Mandatum warns of the US bubble and advises on Finnish stocks – “That’s where everyone can wonder if it’s justified”

The weak success of Finnish stocks in recent years, especially in relation to US stocks, is not a guarantee of a similar development in the future. This is what the asset management company warns Commandment in his recent report.

In the Mandatum Magazine investor publication, Mandatum’s equity director Jukka Järvelä to point out that every now and then a theme shows the direction of the entire stock market. It is also apt to form a bubble.

“We have seen a technology bubble, General Electric was for a long time the largest company in the world by market value, as well as an oil company Exxon Mobil. Even tobacco companies like Philip Morriswere among the world’s largest companies in the 90s. Trends come and go. Now, for example, the market value of the so-called Magnificent 7 group corresponds to more than forty percent of the gross domestic product of the United States. Everyone can think about whether it is justified.”

Magnificient 7 companies include Apple, Microsoft, Amazon, Alphabet (Google), Meta Platforms (Facebook), Nvidia and Tesla. These shares have skyrocketed. In the summer, the high level of appreciation did break down a bit, but the decline was only temporary. One of the factors that strengthens shares is the heightened expectations of a further decrease in interest rates.

According to Järvelä, there are now opportunities for investors in Finland, which has fared less well, and on the other hand, there are weaker companies in the United States, which have a tougher valuation level.

He also points out that in Finland, possible undervaluations have exploded upward, offering investors profit opportunities when buyout offers have been made for listed companies. Purchase offers have been made recently From Caverion, Black, From Purmo, About Efecte, From Uponor and Innofactorista.

According to Järvelä, it’s ultimately about the time horizon. The past few years have been weaker than average for Finnish stocks, but with a 20-year perspective, they have performed better than average. Järväla emphasizes knowledge of the companies and their industries, instead of the investor looking at which stock exchange the company is listed on.

Correction at 11:57: translated Jukka Järvelä’s title as shareholder director.