What differentiates a good business that earns a long-term above-average return from a mediocre business that, at best, only earns a return close to its cost of capital? A good business can control its supply while a mediocre business can’t. Take Ferrari. Ferrari has a 24% operating margin with above-average return on capital, higher than […]
Hunting Groundhʌntɪŋ ɡraʊnd/nouna place likely to be a fruitful source of something desired or sought. Imagine if you’re going on a fishing trip, what do you need? You need a location, fishing rods, reels, lures, etc. That’s the plan. But a plan doesn’t equal success. You might catch some fish if you’re lucky, but you’re […]
Here are a few psychological tools that can instantly help you to make better investment decisions. Distancing In 1985, Intel has a tough decision to make: expand its core memory chip business that is rapidly losing money due to heavy competition from Japanese counterparts or bet on their nascent but fast-growing microprocessor business. There was […]
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 […]
Books that should be read more than once. Antifragile: Things That Gain from Disorder While Taleb’s previous two books—Fooled by Randomness and The Black Swan—focused on overconfidence and underestimation of risk, Antifragile is the antidote on how we can reduce fragility and in the process, gain from disorder and randomness. Antifragile provides a view that […]
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 […]