HT: thebreakthrough.org/us-china-climate-deal-underscores-need-for-substantial-energy-innovation
Obama’s climate deal with China is a solar and wind energy fantasy
03 Mar 2015 Leave a comment
in energy economics, entrepreneurship, environmental economics, environmentalism, global warming Tags: carbon neutral economy, China, climate alarmism, global warming, solar energy
What is the survival rate of new small businesses?
02 Mar 2015 Leave a comment
in economic history, entrepreneurship, survivor principle
HT: Do nine out of 10 new businesses fail, as Rand Paul claims? – The Washington Post.
For venture capital start-ups, about three or 4 out of 10 fail; three or 4 out of 10 return the original investment, with the rest offering a substantial profit.
John Bogle on the folly of share market speculation
24 Feb 2015 Leave a comment
in entrepreneurship, financial economics Tags: active investing, efficient markets hypothesis, entrepreneurial alertness, indexed linked investing, passive investing
Entrepreneurial alertness alert: After Rapture Pet Care
23 Feb 2015 Leave a comment
in economics of religion, entrepreneurship Tags: entrepreneurial alertness, hoaxers, spoofs
What were they thinking? NZ government super fund loses the lot on loan to already failing bank in one of the PIGS.
20 Feb 2015 Leave a comment
in economics of bureaucracy, entrepreneurship, financial economics, politics - New Zealand Tags: active investing, corruption, euro crisis, Index of Economic Freedom, junk bonds, passive investing, Portugal, risk diversification, state owned enterprises
A Portuguese bank on the verge of collapse – what were they thinking?
That would have been the response of many newspaper readers this morning upon learning the New Zealand Superannuation Fund has lost nearly $200 million in taxpayers’ cash on a "risk-free" loan it provided to Lisbon-based Banco Espirito Santo (BES) on July 3.
The loan – part of a US$784 million credit package US investment bank Goldman Sachs put together through its Oak Finance vehicle – was made exactly one month before Portugal’s central bank broke up BES and split the country’s biggest lender into two, with one part holding the good assets and the toxic assets placed in the other.
Unfortunately, the Oak Finance loan is now stranded in the so-called "bad bank" following a retrospective law change by the Bank of Portugal.
Christopher Adams: What were they thinking? – Business – NZ Herald News.
This is what the 2015 index of Economic Freedom has to say about Portugal on the rule of law:
In 2013, the OECD expressed concern over Portugal’s reluctance to crack down on foreign bribery, particularly in regard to its former colonies Brazil, Angola, and Mozambique.
Since 2001, Portugal had officially acknowledged only 15 bribery allegations, and there had been no prosecutions. The judiciary is constitutionally independent, but staff shortages and inefficiency contribute to a considerable backlog of pending trials.
Creative destruction versus the Guardian: A £2-a-month levy on broadband could save our newspapers
20 Feb 2015 Leave a comment
in economics of media and culture, entrepreneurship, rentseeking, survivor principle Tags: legacy media, The Guardian
A small levy on UK broadband providers – no more than £2 a month on each subscriber’s bill – could be distributed to news providers in proportion to their UK online readership. This would solve the financial problems of quality newspapers, whose readers are not disappearing, but simply migrating online.
via A £2-a-month levy on broadband could save our newspapers | Media | The Guardian.
Did The Guardian just come out in support of a poll tax? Most people have broadband, so it’s the same practical effect?
Actively managed share funds are on the way out
20 Feb 2015 Leave a comment
in entrepreneurship, financial economics, industrial organisation, survivor principle Tags: active investing, efficient markets hypothesis, passive investing, William F. Shape
After costs, the return on the average actively managed dollar will be less than the return on the average passively managed dollar for any time period.
—William F. Sharpe, 1990 Nobel Laureate
4 out of 5 actively managed fund portfolios underperformed all index fund portfolios in all scenarios tested.
via The tide is turning as investors switch from high-cost, actively managed funds to index funds for lower costs, higher returns » AEI | Carpe Diem Blog » AEIdeas and Mutual Fund Expenses | Lion’s Share.
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Managerial Econ: Top 5 problem-solving mistakes by MBA’s
19 Feb 2015 Leave a comment
in entrepreneurship, industrial organisation, managerial economics, organisational economics, personnel economics, survivor principle Tags: entrepreneurial alertness, management, MBA
“Avoid jargon” because most people misuse it. Force yourself to spell out what you mean in simple plain English. It will help your thinking and communication.
“What about the organizational design?” Figure out what is causing the problem, and then think about how to avoid the problem. A lot of papers identified a bad decision, and then suggested reversing it. But they neglected to address the issue of why the bad decision was made, and how to make sure the same mistakes wouldn’t be made in the future.
“Don’t define the problem as the lack of your solution.” For example, if the problem is “the lack of centralized purchasing,” then you are locked into a solution of “centralized purchasing.” Instead, define the problem as “high acquisition cost” and then examine “centralized purchasing” vs. “decentralized purchasing” (or some other alternative) as two solutions to the problem.
“What is the trade-off?” Every solution has costs as well as benefits. If you list only the benefits, it makes your analysis seem like an ex post rationalization of a foregone decision, rather than a careful weighing of the benefits and costs. If you spent some time thinking through the tradeoffs, show it. If not, then you should.
“Which language is this?” I write this when I get gobbledygook written in the passive voice with big words that don’t mean anything. Instead write simple declarative sentences that clarify rather than obfuscate. Form is not a substitute for content.
via Managerial Econ: Top 5 problem-solving mistakes by MBA’s.
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