The long-term price-earnings ratio

price-earnings ratio;value premium;arbitrage trading rule;UK stock returns;contrarian investment Abstract:  The price-earnings effect has been thoroughly documented and is the subject of numerous academic studies. However, in existing research it has almost exclusively been calculated on the basis of the previous year's earnings. We show that the power of the effect has until now been seriously underestimated due to taking too short-term a view of earnings. Looking at all UK companies since 1975, using the traditional P/E ratio we find the difference in average annual returns between the value and glamour deciles to be 6%. This is similar to other authors' findings. We are able to almost double the value premium by calculating the P/E ratio using earnings averaged over the previous eight years.

The effect of soil phosphorus on particulate phosphorus in land runoff

Accumulation of surplus phosphorus (P) in the soil and the resulting increased transport of P in land runoff contribute to freshwater eutrophication. The effects of increasing soil P (19–194 mg Olsen-P (OP) kg−1) on the concentrations of particulate P (PP), and sorption properties (Qmax, k and EPCo) of suspended solids (SS) in overland flow from 15 unreplicated field plots established on a dispersive arable soil were measured over three monitoring periods under natural rainfall. Concentrations of PP in plot runoff increased linearly at a rate of 2.6 μg litre−1 per mg OP kg−1 of soil, but this rate was approximately 50% of the rate of increase in dissolved P (< 0.45 μm). Concentrations of SS in runoff were similar across all plots and contained a greater P sorption capacity (mean + 57%) than the soil because of enrichment with fine silt and clay (0.45–20 μm). As soil P increased, the P enrichment ratio of the SS declined exponentially, and the values of P saturation (Psat; 15–42%) and equilibrium P concentration (EPCo; 0.7–5.5 mg litre−1) in the SS fell within narrower ranges compared with the soils (6–74% and 0.1–10 mg litre−1, respectively). When OP was < 100 mg kg−1, Psat and EPCo values in the SS were smaller than those in the soil and vice-versa, suggesting that eroding particles from soils with both average and high P fertility would release P on entering the local (Rosemaund) stream. Increasing soil OP from average to high P fertility increased the P content of the SS by approximately 10%, but had no significant (P > 0.05) effect on the Psat, or EPCo, of the SS. Management options to reduce soil P status as a means of reducing P losses in land runoff and minimizing eutrophication risk may therefore have more limited effect than is currently assumed in catchment management.

Interaction of PPARG Pro12Ala with dietary fat influences plasma lipids in subjects at cardiometabolic risk

The PPARγ2 gene SNP Pro12Ala has shown variable association with metabolic syndrome traits in healthy subjects. We investigated the effect of interaction between genotype and the ratio of polyunsaturated:saturated (P:S) fatty acid intake on plasma lipids in 367 White subjects aged 30-70 y at increased cardiometabolic risk, in the RISCK study. Interaction was determined after habitual diet at recruitment, at baseline after a 4-week high-SFA (HS) diet and after 24-week reference (HS), high-MUFA (HM) and low-fat (LF) diets. At recruitment, there were no significant associations between genotype and plasma lipids, however, P:S x genotype interaction influenced plasma total cholesterol (TC) (P=0.02), LDL-cholesterol (LDL-C) (P=0.002) and triglyceride (TG) (P=0.02) concentrations. At P:S ratio ≤0.33, mean TC and LDL-C concentrations in Ala12 allele carriers were significantly higher than in non-carriers (respectively P=0.003; P=0.0001). Significant trends in reduction of plasma TC (P=0.02) and TG (P=0.002) concentrations occurred with increasing P:S (respectively ≤0.33 to >0.65 and 0.34 to >0.65) in Ala12 allele carriers. There were no significant differences between carriers and non-carriers after the 4-week HS diet or 24-week interventions. Plasma TC and TG concentrations in PPARG Ala12 allele carriers decrease as P:S increases, but are not dependent on a reduction in SFA intake.

Soil phosphorus supply affects nodulation and N:P ratio in 11 perennial legume seedlings

Developing new perennial pasture legumes for low-P soils is a priority for Australian Mediterranean agro-ecosystems, where soil P availability is naturally low. As legumes tend to require higher P inputs than non-legumes, the ability of these plants to fix N2 under varying soil P levels must be determined. Therefore, the objective of this study was to investigate the influence of soil P supply on plant N status and nodule formation in 11 perennial legumes, including some novel pasture species. We investigated the effect of applying soil P, ranging from 0 to 384 μg P/g dry soil, on plant N status and nodulation in a glasshouse. Without exogenous P supply, shoot N concentration and N : P ratio were higher than at 6 μg P/g soil. Shoot N concentration and N : P ratio then changed little with further increase in P supply. There was a close positive correlation between the number of nodules and shoot P concentration in 7 of the 11 species. Total nodule dry weight and the percentage of plant dry weight that consisted of nodules increased when P supply increased from 6 to 48 μg P/g. Without exogenous P addition, N : P ratios partitioned into a two-group distribution, with species having a N : P ratio of either >70 or <50 g/g. We suggest that plants with a high N : P ratio may take up N from the soil constitutively, while those with a low N : P ratio may regulate their N uptake in relation to internal P concentration. The flexibility of the novel pasture legumes in this study to adjust their leaf N concentrations under different levels of soil P supplements other published evidence of good growth and high P uptake and P-use efficiency under low soil P supply and suggests their potential as pasture plants in low-P soils in Australian Mediterranean agro-ecosystems warrants further attention.

Forest fire plumes over the North Atlantic: p-TOMCAT model simulations with aircraft and satellite measurements from the ITOP/ICARTT campaign

Intercontinental Transport of Ozone and Precursors (ITOP) (part of International Consortium for Atmospheric Research on Transport and Transformation (ICARTT)) was an intense research effort to measure long-range transport of pollution across the North Atlantic and its impact on O3 production. During the aircraft campaign plumes were encountered containing large concentrations of CO plus other tracers and aerosols from forest fires in Alaska and Canada. A chemical transport model, p-TOMCAT, and new biomass burning emissions inventories are used to study the emissions long-range transport and their impact on the troposphere O3 budget. The fire plume structure is modeled well over long distances until it encounters convection over Europe. The CO values within the simulated plumes closely match aircraft measurements near North America and over the Atlantic and have good agreement with MOPITT CO data. O3 and NOx values were initially too great in the model plumes. However, by including additional vertical mixing of O3 above the fires, and using a lower NO2/CO emission ratio (0.008) for boreal fires, O3 concentrations are reduced closer to aircraft measurements, with NO2 closer to SCIAMACHY data. Too little PAN is produced within the simulated plumes, and our VOC scheme's simplicity may be another reason for O3 and NOx model-data discrepancies. In the p-TOMCAT simulations the fire emissions lead to increased tropospheric O3 over North America, the north Atlantic and western Europe from photochemical production and transport. The increased O3 over the Northern Hemisphere in the simulations reaches a peak in July 2004 in the range 2.0 to 6.2 Tg over a baseline of about 150 Tg.

The effect of ram replacement and sex ratio on the sexual response of anoestrous ewes

It is accepted that an important source of variation in the response of anoestrous ewes, to the introduction of rams, is the intensity of male stimulation. The aim of this study was to investigate strategies capable of increasing the impact and transmission of the ram stimuli. In Experiment 1, two groups of seven ewes (Bluefaced Leicester male x Swaledale female) were individually penned with one ram and for the next 6 h the rams either remained in the pen or were replaced hourly. Blood samples revealed no difference in the pattern of plasma LH secretion. In Experiment 2, three groups of 16 ewes were either introduced to one ram, individually (H) or in groups of 8 (L), or remained isolated. Ram introduction increased the plasma LH pulsatility (P < 0.001). H ewes displayed more (nine versus six) male-induced LH pulses (pulses occurring within the first 45 min) and more pulses per 8 h intervals than the L group of ewes (1.9 +/- 0.3 versus 1.3 +/- 0.3), but these differences were not significant. It was concluded that (i) frequent replacement of rams within a few hours following ram introduction to ewes does not further improve the response of ewes, especially if the ram:ewe ratio is high; (ii) the characterization of the plasma LH secretion parameters during a period of 6-8 h does not seem to be an effective method to detect small differences in the intensity of stimulation received by the ewes when exposed to rams; (iii) North Country Mule ewes (Bluefaced Leicester male x Swaledale female) in the UK respond to the presence of rams in spring (late oestrous/early anoestrous season) with an elevation in plasma LH secretion. (c) 2005 Elsevier B.V. All rights reserved.

Effects of a sex-ratio distorting endosymbiont on mtDNA variation in a global insect pest

Background: Patterns of mtDNA variation within a species reflect long-term population structure, but may also be influenced by maternally inherited endosymbionts, such as Wolbachia. These bacteria often alter host reproductive biology and can drive particular mtDNA haplotypes through populations. We investigated the impacts of Wolbachia infection and geography on mtDNA variation in the diamondback moth, a major global pest whose geographic distribution reflects both natural processes and transport via human agricultural activities. Results: The mtDNA phylogeny of 95 individuals sampled from 10 countries on four continents revealed two major clades. One contained only Wolbachia-infected individuals from Malaysia and Kenya, while the other contained only uninfected individuals, from all countries including Malaysia and Kenya. Within the uninfected group was a further clade containing all individuals from Australasia and displaying very limited sequence variation. In contrast, a biparental nuclear gene phylogeny did not have infected and uninfected clades, supporting the notion that maternally-inherited Wolbachia are responsible for the mtDNA pattern. Only about 5% (15/306) of our global sample of individuals was infected with the plutWBI isolate and even within infected local populations, many insects were uninfected. Comparisons of infected and uninfected isofemale lines revealed that plutWBI is associated with sex ratio distortion. Uninfected lines have a 1:1 sex ratio, while infected ones show a 2:1 female bias. Conclusion: The main correlate of mtDNA variation in P. xylostella is presence or absence of the plutWBI infection. This is associated with substantial sex ratio distortion and the underlying mechanisms deserve further study. In contrast, geographic origin is a poor predictor of moth mtDNA sequences, reflecting human activity in moving the insects around the globe. The exception is a clade of Australasian individuals, which may reflect a bottleneck during their recent introduction to this region.

Exposing the myth of the 1:5:200 ratio relating initial cost, maintenance and staffing costs of office buildings

In an attempt to focus clients' minds on the importance of considering the construction and maintenance costs of a commercial office building (both as a factor in staff productivity and as a fraction of lifetime staff costs) there is an often-quoted ratio of costs of 1:5:200, where for every one pound spent on construction cost, five are spent on maintenance and building operating costs and 200 on staffing and business operating costs. This seems to stem from a paper published by the Royal Academy of Engineering, in which no data is given and no derivation or defence of the ratio appears. The accompanying belief that higher quality design and construction increases staff productivity, and simultaneously reduces maintenance costs, how ever laudable, appears unsupported by research, and carries all the hallmarks of an "urban myth". In tracking down data about real buildings, a more realistic ratio appears to depend on a huge variety of variables, as well as the definition of the number of "lifetime" years. The ill-defined origins of the original ratio (1:5:200) describing these variables have made replication impossible. However, by using published sources of data, we have found that for three office buildings, a more realistic ratio is 1:0.4:12. As there is nothing in the public domain about what comprised the original research that gave rise to 1:5:200, it is not possible to make a true comparison between these new calculations and the originals. Clients and construction professionals stand to be misled because the popularity and widespread use of the wrong ratio appears to be mis-informing important investment and policy decisions.

UK Food Standards Agency workshop report: the effects of the dietary n-6 : n-3 fatty acid ratio on cardiovascular health

This report summarises a workshop convened by the UK Food Standards Agency (FSA) on 11 September 2006 to review the results of three FSA-funded studies and other recent research on effects of the dietary n-6:n-3 fatty acid ratio on cardiovascular health. The objective of this workshop was to reach a clear conclusion on whether or not it was worth funding any further research in this area. On the basis of this review of the experimental evidence and on theoretical grounds, it was concluded that the n-6:n-3 fatty acid ratio is not a useful concept and that it distracts attention away from increasing absolute intakes of long-chain n-3 fatty acids which have been shown to have beneficial effects on cardiovascular health. Other markers of fatty acid intake, that more closely relate to physiological function, may be more useful.

Lack of effect of dietary n-6 : n-3 PUFA ratio on plasma lipids and markers of insulin responses in Indian Asians living in the UK

Background: Indian Asians living in Western Countries have an over 50% increased risk of coronary heart disease (CHD) relative to their Caucasians counterparts. The atherogenic lipoprotein phenotype (ALP), which is more prevalent in this ethnic group, may in part explain the increased risk. A low dietary long chain n-3 fatty acid (LC n-3 PUFA) intake and a high dietary n-6 PUFA intake and n-6:n-3 PUFA ratio in Indian Asians have been proposed as contributors to the increased ALP incidence and CHD risk in this subgroup. Aim: To examine the impact of dietary n-6:n-3 PUFA ratio on membrane fatty acid composition, blood lipid levels and markers of insulin sensitivity in Indian Asians living in the UK. Methods: Twenty-nine males were assigned to either a moderate or high n-6:n-3 PUFA (9 or 16) diet for 6 weeks. Fasting blood samples were collected at baseline and 6 weeks for analysis of triglycerides, total-, LDL- and HDL- cholesterol, non-esterified fatty acids, glucose, insulin, markers of insulin sensitivity and C-reactive protein. Results: Group mean saturated fatty acid, MUFA, n-6 PUFA and n-3 PUFA on the moderate and high n-6:n-3 PUFA diets were 26 g/d, 43 g/d, 15 g/d, 2 g/d and 25 g/d, 25 g/d, 28 g/d, 2 g/d respectively. A significantly lower total membrane n-3 PUFA and a trend towards lower EPA and DHA levels were observed following the high n-6:n-3 PUFA diet. However no significant effect of treatment on plasma lipids was evident. There was a trend towards a loss of insulin sensitivity on the high n-6:n-3 PUFA diet, with the increase in fasting insulin (P = 0.04) and HOMA IR [(insulin x glucose)/22.5] (P = 0.02) reaching significance. Conclusion: The results of the current study suggest that, within the context of a western diet, it is unlikely that dietary n-6:n-3 PUFA ratio has any major impact on the levels of LC n-3 PUFA in membrane phospholipids or have any major clinically relevant impact on insulin sensitivity and its associated dyslipidaemia.

The effect of test meal monounsaturated fatty acid: saturated fatty acid ratio on postprandial lipid metabolism

Epidemiological evidence shows that a diet high in monounsaturated fatty acids (MUFA) but low in saturated fatty acids (SFA) is associated with reduced risk of CHD. The hypocholesterolaemic effect of MUFA is known but there has been little research on the effect of test meal MUFA and SFA composition on postprandial lipid metabolism. The present study investigated the effect of meals containing different proportions of MUFA and SFA on postprandial triacylglycerol and non-esterified fatty acid (NEFA) metabolism. Thirty healthy male volunteers consumed three meals containing equal amounts of fat (40 g), but different proportions of MUFA (12, 17 and 24% energy) in random order. Postprandial plasma triacylglycerol, apolipoprotein B-48, cholesterol, HDL-cholesterol, glucose and insulin concentrations and lipoprotein lipase (EC 3.1.1.34) activity were not significantly different following the three meals which varied in their levels of SFA and MUFA. There was a significant difference in the postprandial NEFA response between meals. The incremental area under the curve of postprandial plasma NEFA concentrations was significantly (P = 0.03) lower following the high-MUFA meal. Regression analysis showed that the non-significant difference in fasting NEFA concentrations was the most important factor determining difference between meals, and that the test meal MUFA content had only a minor effect. In conclusion, varying the levels of MUFA and SFA in test meals has little or no effect on postprandial lipid metabolism.