Posts tagged as risk

04 Apr 2009

Equity risk: the inescapable impacts of business conditions

When living through a period of unusual economic instability it is useful to try to unlearn most of what we have learnt as a standard framework for savings and investment, and focus instead on the essential power, unpredictability and unfairness of business. In any form of market economy, business, and only business is the source of both national and personal wealth creation and it is also the source of the sometimes massive changes in economic fortunes between generations, even when the overall trend is for increasing affluence.

read more Insights by Stuart Fowler
04 Mar 2009

Equity risk is everywhere and unavoidable

6th April 2009, MMC Ventures
Presentation by Stuart Fowler and Joseph Clark

read more Events by Joe Clark
28 Feb 2009

Other people’s money: more on bankers’ ‘free option’

My item explaining why bankers can be relied on to bet the bank, because it is not their money, was echoed by an insightful piece from Nassim Taleb in the FT on 25th February. As a finance professor with over 20 years experience as a trader, Taleb is an authority on strategies with regular positive payoffs but occasional catastrophic losses, a central theme of his well-received book ‘The Black Swan: the Impact of the Highly Improbable’. Provided the blow-up can be put off for a few years, traders with participation in the profits and no participation in losses have every incentive to bet the bank. If large bonuses are paid every year it may only requires a few years of deferral of the blow-up to make it pay to play. Moreover, in finance the basis of the profit participation is often only an accounting recognition of a theoretical profit stream spread over a long period, not an actual realised gain.

read more Commentary by Stuart Fowler
20 Feb 2009

The impact of of falling interest rates and dividend cuts on private clients

I gather from other wealth managers that what their clients are finding hardest to bear is not the fall in asset prices but falling income. A big drop in interest income has already occurred but they are probably starting to see some dividend cuts and they fear more of the same. The recession is making clear to individuals and their agents a well-concealed truth that is right up-front in No Monkey Business thinking: income consumed is inherently no different from capital consumed. From this insight, a very different and much clearer approach to decisions about spending and saving starts to take shape naturally.

read more Commentary by Stuart Fowler
08 Feb 2009

Markets don’t destroy wealth, people do

Thursday 19th March 2009
Baltic Exchange, 28 St. Mary Axe, London EC3A 8BH
6.15pm for 6.30 start
Stuart Fowler and Joseph Clark

read more Events by Joe Clark
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