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.

Effect of linseed oil and fish oil alone or as an equal mixture of ruminal fatty acid metabolism in growing steers fed maize silage-based diets

Based on the potential benefits to human health there is interest in increasing 18:3n-3, 20:5n-3, 22:6n-6, and cis-9,trans-11 conjugated linoleic acid (CLA) in ruminant foods. Four Aberdeen Angus steers (406 ± 8.2 kg BW) fitted with rumen and duodenal cannulae were used in a 4 x 4 Latin square experiment with 21 d periods to examine the potential of fish oil (FO) and linseed oil (LO) in the diet to increase ruminal outflow of trans-11 18:1 and total n-3 polyunsaturated fatty acids (PUFA) in growing cattle. Treatments consisted of a control diet (60:40; forage:concentrate ratio, on a DM basis, respectively) based on maize silage, or the same basal ration containing 30 g/kg DM of FO, LO or a mixture (1:1, w/w) of FO and LO (LFO). Diets were offered as total mixed rations and fed at a rate of 85 g DM/kg BW0.75/d. Oils had no effect (P = 0.52) on DM intake. Linseed oil had no effect (P > 0.05) on ruminal pH or VFA concentrations, while FO shifted rumen fermentation towards propionate at the expense of acetate. Compared with the control, LO increased (P < 0.05) 18:0, cis 18:1 (Δ9, 12-15), trans 18:1 (Δ4-9, 11-16), trans 18:2, geometric isomers of ∆9,11, ∆11,13, and ∆13,15 CLA, trans-8,cis-10 CLA, trans-10,trans-12 CLA, trans-12,trans-14 CLA, and 18:3n-3 flow at the duodenum. Inclusion of FO in the diet resulted in higher (P < 0.05) flows of cis-9 16:1, trans 16:1 (Δ6-13), cis 18:1 (Δ9, 11, and 13), trans 18:1 (Δ6-15), trans 18:2, 20:5n-3, 22:5n-3, and 22:6n-3, and lowered (P < 0.001) 18:0 at the duodenum relative to the control. For most fatty acids at the duodenum responses to LFO were intermediate of FO and LO. However, LFO resulted in higher (P = 0.04) flows of total trans 18:1 than LO and increased (P < 0.01) trans-6 16:1 and trans-12 18:1 at the duodenum compared with FO or LO. Biohydrogenation of cis-9 18:1 and 18:2n-6 in the rumen was independent of treatment, but both FO and LO increased (P < 0.001) the extent of 18:3n-3 biohydrogenation compared with the control. Ruminal 18:3n-3 biohydrogenation was higher (P < 0.001) for LO and LFO than FO, while biohydrogenation of 20:5n-3 and 22:6n-3 in the rumen was marginally lower (P = 0.05) for LFO than FO. In conclusion, LO and FO at 30 g/kg DM altered the biohydrogenation of unsaturated fatty acids in the rumen causing an increase in the flow of specific intermediates at the duodenum, but the potential of these oils fed alone or as a mixture to increase n-3 PUFA at the duodenum in cattle appears limited.

Diallyl disulphide, a beneficial component of garlic oil, causes a redistribution of cell-cycle growth phases, induces apoptosis and enhances butyrate-induced apoptosis in colorectal adenocarcinoma cells (HT-29)

Colon cancer is a leading and expanding cause of death worldwide. A major contributory factor to this disease is diet composition; some components are beneficial (e.g. dietary fibre) whilst others are detrimental (e.g. alcohol). Garlic oil is a prominent dietary constituent that prevents the development of colorectal cancer. This effect is believed to be mainly due to diallyl disulphide (DADS), which selectively induces redox stress in cancerous (rather than normal) cells which leads to apoptotic cell death. However, the detailed mechanism by which DADS causes apoptosis remains unclear. We show that DADS-treatment of colonic adenocarcinoma cells (HT-29) initiates a cascade of molecular events characteristic of apoptosis. These include a decrease in cellular proliferation, translocation of phosphatidylserine to the plasma-membrane outer-layer, activation of caspase-3, genomic-DNA fragmentation and G2/M phase cell-cycle arrest. Short-chain fatty acids (SCFAs), particularly butyrate (abundantly produced in the gut by bacterial fermentation of dietary polysaccharides), enhance colonic cell integrity but, in contrast, inhibit colonic-cancer cell growth. Combining DADS with butyrate augmented the effect of butyrate on HT-29 cells. These results suggest that the anti-cancerous properties of DADS afford greater benefit when supplied with other favourable dietary factors (SCFA/polysaccharides) that likewise reduce colonic tumour development.

Effects of caffeic acid and bovine serum albumin in reducing the rate of development of rancidity in oil-in-water and water-in-oil emulsions

The antioxidant properties of caffeic acid and bovine serum albumin in oil-in-water and water-in-oil emulsions were studied. Caffeic acid (5 mmol/kg emulsion) showed good antioxidant properties in both 30% sunflower oil-in-water (OW) and 20% water-in-sunflower oil emulsions (WO), pH 5.4, during storage at 50 ºC. Although bovine serum albumin (BSA) (0.2%) had a slight antioxidant effect, the combination of caffeic acid and BSA showed a synergistic reduction in the rate of development of rancidity, with significant reductions in concentration of total volatiles, peroxide value (PV) and p-anisidine value (PA) for both emulsion types. The synergistic increase in stability of the OW and WO emulsions containing BSA and caffeic acid was 102.9 and 50.4 % respectively based on TOTOX values, which are calculated as 2PV + PA, with greater synergy calculated if based on formation of headspace volatiles, The OW emulsion was more susceptible to the development of headspace volatiles by oxidation than the WO emulsion, even though the degree of oxidation assessed by the TOTOX value was similar.