The Course

Aims & Objectives

How does one best determine ‘value’ in stockmarkets? What forces act to produce the regular material deviations from even the best estimates of such value?

These are the key questions that this course seeks to answer. Although utilising historical examples, the course is an educational tool for active investors. This is not a chronological history of financial markets it is a practical history.

Sample Teaching Video

Course Content


Which equity valuation criteria work?

In the first module, Derry Pickford and Professor Stephen Wright look at 200 years of data on equity and bond valuations to find which equity valuation criteria work in practice.

They find that two measures of valuation– contrary to the teachings of the efficient market hypothesis (EMH) – are predictive of future equity market returns.

Having established the best guide to fair value for equities, the rest of the course focuses on the forces that cause equities to trade away from fair value.

Money and Financial Markets

How does money affect financial markets?

John Greenwood teaches the unit on liquidity. John explores the mechanisms through which money affects financial markets and focuses on how, in understanding liquidity trades, one’s understanding of financial markets is enhanced.

Students will learn about how money is destroyed and created in different monetary regimes. Through practical examples the impact of money and credit upon asset prices is explored.

Market Behaviour

Why do markets behave the way they do?

And so to psychology: our unit on behavioural finance is taught by Herman Brodie, who runs a consultancy company helping financial services companies implement behavioural techniques.

Herman’s long experience as a currency trader and provider of advice to financial institutions has given him unique insights into the practical uses of behavioural finance.

Inflation and Financial Markets

Investing in periods of inflation, disinflation and deflation?

Another factor impacting deviation from fair value is inflationary expectations. Peter Warburton looks at the impact of changes in inflation on bonds, bills, equities and equity sectors in different countries over the past 100 years.

We explore how different sectors of the equity market perform in different inflationary environments.

Predicting Financial Futures

How do we predict our financial futures?

Russell Napier concludes the formal teaching with a lecture on how the key forces driving the mean reversion of equity valuations interact.

On the final day we have 3 morning lectures from Jon Compton, Edward Chancellor and Russell Napier.

Jon Compton lectures on common mistakes in the investment industry (Missing The Obvious: Thirty-Five Years in the Investment Trenches).

Edward Chancellor lectures on the capital cycle following on from his work in the books Capital Account and Capital Returns.

The morning finishes with Russell Napier utilising the lessons from the course to forecast our financial future (Financial History: The Next Ten Years).