Tag: Finance

Bubbles can be downward as well as up. A new term is required.

If public agencies are to supervise seriously the strategies of high street and investment banks, we might as well nationalise them; the proposal is entertained only because everyone knows it is not really serious.

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.

Confidence in the models used for risk management in financial institutions is a casualty of the credit crunch. Only information from outside the model – what we call general knowledge and common sense – enable us to judge the validity of the model itself.

Regulation in a market economy is targeted at specific market failures and should not be a charter for the general scrutiny of business strategies of private business.

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.

Warren Buffett's emergence as the world's richest man illustrates the power of compound interest. Warren neither pays nor makes management charges. The effect is larger than you would believe possible.

The analytic mind argues that those promoting incomprehensible financial products or military invasions must either be liars or fools. But neither need be. Beliefs and values that matter are local, not global; subjective, not objective; and to question the prevailing culture is to exclude yourself from the group.

Asset prices are a measure less of our wealth than of our propensity for self-congratulation. The net effect is only a transfer between the existing owners and the prospective owners.

In politics, business and finance, as on the seas, the hero is the person who tackles a problem, rather than the person whose actions prevent the problem arising.