Tag: Finance
Words of comfort for the grieving investor
Perhaps the most difficult of investment lessons is that inaction is often the best action.
Tough love is the best regime for failed banks
The notion that private companies can extract indiscriminate, industry- wide support from the public for the benefit of their investors by threatening that their weaker members will collapse is intolerable in any sector.
Helping savers and attending to credit risk
The public interest does not require taxpayer support of financial institutions: indeed it requires that some of them make substantial losses in this crisis. Only then will credit risk begin to be priced appropriately and lenders do their diligence.
BoE should not do City’s bidding
Financial market liberalisation cannot be undertaken on only one side of the balance sheet. If there is freedom to lend, then there must be freedom to lose money on lending.
Sometimes the market is best viewed from afar
That investment style of being in touch with the market but distant from it has impressive antecedents and performance.
Same old folly, new spiral of risk
Risk markets are based more on imperfections of information and understanding than on differences in attitude to risk. And with this, financial follies repeat themselves in each generation.
Mr Market vs the voting machine
The anthropomorphic metaphor of the market is too relativist, the view of the market as a voting machine is too rationalist: to take either too seriously leads to error.
Conflicting creeds: how to value art, houses and Asian stock
For fundamentalists, the value of an asset is the sum of the returns it will yield over its life. For fellow travellers, an asset is worth what someone else is willing to pay for it.
Head office must be in the best place for business
The company headquarters should be the place from which the business can best be run. Location decisions often involve proximity to necessary resources. For banks, this nowadays means access to political and commercial capital.
Prudence is knowing that not all swans are white
Models are only as good as the correspondence between the model and the world, and this is where problems begin.