Carl Icahn, undoubtedly one of the greatest investors of all time, recently wrote an open letter to Apple Inc.’s management, proposing a share repurchase program, since he believes the shares are far too cheap. His analysis is quite uncomplicated; it merely deducts the company’s enormous balance sheet cash – which it doesn’t need to operate – from the stock price, and compares the adjusted price to earnings. On that basis, Apple trades at about 11x earnings versus about 17x for the S&P 500. As the largest, perhaps most ubiquitous company in the world, if any shares should be priced efficiently, it should be Apple’s. Yet they are not. His profound question about the irrationality of the valuations of the largest, most liquid companies: if Apple’s shares are fairly valued at 11x earnings, how can the far higher-priced blue-chips at the top of the S&P be fairly valued as well, unless for reasons other than fundamentals like earnings and growth?

Highlighted companies: IG Group Holdings Plc. (IGG LN), Dominion Diamond Corporation (DDC), and Amaya Inc. (AYA CN).

Download: Global Contrarian Compendium June 2015