Tag Archives: Investments

The Investing Edge: The Win / Pay Odds Gap

Investing is too often looked at using a handful of academic models. Successful investing involves thinking about the investment process in as many different ways as possible. This article takes a look at investing using alternative views. From Betting to Investing Many of the ideas used by the investment community are adopted from the horse…

Dubai Financial Markets Investor Structure Improving

My foray into DFM’s historical data unearthed some interesting nuggets, both of which I consider positive. For the first half of this year, Arab investors, including from the GCC, withdrew a total of AED 1.6 billion from the market while UAE citizens invested a total of AED 421 million. Here is the first interesting bit, the total…

Investors are falling into a liquidity trap in the GCC

I am increasingly hearing of people investing into positions in the markets because they think that the price of a share is cheap due to a decline in the price. The price is not cheap, it is low for a reason. Worse, when these investors enter the market and buy the shares they think they…

Softbank Vision Fund highlights how investors should analyse structures

A Financial Times article recently described the structure of the SoftBank Vision Fund. The details reveal breathtaking audacity in terms of SoftBank laying claim to investor returns without transfer of an equivalent level of risk. To avoid competing accounts, I will use the FT as my source of information, as I am not so much…

Unmasking business shenanigans

I have recently pointed out that one of the warning signs that a business is facing issues is when core revenue, ie revenue from the main business lines, is down but profit is up. Why the combination? Why not simply flag a drop in core revenue? Because it is normal for revenue to fluctuate –…

Board drama, and crunching the numbers on oil

A few weeks ago I pointed out that Etisalat generated earnings of Dh0.97 per share and paid out Dh0.80 per share, which is a payout ratio of 82 per cent. I further pointed out that paying out such a high percentage of profits was consistent with a status quo strategy and inconsistent with an expansion…

Q1 results in the UAE mask less than stellar fundamentals

We have recently seen a flurry of reports regarding the financials for the first quarter of this year. Despite happy headlines, the fundamentals are not good. I will use some examples to show how to dig under the rosy announcements to get a better idea of the situation. Let’s start with the banking sector, the…

Sharpe Enough to Cut You: Misunderstanding Investment Models

Investment management when done with funds appears to have developed permanent blind spots. By being unaware or unconscious of these blind spots, investment managers using funds have quite often performed poorly. The greatest of these blind spots is a set of tools developed by Professor William Sharpe, a Nobel laureate and professor at the Stanford…

Lessons from Allianz’s investment strategies

My co-author today is Karl Happe, chief investment officer of Allianz Global Investors’ Insurance Related Strategies. Although the strategies developed and deployed by Allianz are aimed at the insurance market, there are many important lessons that most investors would benefit from, in particular family offices.