Decision making and risk

My willingness and ability to take risks and manage them often comes up as a topic of conversation. Let me explain how I got here. In 1989, after completing my first year at university, I spent the summer as an intern at the Abu Dhabi Investment Authority (Adia). I found the world of investments fascinating and as part of that

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How can government acclimatise lenders to SMEs?

Over the past six months leaders in the banking sector have announced that SME owners and managers were departing the UAE with their companies in trouble and defaulting on their loans. The implication was that the SMEs were in trouble because of a contraction in the economy. However, the banks clarified that a portion of the defaults was because of

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The Investor’s Edge

Many of the ideas used by the investment community are adopted from the horse track and casino betting communities. Much of the failure that has dogged the investment community is due to rocket scientist PhDs misunderstanding the successful models of plebeian punters. The use of betting as an example is not an endorsement, just history. To understand how the securities

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Cost Management Insights for Entrepreneurs

My basic philosophy on business is that opportunities and challenges are continuously presented to us and we need to respond appropriately. When it comes to managing challenges it makes sense to prepare in advance. My experience is that many entrepreneurs have difficulty doing this at two key points: right after a round of funding and when their business goes cash

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Adaptive Strategy Construction

In a previous post, Deconstructing Strategy, I discussed some of the difficulties in developing a strategy. In this post I present a method that has worked well for me. The philosophy behind this method is based on the two ideas that the Pareto principle, also known as the 80/20 rule, applies to business strategy and that strategies must adapt to new information and

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The Principal–Agent Problem in Risk-Taking

The single greatest driver of business success is not a unique idea, innovation, marketing, networking, leading or managing. It is the willingness and ability to take calculated risks. There are many different definitions for risk but a useful one is: risk is the presence of an unknown negative outcome. Another point to make clear is that the key success factors

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SMEs: The Ignored Middle Child of Banking?

عربي In developing various business plans for SME credit I often review why the commercial banks do not lend to this sector proportional to its contribution to GDP. I have written at length about some of my main ideas but I think there are several secondary issues that also play a role. One is the positioning of SME loans on the risk/reward

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