The Investing Edge: The Win / Pay Odds Gap

Investing is too often looked at using a handful of academic models. Successful investing involves thinking about the investment process in as many different ways as possible. This article takes a look at investing using alternative views. From Betting to Investing Many of the ideas used by the investment community are adopted from the horse track and casino betting communities.

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Understanding integrity

Integrity: Constantly acting and behaving in a manner consistent with one’s values. That is my definition of perhaps one of the most misunderstood and misused words linked to morality. The point here is that integrity is not a synonym for morality or honesty. There are words for that. This is about how we behave. It is easy to label a

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Fast asset growth can mask weak margins

Growth for the sake of growth is the ideology of the cancer cell. – Edward Abbey A recent Financial Times (FT) article discussed the “great aviation disrupters of the 21st century” referring to Emirates, Etihad Airways and Qatar Airways. The article was analysing deteriorating performance amongst these three once high performing carriers. Of particular interest are two points: The first

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Zombie companies can be harmful

The term “zombie company” has recently entered people’s lexicon as the phenomenon manifests itself in China. Yet this issue did not start with China, it is closely linked to the problems faced by Japan that started in the early 90’s, called Japan’s Lost Decade and sometimes the lost two decades, which arrested the development of their economy for at least

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SWFs as endowments

Different sovereign wealth funds (SWFs) have different mandates. The largest are presumed to have a mandate similar to that of an endowment. The idea is that the state owns a large but fixed amount of a valuable commodity, usually oil, and that this oil is the property of not just the living citizens but also of all future citizens. Therefore,

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Your idea of success is completely wrong

There is this idea that success is 100% correct decision making. For some people, they understand this to be 90% or even 80% correct decision making. This idea is completely wrong. A success rate of 56%, implying 44% incorrect decisions, is a great result. Here’s why. Let’s simplify things. Assume that you are the chief executive of a company and that each decision you

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Why corporate governance fails

I am about to take my annual break from writing to refresh and energise. It reminds me of the summer holidays I used to have as a child at school. The first school I attended was The British School – Al Khubairat in Abu Dhabi, where I was one of a handful non-British students. I remember the class covering the children’s tale

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