John Kay

Think probabilities and be detached. It’s hard advice to follow. That is why the financial services industry is better off than its customers.

When the future arrived in 2007, we learnt that others had febezzled from us on a massive scale. And that we had also febezzled from ourselves.

Typically reasons given for judgment are rationalisations after the event, the consultation is a formality rather than a sincere search for opinions, and the accountability is a matter of extensive paperwork rather than a genuine appraisal of performance.

Diversification is a matter of judgment not statistics. A model will tell you only what you have already told the model and can never replace, though it can enhance, an understanding of market psychology and the factors that make for successful business.

The financial innovation that was once the means of spreading risk is now an unmanageable source of instability.

John explains why capital is the stuff you have to protect yourself and why banks can never have enough of it.

John describes the vital role that pain – the gift no-one wants – plays in the evolution of business and finance.

The measure of the productivity of an activity is the public and private benefit from a good or service that results from that activity.

Although the progress of grief is predictable, it is also slow. Sell on denial, buy on depression, was my advice to investors last year and it looks still valid today.

The notion that extending intellectual property rights in the music industry would provide pensions for ageing and impoverished crooners is an engaging fantasy.