Measure Business Risk

Syafir — Wed, 17 Feb 2010 16:13:03 +0000

The side effect of this “perfect storm” is to destroy the faith, or illusion, digging in the numbers studying the behaviors of others, by measuring the fundamental we can find a formula that allows to quantify and manage risk, they have their than roll the dice, and may justify the payment of a fee. The reaction of managers of savings is to consider the 2010-2012 period as an aberration, after that everything will be as before, but unlike the 10 calendar days that disappeared in 1598 (Gregorian reform) these 3 years do not disappear, and change radically the way that investors behave.
In theory, at this moment in which the investor refuses to take any risk, we should be opportunities to acquire, from the huge “selling for termination of activities “, actions that could later appreciate. There are precedents during the crisis that hit developing countries. But how do we quantify the risk (definition: risk is knowing what you do)? Who has the credibility to give the suggestions? Certainly not the banks that have managed their money even worse those of its customers. Knowing that there is an answer is better than the illusion that somewhere out there. No investor, institutional or private, memories of a similar economic situation current, the outbreak of so many contemporary “bubbles” (subprime mortgages, securitization, derivatives, share prices, private equity etc..) has created a downward spiral that is on impact consumers around the world, the immediate consequence is a contraction of turnovers companies (and, at the aggregate level of GDP), increased unemployment, loss of the holdings, bank loans in pain and so on. To find similar situation should go back to the Great Depression of 1929, and in fact the current indicators of GDP, share prices and global trade are following the same evolution of the time, if the analogy were to continue past a further 24 months before touching the bottom, but at least this time the response of governments is very intense greater and could expect a faster track.
From the perspective of an investor, who presumably have seen their wealth halved the last 12 months, the next few months might be the opportune time to invest in shares. However, the unpredictability of this crisis (or rather, depression) and inability managers of savings – at least – to manage, had the merit of reflecting what are the logics of investment to be applied in the future, any analysis of future needs But after recognizing the mistakes made in the past.

Business and Economic » Private Equity

Measure Business Risk