# Irish shares plummeted by almost 9% in Dublin this morning



## askU (1 Aug 2008)

Irish shares plummeted by almost 9% in Dublin this morning...

Elan shares down 58% at the moment... How much worse can it all get?

See here:
http://www.rte.ie/business/2008/0801/elan.html

http://www.davy.ie/PricesAndCharts?equityIdx=$0$$$ELN.I

[broken link removed]


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## rmelly (1 Aug 2008)

Where's that thread about RTE only reporting the bad news and ignoring the good news like a 4% rally a few weeks ago when you need it?


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## Brendan Burgess (1 Aug 2008)

Elan was the second largest company by market capitalization.  So it brought down the whole index. 

The falls elsewhere were not that significant. 

This is an Elan story. Not an ISEQ story.

Brendan


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## shnaek (1 Aug 2008)

It is an Elan story. The ISEQs fall over the past year has been mainly a financials story. The ISEQ is heavily weighted in financials, who together with a couple of other companies make up the bulk of the ISEQs value. 
If anything this shows how important it is to be geographically, as well as industrially diversified when investing in equities.


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## Kemo_Sabe (1 Aug 2008)

the story of the ISEQ is a good illustration of how the 'gains' of our recent credit bubble were totally illusionary

prepare for similar corrections in less liquid markets


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## Sunny (1 Aug 2008)

Brendan said:


> Elan was the second largest company by market capitalization. So it brought down the whole index.
> 
> The falls elsewhere were not that significant.
> 
> ...


 
Might be true but this just shows the problem of diversifation and the ISEQ. The fact that it is just an Elan story is not much comfort to people who might bought ISEQ trackers and suddenly find themselves 9% down on the back of one companies share performance


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## PMU (1 Aug 2008)

When you invest in the Iseq you invest in an index based on the market capitalization of IE equities. When you invest globally you can asset allocate based on international market capitalization. Just as the Iseq index is made up of the market weights of IE equities, the world market cap approach allocates by the relative weight of world stock markets.  There is an index - the MSCI World - that follows this approach.  The Iseq makes up less than 1% of world market cap index so unless you know something about the Iseq that nobody else does (e.g. you have a good reason to believe the Iseq is underweight in the index or you are super-patriotic), it’s difficult to see why anyone would want to invest more than 1% of their assets in the Iseq. Even if you restricted all your investment to eurozone equities, the Iseq makes up just 1.7% of the MSCI EMU Index.  This implies that an investor who asset allocates on market cap would have a max of €1,700 exposure to the Iseq for every €100,000 invested.   Based on the posts I’ve read on AAM, I’d say that the typical AAM investor has less than €100,000 in their portfolio (of course I might be wrong).  If you had been unlucky enough to invest in the Iseq at its market peak you’ld now be down about 45 – 50%. So, if you had followed a rational asset allocation strategy you’d be down €850 max due to the Iseq for every €100,000 you’ve invested globally. Hardly worth losing sleep over.


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## Duke of Marmalade (1 Aug 2008)

Today it is an Elan story. Before that it was an airlines' story. Before that a banks' story. Before that a building sector story. Then there was the soft drinks story. And the sugar company didn't miss giving us a jolt as well.

Heck, are we sure it ain't simply that the ISEQ is jinxed.


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