Boots or analysts stupid?
Sir Nigel Rudd, the chairman of Alliance Boots, thinks that analysts are stupid to have failed to recognise the benefits of the merger of Boots with Alliance Unichem. A look at the returns that Boots shareholders have got suggests the analysts were right. (more…)
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How to read accounts: backwards
There is one old but good piece of advice for investors that is often forgotten. This means start with the notes, then read the main body financial statements, and only then read the the directors’ review and other similar material. (more…)
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Irreligious conflict
Spiegel Online reports that plans by a German public broadcaster to air Muslim mini-sermons, alongside long established Christian and Jewish ones, have been criticised by politicians but welcomed by Church leaders. What better evidence could there be that conflict between religions pales in comparison to that between religion and intolerant secular ideologies?
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Technology confuses everyone
A blog post by a leading IT security expert explains why the market for security products fails because buyers are unable to evaluate products. This is a more striking example than those I presented earlier because it concerns sophisticated professional buyers like banks and intelligence services. (more…)
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Funny search query
Someone got to a page on Money Terms that explains a metric for airline’s capacity by using the following search at MSN search “google airline seats”. Obviously someone had been advised to “google” for the term (more…)
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How to exploit monopolies and distort markets
Here are a few ways in which a company can exploit a strong market position to extend an existing monopoly, eliminate any remaining competition, and extract the greatest revenues at the lowest cost. (more…)
Income inequality and incentives
An article by Robert H Frank on trickle down economics in the NY Times points out that there is little correlation between high earners pay and how hard they work. This is backing for my views on directors pay. (more…)
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How the economy should work
Fabian Tassano has responded to my post on the problems of the emergence of monopolies and oligopolies in more and more markets. He appears to think it is less damaging than I do, and he also wants to know what I think the best alternatives are. (more…)
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Emerging markets, inflation and currency risk
A post at Interactive Investor Blog on the nominal good performance of Zimbabwe’s stock exchange, is a useful reminder of the importance of real returns. This works both ways, and is why equity investors should not worry too much about currency risk. (more…)
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Private monopoly vs public monopoly
The most sane (albeit not against a very high standard) of a number libertarian (or, at any rate, very pro-market) bloggers in Britain that I read, admits that network effects mean that many markets tend to “collapse” into monopolies. I would add that many more markets tend to become oligopolies or cartels. In the face of this, why does he still believe that leaving everything to the markets is the best way to run an economy? (more…)
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