The mistake we often make when valuing a stock is overestimating the business growth potential, how much free cash flow it can generate, and so on. We extrapolate a spurt of excellent performance caused by temporary changes such as a brief supply and demand tailwind into the distant future. Or sometimes, we just fail to […]
Our intuition works like this: Decision → Outcome (feedback) → Better Decision You burn your hand (outcome) after touching a hot stove (decision) or place your feet on the brake (decision) slows down the car (outcome), we use outcomes as feedback to change our actions and make better future decisions. But there’s a caveat. In […]
4 February 2020 UK SFO (Serious Fraud Office) had implicated AirAsia directors/staffs on 31 Jan 2019 for involvement in bribery allegations with Airbus. Below are the key points. You can also refer to the links below for further readings. SFO enters into €991m DPA (Deferred Prosecution Agreement) with Airbus. Improper payment consists of $50m to […]
In tennis, winners in amateur level competitions are often those that make the least number of unforced errors. The same can be said with investing. The number of mistakes you make (and the losses on each of them) determines your long-term return more than how much you make when you win. There are two […]
Thinking in Systems Systems are like Russian nesting dolls—a system that has its own subsystems is also part of a larger system which is part of another larger system. As an example, a supply chain consists of many different industries where within each industry, sit hundreds of companies. Each of these companies is further made […]
Philip Tetlock spent 30 years exploring what makes someone a superforecaster (not the ones you see on TV). In his book Superforecasting, he distills his work into several commandments on how we can improve our judgment without any complex algorithm. 1. Triage: Focus on questions where your hard work is likely to pay off […]