to the moon’ all hitched to a promise of what could be.

This may be frustrating for many, but these market forces need to be acknowledged and understood. Blindly assuming that logic will instantaneously prevail is a sure way to underestimate the inherent risks of the market.

Crazy things happen in markets all the time. Don’t expect that to stop any time soon.

Outlook for 2022

In short, I view this to be the mid-cycle of the recovery. The growth rates seen early in the cycle will slow, volatility will increase, economic and earnings figures will be suppressed by higher inflation and less accommodative central bank policies. However, there are still opportunities for risk assets in the coming year, albeit with more modest expectations for returns.

I continue to favour US over international stocks. Large-cap and high-quality stocks look set to lead the way as markets will likely favour a tilt towards value stocks.

Fixed income remains an asymmetric trade with little upside, while alternatives will continue to become less ‘alternative’ as investors seek diversification in a rising interest rate market.

Risks abound, but opportunities will persist.

For my full, in depth 2022 outlook, go to www.theislandinvestor.com.

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Paralympic legend Jason Smyth visits St Brendan’s

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Paralympic legend Jason Smyth visits St Brendan’s


World renowned Paralympian and world record holder Jason Smyth paid a visit to St Brendan’s College on Wednesday afternoon as part of a high profile visit to Killarney.


The six time Paralympic gold medallist spoke to second year students from St Brendan’s College, alongside students from neighbouring schools St Brigid’s Presentation Secondary School and Killarney Community College.
The interactive talk and interview took place ahead of World Sight Day, with the legendary sprinter sharing his personal journey with Stargardt disease, a genetic eye condition that left him legally blind at eight years old.
The Derry native, who holds the world record as the fastest Paralympian on earth over 100 metres, offered inspiring insights into overcoming physical adversity and achieving success at the highest level of world sport.
The school visit formed the opening leg of his Killarney schedule before he took centre stage later on Wednesday evening at The Killarney Plaza Hotel & Spa.
Smyth headlined An Evening with Paralympian Jason Smyth, an event organised by the Killarney Chamber of Tourism and Commerce as part of its winter schedule, sponsored by AIB.

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Deerpark Retail Park placed on market for fifteen million euro

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Deerpark Retail Park in Killarney has officially been placed on the market with a guide price in excess of 15.4 million euro, excluding VAT.

International real estate firm Cushman & Wakefield has been appointed as the sole sales agent to handle the high-profile commercial property sale on behalf of its current owner, Investcorp.

Investcorp, a global investment management firm headquartered in Bahrain, had previously acquired the prominent shopping complex.


The sale represents one of the largest commercial property offerings to launch in County Kerry this year.

Located roughly 1.3 kilometres west of Killarney town centre, the scheme enjoys strong regional connectivity and sits adjacent to independently owned operations including a Tesco Extra store, a Tesco petrol filling station, JYSK, and Aldi.


Constructed in 2006, the development extends across approximately 10,482 square metres, or 112,835 square feet.

The scheme comprises a mix of modern retail warehouse units and a complementary neighbourhood centre, offering 13 individual units in total with Part Open and Part Bulky Use planning permission.

The units range in size from 94.6 square metres up to 1,994.9 square metres. Visitors have access to approximately 248 customer parking spaces across the commercial grounds.

The park is currently 100 per cent occupied by a strong line-up of established national and international brands.

Key retail tenants include Marks & Spencer, Boots, DID Electrical, Maxi Zoo, and Mountain Warehouse.

The neighbourhood centre element accommodates service and convenience operators such as Costa Coffee, Card Factory, and Salon B.

The first-floor accommodation is fully let to Peak Performance Academy, which provides additional rental diversification.

Additionally, the scheme benefits from an agreement with Tesla to operate eight electric vehicle charging bays within the customer car park.


Commercial figures show that the property generates a total current rental income of 1,326,458 euro per annum, with a weighted average unexpired lease term of 4.45 years to break options and 6.46 years to lease expiry.

Cushman & Wakefield noted that the quoted guide price of 15.4 million euro reflects a net initial yield of 7.83 per cent, assuming standard purchaser costs of 9.96 per cent.

The selling agents highlighted that the fully occupied asset offers investors an attractive income profile alongside scope for additional income generation through parking commercialisation.

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