Dive into the archives.
- A New Silk Road
Gradually it has dawned on me that the new Silk Road is rather like dream-time: with tracks everywhere and separate tribal dreamings singing songs with different lyrics but overlapping and similar tunes. OK: so I have Australia on the mind; and the upcoming trip with talks about investor psychology in light of all we know [...]
- Equities and the Time Value of Emotion
A commonplace in Finance I is the “time value of money”- the idea that future worth may be discounted to the present moment. But looking at the oscillation of stocks over a given time-period, spanning a universe of daily volatility unknowable in any discrete “present”, it makes you wonder about an equity’s present “value”. What [...]
- Titanic Flaw in Reality Testing
Reporting on Davos, Simon Johnson presents a grim picture of CEO reality. What is even grimmer is that it lines up squarely with Gillian Tett’s report last week on the need, among CEO’s for therapeutic bonding, with Davos as group therapy. The incursion of clinical psychology into the world of corporate finance is insidious. It [...]
- The Essential Psychology Within Financial Investment
We know corporations are legally bound to maximize self-interest. What about investors? The act of investment is in “laying out money or capital in an enterprise with the expectation of profit” ( wordnet.princeton.edu/perl/webwn). Investment in financial markets occurs through the purchase of financial instruments. Profit is expected is through some combination of interest, income, and [...]
- Aporia: On knowing. On not knowing.
It is 8:05 AM: my cup of coffee and Financial Times are before me as I prepare for US markets to open. Andrew Hill, writing the “On management” column today, presents a chilling precis on BP and the snail’s pace of corporate culture change with far wider implications for investors: “A safety survey of the [...]
- The line is dead, but “If it ain’t broke…”
Friends have been e-mailing me, “are you all right, we’ve been calling and can’t get through”. Truth is, I’m fine; but with the phone down, I’m also unable to reset the pin number to retrieve my home voicemail— which must be accessed through the now incapacitated phone. Another minor example of customer dissatisfaction. But as [...]
- What Banks Know
Some years ago, before Depression panic gripped the world, I had the opportunity to consult with several members of the banking industry. Each was involved in an obscure area of work, destined to become headline news within a few years. And whether discussing complex derivative trades or the structuring of collateralized debt obligation tranches, each [...]
- Mister Market
Mr Market, goes the common wisdom, suffers from bipolar disorder. We join him in his enthusiasms—momentarily gratifying our greed and desire as we attempt to amplify wealth; and then our stomachs tighten and grip as his mood swing plummets to strip our dreams. We say the losses are on “paper”; but bitterly remember that the [...]
