John Kay

Mr Buffett’s success demonstrates the weakness of one economic theory, the efficient market hypothesis, and the strength of another – the central role that the pursuit and defence of economic rents plays in modern corporate life.

Christmas shopping in Marylebone High Street provides insight into the internalisation of externalities and the relationship between corporate governance and business strategy.

Private equity promoters propose layer upon layer of debt, leveraged by non-recourse finance. But the same finance theory also tells us that you do not increase the value of an investment portfolio by increasing gearing.

Intellectual property rules are an attempt to strike a balance between conflicting public interests and the need to provide economic incentives. However, companies should find commercial success through new products, not new legislation.

An average long run value of the equity premium of up to 8% is arithmetically unsustainable: within a few decades, profits and dividends would absorb the whole of national income.

Determining the incidence of a tax – the people who are ultimately out of pocket as a result of its imposition – is a complex process. But we should be concerned about the overall distribution of the tax burden – which people pay what. And this is best examined by looking at the tax system as a whole rather than its individual component

We are often told that the best way to protect artistic innovation and creativity is to extend copyright. But it is not usually the budding novelist or musician that pushes the argument.

Books that John has reviewed in the past…

If stock-picking fails to beat the index, why should picking companies? It won’t, unless mergers carefully match the firms involved.

Efficient markets make money for market participants, but not for market makers. That is something the enthusiastic promoters of B2B exchanges have yet to understand.