Your idea of success is completely wrong

There is this idea that success is 100% correct decision making. For some people, they understand this to be 90% or even 80% correct decision making. This idea is completely wrong. A success rate of 56%, implying 44% incorrect decisions, is a great result. Here’s why. Let’s simplify things. Assume that you are the chief executive of a company…

Chelsea Football Club Innovates Financially

I just found out that Chelsea Football Club is applying ideas from financial leasing to their football player lending programme. I was shocked. The analysis is quite interesting. To me at least. The movie Moneyball, based on the book by the same name, showcased the use of financial ideas in sports, in this particular case baseball. There…

Your stop loss orders aren’t guaranteed to protect you

Speaking of trading, I want to talk about certain trading misconceptions. I recently talked about the liquidity trap that some investors were getting themselves into when investing in illiquid stocks. The issue is not an investment issue but a trading issue that can greatly affect the overall IRR. In discussions about this trading trap some…

The UAE’s banking paradox

In this section I look at the UAE banking system and come to some startling conclusions. It seems that banks are grabbing market share in a market with deteriorating margins and increased risks. Last week I took a look at Union National Bank’s Q2 financial results. The focus was to look beyond the headline numbers and try…

Analysing Abu Dhabi Investment Authority’s Performance

Last year I did a bit of complex analysis, mostly trying to estimate returns, to understand Adia’s 7.5% 30 year internal rate of return (IRR) ending in 2015. This year I will make it easier. Adia’s 2016 30-year IRR was reported as 6.9%. Did Adia perform poorly in 2016? It is difficult to tell as there…

Dana Gas seems confused about sukuk pricing

Dana Gas’s CEO thinks his sukuk coupons are above market even though the sukuk price is below market. This is inconsistent. I am not discussing any Sharia law issues here, just the simple dynamics of the bond (including sukuk) market. This opinion is based on an article in The National. According to Dana Gas’s CEO the…