There are two basic, common-sense principles at the heart of finance theory. The first is that risk and return tend to go together, in other words, if somebody offers you an investment which promises to be both low risk and high return there’s probably something wrong with it. And the second … Continued
A particular case of asymmetric information is where one person, who we call the principal, wants to get another person, who we call the agent, to do something on their behalf. This situation is known as the principal-agent problem, or more simply … Continued
Asymmetric information is where two people doing business together have different levels of information about something important to the transaction, meaning that one may be able to take advantage of the other. It is very common in economic life. * Information is … Continued
At the age of eight, in a school with only 70 students, in a small village in the middle of Lincolnshire, a county not famous for much (except Sir Isaac Newton), and in a classroom with a view of a … Continued
Every year is getting shorter, never seem to find the time.Plans that either come to naught or half a page of scribbled lines.Hanging on in quiet desperation is the English way.The time is gone, the song is over, thought I’d … Continued
Be kind, for everyone you meet is fighting a hard battle. Plato (possibly – it is disputed) [I]in the whole world there are really only two problems. [..] One problem is, “you know what you want but you don’t know … Continued
When I was five years old, my mother always told me that happiness was the key to life. When I went to school, they asked me what I wanted to be when I grew up. I wrote down ‘happy’. They … Continued
The City of London is the oldest part of greater London, yet has many of the newest buildings. Tiny, winding medieval streets are preserved next to the latest office blocks, built rapidly on the ruins of older, less efficient blocks … Continued
Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Steve Jobs, Stanford Commencement Speech 2005, about 9 minutes in. (But I’d still recommend an Android phone.) Of all … Continued
This year’s BBC Reith Lectures are being given by the British artist Grayson Perry. Perry gave a summary of his first lecture in the Financial Times last week, on the theme, who decides what makes art good? In a witty, … Continued
Now there’s a look in your eyes, like black holes in the sky – Pink Floyd, Shine on You Crazy Diamond When Roger Waters wrote those words about the band’s former and founder member, Syd Barrett, he was referring to … Continued
It is supposed to be George Bernard Shaw who said that the UK and USA are “two nations divided by a common language.” Long established differences persist. Nobody in the UK says “gotten” anymore, even though it was normal English … Continued
To laugh often and much, to win the respect of intelligent people and the affection of children, to earn the appreciation of honest critics and endure the betrayal of false friends, to appreciate beauty, to find the best in others, … Continued
In economics and finance it is important to be clear about when we’re discussing a stock – the amount of something at a point in time – and when we’re referring to a flow – the volume of something during … Continued
The most irritating words used by management gurus and pundits on management are those which replace existing words that do the job already and those which obfuscate and mislead. There are many such words but the one that currently irritates … Continued