jerryking + risks   170

He Grew Up on a Farm. Now, He Helps Protect Them.
Oct. 3, 2019 | The New York Times | By Norman Mayersohn.

Books: Warren Buffett biography, “Buffett: The Making of an American Capitalist,”

Few livelihoods offer as many paths to failure as agriculture. Throughout history, farmers have been at the mercy of nature — be it weather, pests or crop diseases — even as the survival of people and livestock depended on their success...... Thomas Njeru, is a co-founder and the chief financial officer of Pula, a four-year-old microinsurance firm that serves 1.7 million smallholder farms of 0.6 acres or less in 10 African countries and India. Microinsurance — think of it as an offshoot of the microloan programs that kick-start businesses in impoverished areas — provides protection for low-income individuals who do not have access to conventional coverage....Pula, based in Nairobi, Kenya, partners with government agencies and loan providers to cover the cost of the insurance, which is included in the price of seed and fertilizer; there is no direct charge to the farmer. Among the coverages Pula provides is weather index insurance to cover failures of seed germination, using satellite data to determine whether there has been sufficient rainfall. Longer-term coverage, called yield index insurance, compensates farmers with replacement supplies in the event of a poor harvest......People in Africa don't invest in agriculture because the chance of them losing their money due to the vagaries of the weather is huge.........Pula’s mission is to give farmers confidence by providing risk mitigation. Our solutions protect a farmer’s investment by pairing it with insurance. We build business cases to persuade Fortune 500 companies, seed and fertilizer suppliers, lending institutions, and governments in Africa, that embedded insurance will help deliver better results for both businesses and food security....The sad reality is that farmers are one drought or one disease outbreak away from sliding into absolute poverty......the penetration of agriculture insurance in Africa is less than 1 percent. The reason is that insurance companies’ business models are not set up to serve the unique needs of smallholder farmers......scaling Pula’s business model to the point that insured seed and fertilizer become ubiquitous in the market......The average annual insurance premium per farmer is about $3 to $5. This includes the cost of product development, pricing, underwriting, claim adjustment and, of course, the claim costs. We use artificial intelligence, mobile-based registration systems, remote sensing and automation tools...Agriculture insurance is a cemetery of pilots and trials..
Africa  agriculture  behavioral_change  books  Bottom_of_the_Pyramid  crop_insurance  farming  insurance  Kenya  low-income  microfinance  mobile_applications  poverty  precarious  Pula  seeds  smallholders  start_ups  risks  risk-mitigation  Warren_Buffett  weather 
10 days ago by jerryking
Opinion | America’s Risky Approach to Artificial Intelligence
October 7, 2019 | The New York Times | By Tim Wu
Mr. Wu is the author of “The Master Switch: The Rise and Fall of Information Empires.”

The brilliant 2014 science fiction novel “The Three-Body Problem,” by the Chinese writer Liu Cixin, depicts the fate of civilizations as almost entirely dependent on winning grand races to scientific milestones. Someone in China’s leadership must have read that book, for Beijing has made winning the race to artificial intelligence a national obsession, devoting billions of dollars to the cause and setting 2030 as the target year for world dominance. Not to be outdone, President Vladimir Putin of Russia recently declared that whoever masters A.I. “will become the ruler of the world.”..... if there is even a slim chance that the race to build stronger A.I. will determine the future of the world — and that does appear to be at least a possibility — the United States and the rest of the West are taking a surprisingly lackadaisical and alarmingly risky approach to the technology........The plan seems to be for the American tech industry, which makes most of its money in advertising and selling personal gadgets, to serve as champions of the West. Those businesses, it is hoped, will research, develop and disseminate the most important basic technologies of the future. Companies like Google, Apple and Microsoft are formidable entities, with great talent and resources that approximate those of small countries. But they don’t have the resources of large countries, nor do they have incentives that fully align with the public interest...... The history of computing research is a story not just of big corporate laboratories but also of collaboration and competition among civilian government, the military, academia and private players both big (IBM, AT&T) and small (Apple, Sun)......Some advocates of more A.I. research have called for a “Manhattan project” for A.I. — but that’s not the right model. The atomic bomb and the moon rocket were giant but discrete projects. In contrast, A.I. is a broad and vague set of scientific technologies that encompass not just recent trends in machine learning but also anything else designed to replicate or augment human cognition.....the United States government should broadly fund basic research and insist on broad dissemination..... the United States needs to support immigration laws that attract the world’s top A.I. talent. The history of breakthroughs made by start-ups also suggests the need for policies, like the enforcement of antitrust laws and the defense of net neutrality, that give small players a chance.... the computer scientist and entrepreneur Kai-Fu Lee, in his book “AI Superpowers: China, Silicon Valley, and the New World Order,” describes a race between China and Silicon Valley, as if the latter were the sum total of Western science in this area. In the future, when we look back at this period, we may come to regret the loss of a healthy balance between privately and publicly funded A.I. research in the West, and the drift of too much scientific and engineering talent into the private sector.
antitrust  ARPA  artificial_intelligence  Beijing  Bell_Labs  Big_Tech  China  China_Rising  FAANG  high-risk  immigration  industrial_policies  Kai-Fu_Lee  Manhattan_project  publicly_funded  R&D  risks  science_fiction  Silicon_Valley  talent  Tim_Wu  Vladimir_Putin  Xerox 
11 days ago by jerryking
Ikea dismantles tradition to seek inspiration from car industry
October 2, 2019 | Financial Times Richard Milne in Oslo.

Sometimes the complexity of their own companies can surprise top managers. Torbjorn Loof, chief executive of the owner of the Ikea brand, looks wide-eyed as he describes how the furniture retailer has nearly 100 different cabinets, sometimes with only 4-5 millimetres difference between models.

In storage solutions it has Pax wardrobes, Godmorgon bathroom cabinets, Metod in the kitchen and Besta in the living room — similar products but with subtly different heights or widths, making things difficult not just for the customer but also for Ikea itself.

So the world’s largest furniture retailer has looked to the car industry for inspiration. Platforms have dramatically changed the process of making cars — different models with vastly different pricing can be built on the same basic chassis. Changes are made between models on the things customers see — like the dashboard and entertainment systems — but much of the back-end that is invisible to drivers can be common.

Now Ikea is looking to bring platforms into home furnishing....Ikea is experimenting with city-centre and smaller shops as well as services such as home delivery and assembly. It is looking into renting out furniture instead of selling it, and smart home technology that brings it up against Silicon Valley.

Its platform initiative is one of its most important, albeit largely invisible to customers. Much still remains to be worked out such as just how much is common between different products — a dilemma recognisable from the car industry where Volkswagen faced complaints that there was little difference between VW and Skoda models except for the price.....standardisation should lead to lower prices for both it and customers. ....“How can we scale up in an efficient way? It’s difficult if we make each product uniquely. With platforms, it’s easier to adjust to new markets,” ...The new approach is not without risks though. Developing new platforms can be a costly business and in the car industry has often led to just as much complexity as before, particularly in companies like VW that are known for overengineering their vehicles, or confusion among consumers as to how big a difference there is between supposedly rival products.

Mr Loof is aware of the problem. “We need to define what makes sense to have on the platform and what not,” he says. “If you go too far you can arguably say you have decreased your range offer.”....for the furniture group, facing the same rapid changes in the retail landscape that have caused dozens of brands to fail, there is a feeling that it needs to do as much as it can even if it is likely to have failures on the way.
automotive_industry  CEOs  complexity  furniture  home_furnishing  Ikea  inspiration  platforms  retailers  risks  small_spaces  standardization  Torbjörn_Lööf 
16 days ago by jerryking
Why Can’t We Stop Pancreatic Cancer?
Sept. 23, 2019 | The New York Times | By Jane E. Brody.

Although pancreatic cancer is a relatively uncommon malignancy, accounting for only 3 percent of life-threatening cancers over all, it is one of medicine’s most challenging. Aside from avoiding smoking, obesity and Type 2 diabetes, there is little a person can do to prevent it, and there is nothing comparable to mammography or colonoscopy to screen for it in seemingly healthy individuals when it is most amenable to cure.

Among the small minority of patients — like Justice Ruth Bader Ginsburg — who are cured of this disease, it is nearly always discovered accidentally at a very early symptom-free stage during an unrelated medical procedure. By the time this cancer produces symptoms, it has nearly always spread beyond the pancreas. In fact, surgery is a treatment option in relatively few patients because the cancer is usually already too advanced at diagnosis for surgery to have survival value......A large part of the problem with early detection lies with the location and size of this vital organ. The pancreas is a source of enzymes that facilitate digestion and of the hormone insulin that regulates blood sugar, making it available to tissues for energy. It is a mere six inches long sitting deep in the abdomen behind the stomach and surrounded by the spleen, liver and small intestine.

Therefore, you’d be unlikely to feel the presence of a small pancreatic tumor, and any early symptoms that might result from one, such as loss of appetite, are easily attributed to something far less ominous. Nor would you or an examining doctor be able to notice a premalignant lesion, as can happen with cancers of the cervix, colon and skin.........Further complicating early detection is the speed at which pancreatic cancer seems to progress. According to Dr. Lennon and coauthors, recent study findings “suggest that early stage pancreatic cancers often invade the veins, which drain directly to the liver and result in early metastatic spread,” which may explain why only 10 percent of patients have localized disease at diagnosis.......Meanwhile, it may help extend survival in some people if they recognize symptoms of pancreatic cancer and act on them without delay. Possible symptoms include loss of appetite, abdominal pain that radiates to the back, new-onset diabetes in someone over 50, jaundice, itchy skin, a change in how alcohol tastes, and pale odd-smelling feces that float.
cancers  risks  diabetes  howto  pancreas  risk_factors  symptoms 
26 days ago by jerryking
We need to be better at predicting bad outcomes
September 2019 | Financial Times | by Tim Harford.

A question some of us ask all too often, and some of us not often enough: what if it all [jk: our plan] goes wrong?.....we don’t think about worst-case scenarios in the right way......
The first problem is that our sense of risk is pretty crude. The great psychologist Amos Tversky joked that most of us have three categories when thinking about probabilities: “gonna happen”, “not gonna happen” and “maybe”.....It would be helpful if our sense of risk was a little more refined; intuitively, it is hard to grasp the difference between a risk of one in a billion and that of one in a thousand. Yet, for a gambler — or someone in the closely related business of insurance — there is all the difference in the world.....research by Barbara Mellers, Philip Tetlock and Hal Arkes suggests that making a serious attempt to put probabilities on uncertain future events might help us in other ways: the process makes us more humble, more moderate and better able to discern shades of grey. Trying to forecast is about more than a successful prediction......we can become sidetracked by the question of whether the worst case is likely. Rather than asking “will this happen?”, we should ask “what would we do if it did?”

The phrase “worst-case scenario” probably leads us astray: anyone can dream up nightmare scenarios.....To help us think sensibly about these worst-case possibilities, Gary Klein, psychologist and author of Seeing What Others Don’t, has argued for conducting “pre-mortems” — or hypothetical postmortems. Before embarking on a project, imagine receiving a message from the future: the project failed, and spectacularly. Now ask yourself: why? Risks and snares will quickly suggest themselves — often risks that can be anticipated and prevented.......Contingency planning is not always easy......woes that would result both as the “base case” (the truth) and a “worst-case scenario” (the government sucking in its stomach while posing for a selfie).
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In our increasingly airbrushed world, it becomes ever more necessary to ask the unfashionable questions like ‘what could possibly go wrong?’ - and then plan for it...
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Humanity's survival may well rely on the ability of our imaginations to explore alternative futures in order to begin building the communities that can forestall or endure worst-case catastrophes.
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Amos_Tversky  anticipating  base_rates  beforemath  books  contingency_planning  discernment  failure  forecasting  foresight  frequency_and_severity  humility  nuanced  predictions  preparation  probabilities  risk-assessment  risks  Tim_Harford  uncertainty  worst-case 
27 days ago by jerryking
What You Need to Know to Pick an IPO
April 7, 2019 | WSJ | By Andy Kessler.
Dig up dirt on the competition and board members, and buy to hold long-term.......How do you know which IPOs to buy? No, not to trade—you’d never get it right. Lyft priced at $72, traded at $85 on its first day, then closed at $78, only to fall to $67 on its second day. It’s now $74. I’m talking about buying and holding for a few years. Yes I know, how quaint.

The trick is to read the prospectus. What are you, crazy? That’s a couple hundred pages. Well, not the whole thing. But remember, where the stock trades on its first day is noise....... So understanding long-term prospects are critical. Here are a few shortcuts.

(1) First, glance at the underwriters along the bottom of the cover. On the top line are the banks putting their reputation on the line. If the one on the far left is Goldman Sachs , Morgan Stanley or JPMorgan , you’re probably OK.
(2) open the management section and study the directors. Forget the venture capitalists or strategic partners with board seats—they have their own agendas. Non-employee directors are the ones who are supposed to be representing you, the public investor. And their value depends on their experience.
(3) OK, now figure out what the company does. You can watch the roadshow video, look at prospectus pictures, and skim the offering’s Business section. Now ignore most of that. Underwriters are often terrible at positioning companies to the market.......when positioning companies, only three things matter: a monster market; an unfair competitive advantage like patents, algorithms or a network effect; and a business model to leverage that advantage. Look for those. If you can’t find them, pass. Commodities crumble........read the Management’s Discussion and Analysis. Companies are forced to give detailed descriptions of each of their sectors and products or services. Then flip back and forth to the Financials, looking at the items on the income statement and matching them up with the operations being discussed. Figure out what the company might look like in five years. And use my “10x” rule: Lyft is worth $25 billion—can they make $2.5 billion after-tax someday? Finally there’s the Risk section, which is mostly boilerplate but can contain good dirt on competition.
(4) Put the prospectus away and save it as a souvenir. Try to figure out the real story of the company. Do some digging.
(5) My final advice: Never, ever put in a market order for shares on the first day of an IPO.
10x  advice  algorithms  Andy_Kessler  boards_&_directors_&_governance  business_models  competitive_advantage  deception  due_diligence  howto  IPOs  large_markets  long-term  Lyft  network_effects  noise  patents  positioning  prospectuses  risks  stock_picking  think_threes  Uber  underwriting  unfair_advantages 
april 2019 by jerryking
Nortel hacking went on for years
FEBRUARY 14, 2012 | FT Alphaville | By Joseph Cotterill.
Chinese hackers had undetected access to sensitive Nortel data for almost a decade from 2000, the WSJ reports. The extent to which Nortel, the once-mighty telecoms giant, was compromised shows the lack of corporate defences against hacking. Nortel didn’t disclose its hacking problem to buyers of its assets. Spy software was so deeply embedded in Nortel computers that investigators failed to spot its existence for years. The SEC last year began pushing companies to classify serious cyber attacks on their infrastructure as “material risks” that may require financial disclosure.
China  Chinese  cyberattacks  cyber_security  cyberintrusions  disclosure  hackers  Nortel  regulators  risks  SEC 
march 2019 by jerryking
Grand follies and the art of thinking big
February 22, 2019 |Financial Times| by Janan Ganesh.

Who would rather that Airbus had never made the bet at all? Who would live in a world that never risks over-reach?

A defender of grand follies is spoilt for examples that turned out well........Today’s vainglorious travesty is tomorrow’s untouchable fixture of the landscape. We are lousy judges of future tastes, including our own....Even if an audacious project fails, and fails lastingly, it can still trigger success stories of other kinds. Some of this happens through the sheer technical example set: the A380, like Concorde before it, forced engineers to innovate in ways that will cascade down the decades in unpredictable ways. Some of the most banal givens of daily life — dust busters, wireless headsets — can be traced back to that messianic project we know as the space programme.

Then there is the inspiring spectacle of just trying to do something big. Progress through tinkering counts no less than progress through great leaps, but only the second kind is likely to electrify people into venturing their own efforts. Without the grand gesture — and the risk of humiliation — any field of endeavour is liable to stagnate.....Perhaps an exhausted west now prefers to tinker all the same. Big ideas are often paid for out of idle wealth (think of Elon Musk’s fortune, or Alphabet’s cash pile) and the existence of this can seem almost distasteful in a culture that is newly sensitive to inequality. As for largeness of vision, there was plenty of the stuff in the forever wars and pre-crash banking. It would be strange if people who lived through those events did not now flinch at the sight of excitable visionaries brandishing schemes.
Airbus  audacity  big_bets  breakthroughs  Elon_Musk  fallacies_follies  game_changers  humiliation  incrementalism  inspiration  Janan_Ganesh  Jeff_Bezos  marginal_improvements  moonshots  overreach  risks  thinking_big  tinkerers  visionaries 
february 2019 by jerryking
Why boring government matters
November 1, 2018 | | Financial Times | Brooke Masters.

The Fifth Risk: Undoing Democracy, by Michael Lewis, Allen Lane, RRP£20, 219 pages.

John MacWilliams is a former Goldman Sachs investment banker who becomes the risk manager for the department of energy. He regales Lewis with a horrific catalogue of all the things that can go wrong if a government takes its eye off the ball, and provides the book with its title. Asked to name the five things that worry him the most, he lists the usual risks that one would expect — accidents, the North Koreans, Iran — but adds that the “fifth risk” is “project management”.

Lewis explains that “this is the risk society runs when it falls into the habit of responding to long-term risks with short-term solutions.” In other words, America will suffer if it stops caring about the unsung but vital programmes that decontaminate billions of tonnes of nuclear waste, fund basic scientific research and gather weather data.

That trap, he makes clear with instance after instance of the Trump administration failing to heed or even meet with his heroic bureaucrats, is what America is falling into now.

We should all be frightened.
books  book_reviews  boring  bureaucracy  bureaucrats  cynicism  government  Michael_Lewis  public_servants  risks  technocrats  unglamorous  writers  short-term_thinking  competence  sovereign-risk  civics  risk-management 
november 2018 by jerryking
Passive investing is storing up trouble
August 2, 2018 | Financial Times | by Megan Greene.

I was recently informed by the owner of an artificial intelligence fund that markets do not listen to economists any more. .....A fundamental shift in market structure towards rules-based, passive investing over the past decade means a lot of trading is no longer based on fundamentals. But just because some markets do not pay attention to economists, it does not mean economists should not pay attention to these markets........AI quant funds are not waiting on tenterhooks for analysis of every non-farm payrolls report, Fed press conference, Donald Trump tweet, or earnings report. Instead, they look for trading strategies that are succeeding and adopt those strategies until a better one comes along, regardless of the underlying fundamentals. But what happens when the strategy suddenly becomes to sell everything? Will the computers find the buyers they need?.......ETFs, often set up to mimic an index, have to buy more of equities rising in price, sending those stock prices even higher. ETFs similarly ignore fundamentals.....This creates a piling-on effect as funds buy more of these increasingly expensive stocks and less of the cheaper ones in their indices...Risks of a bubble arise when there is no regard for underlying fundamentals or price. It is reasonable to assume a sustained market correction would lead to stocks that were disproportionately bought because of ETFs and index funds being disproportionately sold.

But again, in a crisis will the ETF managers find liquid markets? ....Passive investors and quant funds could also threaten the economy by making markets vastly more complex, noisy and opaque. They send mixed signals to active investors about what the fair value of a stock is. That could cause a significant misallocation of capital.

The danger is exacerbated by the speed at which trading is now done. The average holding period for a security on the New York Stock Exchange has fallen from two months in 2008 to just under 20 seconds today.......Systemic failures, misallocation of capital and dried up liquidity could cause a bear market, dragging on growth when the economic backdrop is already lacklustre......So even though passive investors ignore economists, economists should pay attention to risks posed by the shift in market structure they represent....This is not to say that index funds, ETFs and AI quant funds are necessarily bad. But the real test will come when there is a sudden crisis followed by a sustained bear market.
active_investing  artificial_intelligence  bear_markets  economists  ETFs  holding_periods  index_funds  investing  liquidity  misallocations  NYSE  passive_investing  piling_on  risks  systemic_failures  rules-based  bubbles  quantitative  market_fundamentals  crisis  dark_side  pay_attention 
august 2018 by jerryking
How to Minimize Pancreatic Cancer Risk - The New York Times
By Jane E. Brody
July 23, 2018

In most of the approximately 6 percent of five-year survivors, pancreatic cancer is discovered early quite by accident, usually during a scan or surgery for some other reason.....The pancreas is a small two-part glandular organ — about 7 inches long and 1.5 inches wide — lying in the upper abdomen behind the stomach. It performs two vital functions. One part of the gland is a source of digestive enzymes and the other part produces the hormones insulin and glucagon that control blood levels of glucose and fatty acids.

Some known risk factors for pancreatic cancer are beyond an individual’s control: older age, being an African-American or Ashkenazi Jew and having two or more first-degree relatives (parents or siblings) who have had the cancer.

But it is the modifiable risk factors that are currently of greatest concern. Aside from tobacco smoking, which accounts for 20 percent to 25 percent of pancreatic cancers even as this risk factor continues to decline, the main risks for pancreatic cancer cases and deaths are obesity, Type 2 diabetes and metabolic syndrome, all of which have risen to epidemic levels in recent years.....be alert to the possibility of hidden cancer in patients newly diagnosed with diabetes who are 50 or older, have no family history of the disease, are losing weight and their diabetes is not controlled by oral medication......Early diagnosis is vital because pancreatic cancer is highly resistant to most therapies and often recurs after surgery. Currently, only 20 percent of cancers are even eligible for surgery, she said. The pancreas is next to very large blood vessels and when the tumor involves them, it cannot safely be removed.

One bright spot for people with diabetes: The drug metformin, often used by patients to help control blood sugar, has in some studies been associated with a reduced risk of pancreatic cancer and improved survival chances for those who develop the cancer. This drug, which has also been linked to longevity and healthy aging, is an inexpensive generic with an excellent safety record.
cancers  risks  diabetes  howto  pancreas  risk_factors 
july 2018 by jerryking
Risk Management Reports
This site can’t be reached
http://www.riskinfo.com/rmr/rmrdec97.html is unreachable.
Search Google for risk info rmr amrdec 97

December 1997 Volume 24, No. 12. The trick in risk management,
perhaps, is in recognizing that normal is not a (default) state of nature but a
state of transition, and trend is not destiny. . . ." (Sept. 1, 1997). Peter Bernstein
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
John Adams, author of Risk University College London Press, London, 1995
Peter_Bernstein  risk-management  risks  book_reviews  base_rates  ephemerality  transient  impermanence  trends  transitions  normality  quotes  from notes
april 2018 by jerryking
Knowing what we don’t know is an important investing skill,
DECEMBER 19, 2017 | The Globe and Mail | Scott Barlow, Globe and Mail market strategist.

"Making short-term predictions about how a price chart reflecting the actions of millions of people will fluctuate is more than just hard. The word Mandelbrot uses is "unpredictable" rather than difficult. Again: not predictable… Mandelbrot is not saying that investors should throw their hands in the air and quit, but rather that they should use the tools of probability in a more refined and nuanced way… Risk comes from now knowing what you are doing and avoiding those areas [that are inherently unpredictable] is a very good thing."

Mr. Mandelbrot's concepts do not make for easy reading and I don't pretend to understand even a majority of their implications. It is important, I think, for investors to have a general understanding of his findings nonetheless.

For one thing, Mr. Mandelbrot's work throws a huge wrench into Modern Portfolio Theory, the highly popular efficient frontier investing strategies that use distribution curves and standard deviation as a measure of risk. As Berkshire Hathaway's Charlie Munger said, "if you think [distribution curves] apply to markets, then you must believe in the tooth fairy. It reminds me of when I asked a doctor at a medical school why he was still teaching an outdated procedure, and he replied, 'It's easier to teach.' "
investing  risks  financial_markets  investors  Charlie_Munger  unpredictability  pretense_of_knowledge  unknowns 
december 2017 by jerryking
Shopping for the apocalypse
Aug. 26, 2017 | The Financial Times | by Esther Bintliff.

Apocalyptic thinking has always been with us, but its power waxes and wanes. "We live in an extremely unstable and insecure time," says Ash Amin, a Cambridge University geography professor who studies urban culture. "Risks are much bigger and globally integrated."

The psychology of prepping rests on this sense of chaos, of needing to assert some control - any control - over an unpredictable reality. There is solace in practical, orderly steps you can tick off a list. Buy a three-day supply of non-perishable food, a few gallons of water, a torch, a multi-tool. Identify your family meeting place, evacuation route, shelter. These are achievable aims.

Many everyday catastrophes, in contrast, are unwieldy and intractable. Rather than arriving with the sudden bloom of a mushroom cloud, they unfold slowly, in quiet, unobtrusive ways. Some 52,000 people died of drug overdoses in the US in 2015, more than from guns or cars, or from HIV/Aids in the year the epidemic reached its height. Mothers, fathers, teens collapsing in shopping aisles and sports pitches is its own kind of Armageddon; most of us feel helpless in its wake.

Of course, calamities do occur. One morning in September 1859, British astronomer Richard Carrington was in his observatory when he saw a white-light solar flare - a huge magnetic explosion on the sun. It was followed by the largest geomagnetic storm ever recorded on Earth. Telegraphs were disrupted across Europe and the US. My husband's fear is of a repeat Carrington event - a severe geomagnetic storm that this time would take down the electrical grid, GPS and satellites. In 2012, scientists suggested that the likelihood of such a storm within a decade was as high as 12 per cent. Worst-case scenario: millions of people, hospitals, businesses without power for months.

Perhaps it's worth preparing for this one-in-eight possibility of chaos. So when is prepping not paranoia - but planning? Tom Martin, founder of the American Preppers Network, which has 35,000 forum members and 230,000 fans on Facebook, tells me: "The definition of a prepper is quite simply 'one who prepares'. So if someone stores extra food and emergency supplies in case of a -disaster, then by definition they are a prepper... It's all varying degrees."..........Amin points out that the emphasis on individual prepping may be misplaced. "Where you find really resilient populations, they often share responsibility with their families and communities. And the history of managing for apocalypse is the history of governmental and infrastructure preparedness."

I take this to mean that instead of building up supplies, we should invite the neighbours round for cake and pressure the government to invest in things such as transport and back-up energy. That's the kind of prepping I can get behind. But I might buy a wind-up radio as well, just in case.
apocalypses  catastrophes  chaos  disasters  disaster_preparedness  emergencies  natural_calamities  power_grid  preparation  readiness  resilience  risks  slowly_moving  survivalists  unwieldy  worst-case  imperceptible_threats  from notes
november 2017 by jerryking
Should the Middle Class Invest in Risky Tech Start-Ups? - The New York Times
Farhad Manjoo
STATE OF THE ART SEPT. 27, 2017

Jason Calacanis, a start-up investor who has bet on Uber and others, cuts an unusual figure in Silicon Valley..... Calacanis’s frankness regarding his tech-fueled riches. He states plainly what many in Silicon Valley believe but are too politic to say — and which has lately been dawning on the rest of the world: that the tech industry is decimating the rest of the planet’s wealth and stability.

Its companies — especially the Frightful Five of Apple, Amazon, Google, Facebook and Microsoft, which employ a select and privileged few — look poised to systematically gut much of the rest of the economy. And while Silicon Valley’s technologies could vastly improve our lives, we are now learning that they may also destabilize great portions of the social fabric — letting outsiders wreak havoc on our elections, fostering distrust and conspiracy theories in the media, sowing ever-greater levels of inequality, and cementing a level of corporate control over culture and society unseen since the days of the Robber Barons.......Calacanis is offering a much more dismal view of the disruptions caused by tech — and a more radical, if also self-serving, plan for dealing with it. To survive the coming earthquake, he advises, you need to radically re-examine your plan for the future — and you need to learn Silicon Valley’s ways rather than expect to defeat it......“Most of you are screwed,” he writes in “Angel,” arguing that a coming revolution in robotics and artificial intelligence will eliminate millions of jobs and destroy the old ways of getting ahead in America. “The world is becoming controlled by the few, powerful, and clever people who know how to create those robots, or how to design the software and the tablet on which you’re reading this.”....His book is intended as a guide for getting into the business of investing in very young tech companies at their earliest stages, known as “angel investing.” Mr. Calacanis is peddling a kind of populist movement for investing — he wants doctors, lawyers and other wealthy people, and even some in the middle class, to bet on start-ups, which he says is the best way to prepare financially for tech change.
Farhad_Manjoo  middle_class  angels  books  Jason_Calacanis  social_fabric  Apple  Amazon  Google  Facebook  Microsoft  Silicon_Valley  financial_advisors  start_ups  risks 
september 2017 by jerryking
SEC Chief Wants Investors to Better Understand Cyberrisk - WSJ
Sept. 5, 2017 | WSJ | By Dave Michaels.

The chairman of the Securities and Exchange Commission said Tuesday that regulators and Wall Street need to do more to educate investors about the serious risks that companies and the financial system face from cyberintrusions.

Jay Clayton, speaking at an event sponsored by New York University’s School of Law, said investors still don’t fully appreciate the threat posed by hackers. “I am not comfortable that the American investing public understands the substantial risk that we face systemically from cyber issues and I would like to see better disclosure around that,” Mr. Clayton said.
SEC  cyber_security  cyberthreats  cyberrisks  risks  hackers  cyberintrusions  regulators  Wall_Street  data_breaches  disclosure  under_appreciated  financial_system 
september 2017 by jerryking
Insurers must do more to educate Canadians about flood risk - The Globe and Mail
ROB WESSELING
Special to The Globe and Mail
Published Monday, May 29, 2017
floods  insurance  Canadian  risks 
may 2017 by jerryking
Nick Bostrom: ‘We are like small children playing with a bomb’
Sunday 12 June 2016 | Technology | The Guardian | by Tim Adams.

Sentient machines are a greater threat to human existence than climate change, according to the Oxford philosopher Nick Bostrom.

Bostrom, a 43-year-old Swedish-born philosopher, has lately acquired something of the status of prophet of doom among those currently doing most to shape our civilisation: the tech billionaires of Silicon Valley. His reputation rests primarily on his book Superintelligence: Paths, Dangers, Strategies, which was a surprise New York Times bestseller last year and now arrives in paperback, trailing must-read recommendations from Bill Gates and Tesla’s Elon Musk. (In the best kind of literary review, Musk also gave Bostrom’s institute £1m to continue to pursue its inquiries.)
artificial_intelligence  dangers  books  Oxford  risks  machine_learning  deep_learning  catastrophic_risk  existential 
march 2017 by jerryking
Cyber Heroes | Ivey Alumni | Ivey Business School
Craig believes that businesses and individuals, even countries, must accept that we live in an “era of compromise.” “You have to understand that somebody already has your sensitive data, likely a former employee,” he says. “Have you rehearsed roles for when that becomes public? Does the CEO know what she needs to say? Does the IT team know what they need to do? Being prepared with an appropriate response to data loss is a leading practice that helps maintain, or even build, an organization’s reputation.”
Ivey  alumni  cyber_security  vulnerabilities  insurance  data_breaches  risks  business-continuity 
march 2017 by jerryking
Machine learning, algorithms drive this advertising company’s growth - The Globe and Mail
MARK BUNTING
Special to The Globe and Mail
Published Wednesday, Mar. 08, 2017

What is programmatic advertising?

Canadian company AcuityAds Holdings Inc. (AT-X) is at the forefront of that transformation. It specializes in what’s called programmatic advertising where algorithms are used to allow advertisers to target, connect with, and accumulate data about their campaigns and their audiences. One of AcuityAds’ co-founders has a PhD in machine learning and algorithms. It’s one of the reasons the company believes its patented technology stands out from its peers.....
A happy advertiser spends more money

“The whole idea was build the algorithm in a way that delivers a positive ROI for clients,” Mr. Hayek says. “As long as they get a positive ROI, they’re going to spend more with us. And that’s proven itself to be a very good concept because we deal with advertisers. When they make money using our system, they’re very happy and they spend more money on our systems.”

Risks

Is Mr. Hayek concerned that in the fast-growing, rapidly changing sector in which AcuityAds operates, a new technology or unforeseen competitor could emerge to disrupt its model?

“Digital advertising is an $83-billion (U.S.) market place. $51-billion out of that is already programmatic,” Mr. Hayek explains. “All the pipes are already built, it was a fundamental shift that this is how we do this kind of business.”
machine_learning  algorithms  ad-tech  advertising  programmatic  risks 
march 2017 by jerryking
Emerging markets offer clue for investors in 2017
December 31/January 1 2017 | Financial Times | by Gillian Tett.

Now (people = politicians = capriciousness/alternatively, unpredictable waves of populism) are shaping events, not established party platforms or policy programmes....the pricing of political uncertainty has moved from being an emerging market phenomenon to an emerged market issue....Is there any way for investors to adapt to this new world? ....(1) Start by abandoning the idea that asset values can be predicted by using neat economic models alone. ...investors urgently need to think about the difference between "risk" (i.e. events that can be predicted with a certain probability) and "uncertainty" (i.e. unknown future shocks). Until now, investors in developed markets have tended to focus primarily on risks and assume that these can be priced (and hedged against). But 2017 is likely to produce uncertainty. That cannot be easily priced or hedge--and investors should recognize this. (2) Investor should also embrace "optionality": the only way to prepare for a world of uncertainty is to stay as flexible and diversified as possible. Now is not the time for investors to put all their eggs in one basket, or bet on just one asset class. Nor is it time for businesses to be locked into rigid business plans: political and geopolitical upheaval could strike almost anywhere. (3) If 2017 does deliver more risk and uncertainty, expect financial markets to be "skittish" about "news" of all types, and not just economic....Bad news for those who despise market volatility (expectation: we're in for volatility like we've never seen before)....Uncertainty can deliver huge opportunity alongside risks..."good" surprises....Surviving 2017 in the developed economies requires that investors use tools beyond those found in the realm of economics: psychology, sociology and political science. Also, talk to successful emerging market investors to find out how they practice their craft.
concentration_risk  Gillian_Tett  emerging_markets  political_risk  unpredictability  Brexit  investors  Donald_Trump  uncertainty  risks  optionality  geopolitics  financial_markets  politicians  volatility  tools  economics  psychology  sociology  political_science  FT  institutions  rule_of_law  Gary_Cohn  populism  indicators  human_factor  assets  asset_values  asset_classes  diversification  dislocations  bad_news 
january 2017 by jerryking
At BlackRock, a Wall Street Rock Star’s $5 Trillion Comeback - The New York Times
SEPT. 15, 2016 | NYT | By LANDON THOMAS Jr.

(1) Laurence Fink: “If you think you know everything about our business, you are kidding yourself,” he said. “The biggest question we have to answer is: ‘Are we developing the right leaders?’” “Are you,” he asked, “prepared to be one of those leaders?”

(2) BlackRock was thriving because of its focus on low-risk, low-cost funds and the all-seeing wonders of Aladdin. BlackRock sees the future of finance as being rules-based, data-driven, systematic investment styles such as exchange-traded funds, which track a variety of stock and bond indexes or adhere to a set of financial rules. Fink believes that his algorithmic driven style will, over time, grow faster than the costlier “active investing” model in which individuals, not algorithms, make stock, bond and asset allocation decisions.

Most money management firms highlight their investment returns first, and risk controls second. BlackRock has taken a reverse approach: It believes that risk analysis, such as gauging how a security will trade if interest rates go up or down, improves investment results.

(3) BlackRock, along with central banks, sovereign wealth funds — have become the new arbiters of "flow.“ It is not about the flow of securities anymore, it is about the flow of information and indications of interest.”

(4) Asset Liability and Debt and Derivatives Investment Network (Aladdin), is BlackRock's big data-mining, risk-mitigation platform/framework. Aladdin is a network of code, trades, chat, algorithms and predictive models that on any given day can highlight vulnerabilities and opportunities connected to the trillions that BlackRock firm tracks — including the portion which belongs to outside firms that pay BlackRock a fee to have access to the platform. Aladdin stress-tests how securities will respond to certain situations (e.g. a sudden rise in interest rates or what happens in the event of a political surprise, like Donald J. Trump being elected president.)

In San Francisco, a team of equity analysts deploys data analysis to study the language that CEOs use during an earnings call. Unusually bearish this quarter, compared with last? If so, maybe the stock is a sell. “We have more information than anyone,” Mr. Fink said.
systematic_approaches  ETFs  Wall_Street  BlackRock  Laurence_Fink  asset_management  traders  complacency  future  finance  Aladdin  risk-management  financiers  financial_services  central_banks  money_management  information_flows  volatility  economic_downturn  liquidity  bonds  platforms  frameworks  stress-tests  monitoring  CEOs  succession  risk-analysis  leadership  order_management_system  sovereign_wealth_funds  market_intelligence  intentionality  data_mining  collective_intelligence  risk-mitigation  rules-based  risks  asset_values  scaling  scenario-planning  databases 
september 2016 by jerryking
Tech Startups Struggle to Close Deals With IT Buyers - WSJ
By ANGUS LOTEN
Aug. 24, 2016

As Haier and other large corporations become increasingly digital, they are spending more time checking out technology offered by small, independent tech firms. Yet startup products and services for enterprises, while more accepted than a few years ago, still face significant resistance on the path toward revenue, CIOs and industry analysts say.

“I won’t take a risk on something that isn’t from a proven enterprise technology company,” especially for key functions, such as sales, human resources, cybersecurity or even office email, said Ms. Johnston. “Some startups are just so cheap or free, you’re nervous to go with it. What if they go out of business?”

Only 23% of 112 large corporations in a recent survey said working with startups was very important, according
customer_adoption  start_ups  large_companies  CIOs  Haier  challenges  cloud_computing  risk-aversion  SaaS  IT  risks 
august 2016 by jerryking
One Firm Getting What It Wants in Washington: BlackRock - WSJ
By RYAN TRACY and SARAH KROUSE
Updated April 20, 2016

The Problem: BlackRock believed that the U.S. Federal Reserve was leaning towards designating it as a source of financial system risk, like other big banks, and as such, be “too big to fail”.

What Was At Stake: the designation “systemically important” would draw BlackRock in for greater oversight by the Federal Reserve which would mean tougher rules and potentially higher capital requirements from U.S. regulators.

The Solution: BlackRock didn't take any chances. The company began spending heavily on lobbying and engaging policymakers. Executives at the firm began preparing for greater federal scrutiny of their business in the months following the 2008 financial crisis. BlackRock aggressively prepared a counter-narrative upon discovered a Treasury Department’s Office of Financial Research report that asset-management firms and the funds they run were “vulnerable to shocks” and may engage in “herding” behavior that could amplify a shock to the financial system. The response took the form of a 40-plus-page paper rebutting the report. The firm suggested that instead of focusing on the size of a manager or fund, regulators should look at what specific practices, such as the use of leverage, might be the source of risks. While other money managers such as Fidelity and Vanguard sought to evade being labeled systemically important, BlackRock’s strategy stood out.
BlackRock  crony_capitalism  Washington_D.C.  risks  lobbying  too_big_to_fail  asset_management  advocacy  government_relations  influence  political_advocacy  policy  U.S._Federal_Reserve  systemic_risks  Communicating_&_Connecting  U.S.Treasury_Department  counternarratives  oversight  financial_system  leverage  debt  creating_valuable_content  think_differently  policymakers  policymaking 
april 2016 by jerryking
From terrorism to technological disruption: Leaders need to tackle risk - The Globe and Mail
DAVID ISRAELSON
Special to The Globe and Mail
Published Wednesday, Jan. 27, 2016

“Not only do they have to think about and worry about economic changes and what their competitors are going to do, they now have a whole new level of political and regulatory risk,” Ms. Ecker says.

“You can’t predict in some cases how a policy maker is going to move. We’re seeing that in China now.”

At the beginning of 2016, as markets began a steep slide in China, that country’s regulators twice activated a “circuit breaker” mechanism to halt trading, only to abandon it after it appeared to make the drop in the market even worse.

The lesson is that sometimes “business practices and even business products that seem acceptable today, for whatever reason, when something happens can be considered things you shouldn’t be doing. There’s more policy unpredictability than ever before,” Ms. Ecker says.

“In an increasingly risky world, a CEO needs to be increasingly flexible and adaptable. You also need to have a team and know what the latest threat might be.”

That isn’t necessarily easy, she adds. “There’s no rule book. When I was in politics, people used to ask me what we should anticipate. I’d tell them, ‘Read science fiction books.’ ”....CEOs in today’s risky world also need people skills that may not have been necessary before, says Shaharris Beh, director of Hackernest, a Toronto-based not-for-profit group that connects worldwide tech companies.

“CEOs have always needed strong skills around rapid decision-making and failure mitigation. In today’s hypercompetitive startup business climate, leaders need two more: pivot-resilience and proleptic consensus leadership,” he says.

“Pivot-resilience is the ability to tolerate the stress of gut-wrenching risks when dramatically shifting strategy. In other words, be able to take the blame gracefully while still warranting respect among your team members.”

Proleptic consensus leadership is especially important for startups, Mr. Beh says. “It’s the ability to garner the team’s support for taking big risks by giving them the assurance of what backup plans are in place should things go sour.”

This consensus building “is how you keep support,” he adds. In a volatile economy, “people can jump ship at any time or even unintentionally sabotage things if they’re not convinced a particular course of action will work.” So you have to constantly persuade.
science_fiction  law_firms  law  risks  CEOs  risk-management  disruption  BLG  leaders  pivots  resilience  consensus  risk-taking  contingency_planning  unpredictability  political_risk  regulatory_risk  policymakers  flexibility  adaptability  anticipating  people_skills  circuit_breakers 
february 2016 by jerryking
Carney, Bloomberg press for climate-change risk disclosure guidelines - The Globe and Mail
SHAWN MCCARTHY
OTTAWA — The Globe and Mail
Published Friday, Dec. 04, 2015

Mr. Bloomberg will lead a task force that will develop voluntary financial risk disclosure guidelines that will ensure consistent information for investors, lenders, insurers and other stakeholders....In a speech this fall at Lloyd’s of London insurance firm, Mr. Carney highlighted three types of threats: physical, or impacts from weather-related events such as floods, droughts and storms; liability issues arising from investors suing companies for failing to disclose risks or parties who suffer loss claiming compensation from those they hold responsible, and transition issues in which assets – especially fossil fuel reserves – are revalued due to the transition to a low-carbon economy.
climate_change  risks  Mark_Carney  Michael_Bloomberg  liabilities  threats  financial_risk  disclosure  valuations 
december 2015 by jerryking
Cyber stickups that retail chiefs should have learnt to fear
31 October/1 November 2015 | FT | Philip Delves Broughton

The risks in retail are now of an entirely different nature....
cyber_security  retailers  data_breaches  CEOs  Philip_Delves_Broughton  hackers  risks  Pentagon  lessons_learned 
november 2015 by jerryking
The test of true political leadership is to risk change - The Globe and Mail
BRIAN MULRONEY
Contributed to The Globe and Mail
Published Thursday, May. 28 2015

The most essential ingredient for any “Big Idea,” however, is leadership.

Leadership that not only anticipates the need for change but is determined to implement change. Not in pursuit of popularity but to serve the national interest.

The test of true leadership hinges on judgments between risk and reward.

Change of any kind requires risk, political risk. It can and will generate unpopularity from those who oppose change. The choice for Canada or the United Kingdom in a fast-changing global environment is either to adapt quickly and take advantage of the changes happening or watch from the sidelines....As Reinhold Niebuhr reminded us: “Nothing worth doing is completed in our lifetime; therefore, we must be saved by hope. Nothing fine or beautiful or good makes complete sense in any immediate context of history; therefore, we must be saved by faith.”(jk: the importance of having a long-term vision & exhibiting faith in pursuing it).

It is in this perspective that great and controversial questions of public policy must be considered.

History tends to focus on the builders, the deciders, the leaders – because they are the men and women whose contributions have shaped the destiny of their nations, here and around the world.

From the bloodied sands of Afghanistan to the snows and waters of the High Arctic, the Canada of 50 years from now will be defined by the leadership we are given today.
Brian_Mulroney  speeches  Oxford  leadership  politicians  Cold_War  9/11  NAFTA  '80s  history  leaders  risks  transformational  courage  political_risk  fast-changing  free-trade  public_policy 
may 2015 by jerryking
Speaking the Language of Risk - NYTimes.com
By CARL RICHARDS MAY 11, 2015.

humans outside the financial world define risk differently. In everyday life, we tend to think of risk as uncertainty, or what is left over after we have thought of everything else.

With uncertainty comes variability within a set of unknown limits. It’s the stuff that comes out of left field, like Nassim Nicholas Taleb’s black swan events. Because we can’t measure uncertainty with any sort of accuracy, we think of risk as something outside our control. We often connect it to things like running out of money in retirement or ending up in a car crash.

But how did we end up with two such completely different definitions of the same thing? My research points to an economist named Frank Knight and his book “Risk, Uncertainty and Profit.” (Toronto Reference Library, Stack Request, 330.1 K54.11)

In 1921, Mr. Knight wrote: “There is a fundamental distinction between the reward for taking a known risk and that for assuming a risk whose value itself is not known.” When a risk is known, it is “easily converted into an effective certainty,” while “true uncertainty,” as Knight called it, is “not susceptible to measurement.”...I’m also betting that if you heard a term like “risk management model,” you really thought, “uncertainty management model.” Unfortunately, no financial firm offers uncertainty management.

Solving this problem doesn’t require a new definition. We just need to shift our thinking when we hear someone in finance mention risk. We need to remember, that person isn’t talking about the odds we’ll lose everything, but about something that fits in a box.

I suspect that is why financial professionals sound so confident when they talk about managing our risk. In their minds, managing risk comes down to a formula they can fine-tune on their Dial-A-Risk meter. In our minds, we have to learn to separate the formula from the unknown unknowns that cannot be accounted for in any model or equation.

Once we learn to recognize that we are not talking about the same thing, we can avoid terrible disappointment and bad behavior when financial risk shows up again. And it will.
risks  uncertainty  unknowns  books  interpretation  financial_risk  beyond_one's_control  Nassim_Taleb  black_swan  misinterpretations  miscommunications  disappointment  languages 
may 2015 by jerryking
The promise and peril of digital diplomacy - The Globe and Mail
TAYLOR OWEN
Contributed to The Globe and Mail
Published Friday, Jan. 09 2015

the same governments that are seeking to enable free speech in countries like Iran are at the same time rapidly expanding the surveillance state. Thanks to the revelations of Edward Snowden we now know how the state has chosen to respond to this new space of digital empowerment. Like a traditional battlefield, they are seeking to control it. To, as they themselves claim, “know it all.”

And herein lies the central tension in the digital diplomacy initiative. By seeking to control, monitor and undermine the actions of perceived negative actors, the state risks breaking the very system that positively empowers so many. And this will ultimately harm those living under autocratic and democratic regimes alike.

The answer, unfortunately, is not as simple as many critics of digital diplomacy assert. Simply returning to traditional in-person diplomacy ignores the global shift to decentralized digital power. Digital diplomacy is a well-intentioned attempt to participate in this new space. However, it is one that is both ill-suited to the capabilities of the state, and is negated by other digital foreign policy programs.

We are at the start of a reconfiguration of power. Navigating this terrain is one of the principal foreign policy challenges of the 21st century.
diplomacy  risks  Communicating_&_Connecting  social_media  foreign_policy  digital_diplomacy  uToronto  public_diplomacy  Outsourcing  Edward_Snowden  challenges  21st._century  rogue_actors 
february 2015 by jerryking
The Dangers and Opportunities in a Crisis
October 7, 2012 | NYTimes.com | By HUGO DIXON, Hugo Dixon is the founder and editor of Reuters Breakingviews.

Wherever one turns — politics, business, medicine, ecology, psychology, virtually every field of human activity — people talk about crises. But what are they, how do they develop and what can people do to change their course?

The first thing to say is that a crisis is not just a bad situation. When the word is used that way, it is devalued. The etymology is from the ancient Greek: krisis, or judgment. The Greek Orthodox Church uses the term when it talks about the Final Judgment — when sinners go to hell, but the virtuous end up in heaven. The Chinese have a similar concept: The characters for crisis combine parts of those for danger and opportunity.

A crisis is a point when people have to make rapid choices under extreme pressure, normally after something unhealthy has been exposed in a system. To use two other Greek words, one path can lead to chaos; another to catharsis or purification.

A crisis is certainly a test of character. It can be scary. Think of wars; environmental collapses that destroy civilizations of the sort charted in Jared Diamond’s book “Collapse: How Societies Choose to Fail or Succeed”; mass unemployment; or individual depression that leads to suicide.

But the outcome can also be beneficial. This applies whether one is managing the aftermath of the Lehman Brothers bankruptcy, the current euro crisis, the destruction of an oil rig in the Gulf of Mexico or an individual’s midlife crisis. Much depends on how the protagonists act.

Students of crises are fond of dividing them into phases. For example, Charles Kindleberger’s “Manias, Panics, and Crashes: A History of Financial Crises” identifies five phases of a financial crisis: an exogenous, normally positive, shock to the system; a bubble in which people exaggerate the benefits of that shock; distress when some investors realize that the game cannot last; the crash; and finally a depression.

Although there is much to commend in Mr. Kindleberger’s system, it is too rigid to account for all crises in all fields. It also downplays the possibility that decision makers can change the course of a crisis. A more flexible scheme that leaves space for human agency to affect how events turn out has just two phases: the bubble and the crash......The bubble is typically characterized by mania and denial. Things are going well — or, at least, appear to be. Feedback loops end up magnifying confidence...............Manic individuals do not know their limitations and end up taking excessive risks — whether on a personal level or in managing an organization or an entire economy. As the ancient Greeks said, hubris comes before nemesis........But before that, there is denial. People do not wish to recognize that there is a fundamental sickness in a system, especially when they are doing so well........The ethical imperative in this phase is to burst the bubble before it gets too big. That, in turn, means both being able to spot a bubble and having the courage to stop the party before it gets out of hand. Neither is easy. It is hard to recognize a sickness, given that there is usually some ideology that explains away the mania as a new normal. The few naysayers can be ridiculed by those who benefit from the continuation of the status quo.

What is more, politicians, business leaders and investors rarely have long-term horizons. So even if they have an inkling that things are not sustainable, they may still have an incentive to prolong the bubble.......The crash, by contrast, is characterized by panic and scapegoating. People fear that the system could collapse. Negative feedback loops are in operation: The loss of confidence breeds further losses in confidence. This is apparent on an individual level as much as on a macro one.

..Events move extremely fast, and decisions have to be made rapidly........The key challenge is to make effective decisions that avoid vicious spirals while not embracing short-term fixes that fail to address the fundamental issues. With the euro crisis, for example, it is important to improve competitiveness with structural reforms and not just rely on liquidity injections from the European Central Bank.

In this phase, no one denies that there is a problem. But there is often no agreement over what has gone wrong. Protagonists are reluctant to accept their share of the responsibility but instead seek to blame others. Such scapegoating, though, prevents people from reforming a system fundamentally so that similar crises do not recur......Crises will always be a feature of life. The best that humanity can do is to make sure it does not repeat the same ones. And the main way to evolve — both during a bubble and after a crash — is to strive to be honest about what is sick in a system. That way, crises will not go to waste.
blaming_fingerpointing  books  bubbles  clarity  crisis  dangers  decision_making  economic_downturn  Jared_Diamond  market_crash  opportunities  risks  scapegoating  societal_choices 
february 2015 by jerryking
Water shortages could open taps on corporate risk - The Globe and Mail
NEW YORK — Reuters Breakingviews
Published Monday, Jan. 05 2015

two-thirds of the world’s largest companies worry about how constraints may affect their business....A few high-profile droughts have helped shake off some complacency. ...Illinois and Indiana are starting to use their relative abundance of water to lure companies to their states....Often, a company’s idea of water risk is very narrow,
water  scarcity  water_footprints  risks 
january 2015 by jerryking
Risky Business: BLG Sees Cyber Risks Underlining Challenges To Canadian Businesses
December 16, 2014

Borden Ladner Gervais Outlines 2015’s Top 10 Business Risks--Borden Ladner Gervais LLP’s predictions for 2015 are decidedly more worrying, as the firm issued a top ten list of business risks. At the top of the list, the firm says, is cybersecurity and the risks businesses face from hackers, data leaks, and social media. Others include risks related to First Nations land claims, anti-corruption enforcement and consumer class actions sparked by an increasing number of product recalls.
cyber_security  data_breaches  risks  cyberrisks  predictions  law_firms  Bay_Street  social_media  resilience  land_claim_settlements  product_recalls  anti-corruption  BLG  class_action_lawsuits 
january 2015 by jerryking
Big Data rewards come with tricky set of risks for companies - The Globe and Mail
SUSAN KRASHINSKY - MARKETING REPORTER
The Globe and Mail
Published Monday, Nov. 03 2014

It was a sign that Loblaw Cos. Ltd. was taking a specific strategy with its loyalty program: telling people who shop at the company’s stores that their purchases would be recorded and tracked, but that they would be offered something of value in return: rewards for buying the things they like best.

In an age of “Big Data,” companies are scrambling to better target their communications with customers. If done right, businesses hope that this will eliminate more of the irrelevant advertising that makes people tune out at best and irritates them at worst.

But it has also thrown the advertising industry into a potentially damaging situation. As more of our behaviour is tracked, both online and off, many consumers are becoming wary about how their information is stored and used. Combine that with repeated instances of massive breaches of data security, and the corporate world faces the threat of losing the trust of consumers altogether....One area where consumer data is particularly important is in mobile advertising, where companies send people real-time offers on their mobile phones. But consumers are cautious. In supermarkets, 66 per cent of Canadians said that offers on their phones would make them uncomfortable.

“The complexity of the context is something that, if a marketer doesn’t feel their way through that, they can misstep,”
massive_data_sets  Loblaws  Susan_Krashinsky  data_breaches  mobile  contextual  advertising  loyalty_management  Aimia  privacy  risks  location_based_services  missteps 
november 2014 by jerryking
The Biology of Risk - NYTimes.com
By JOHN COATES JUNE 7, 2014

What is it about risk taking that so eludes our understanding, and our control?

Part of the problem is that we tend to view financial risk taking as a purely intellectual activity. But this view is incomplete. Risk is more than an intellectual puzzle — it is a profoundly physical experience, and it involves your body...Risk by its very nature threatens to hurt you, so when confronted by it your body and brain, under the influence of the stress response, unite as a single functioning unit....The state of your body predicts your appetite for financial risk just as it predicts an athlete’s performance.

If we understand how a person’s body influences risk taking, we can learn how to better manage risk takers. We can also recognize that mistakes governments have made have contributed to excessive risk taking.

Consider the most important risk manager of them all — the Federal Reserve. ...Uncertainty over the timing of something unpleasant often causes a greater challenge response than the unpleasant thing itself. Sometimes it is more stressful not knowing when or if you are going to be fired than actually being fired. Why? Because the challenge response, like any good defense mechanism, anticipates; it is a metabolic preparation for the unknown....Most models in economics and finance assume that risk preferences are a stable trait, much like your height. But this assumption, as our studies suggest, is misleading. Humans are designed with shifting risk preferences. They are an integral part of our response to stress, or challenge....One such opportunity is a brief spike in market volatility, for this presents a chance to make money. But if volatility rises for a long period, the prolonged uncertainty leads us to subconsciously conclude that we no longer understand what is happening and then cortisol scales back our risk taking. In this way our risk taking calibrates to the amount of uncertainty and threat in the environment.

Continue reading the main story
Under conditions of extreme volatility, such as a crisis, traders, investors and indeed whole companies can freeze up in risk aversion, and this helps push a bear market into a crash. Unfortunately, this risk aversion occurs at just the wrong time, for these crises are precisely when markets offer the most attractive opportunities, and when the economy most needs people to take risks. The real challenge for Wall Street, I now believe, is not so much fear and greed as it is these silent and large shifts in risk appetite....As uncertainty in fed funds declined, one of the most powerful brakes on excessive risk taking in stocks was released....There are times when the Fed does need to calm the markets. After the credit crisis, it did just that. But when the economy and market are strong, as they were during the dot-com and housing bubbles, what, pray tell, is the point of calming the markets? Of raising rates in a predictable fashion? If you think the markets are complacent, then unnerve them. Over the past 20 years the Fed may have perfected the art of reassuring the markets, but it has lost the power to scare. And that means stock markets more easily overshoot, and then collapse.

CONTINUE READING THE MAIN STORY
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COMMENTS
The Fed could dampen this cycle. It has, in interest rate policy, not one tool but two: the level of rates and the uncertainty of rates. Given the sensitivity of risk preferences to uncertainty, the Fed could use policy uncertainty and a higher volatility of funds to selectively target risk taking in the financial community....IT may seem counterintuitive to use uncertainty to quell volatility. But a small amount of uncertainty surrounding short-term interest rates may act much like a vaccine immunizing the stock market against bubbles. More generally, if we view humans as embodied brains instead of disembodied minds, we can see that the risk-taking pathologies found in traders also lead chief executives, trial lawyers, oil executives and others to swing from excessive and ill-conceived risks to petrified risk aversion. It will also teach us to manage these risk takers, much as sport physiologists manage athletes, to stabilize their risk taking and to lower stress.
Wall_Street  risks  risk-management  risk-taking  uncertainty  U.S._Federal_Reserve  bubbles  volatility  behavioural_economics  risk-preferences  risk-aversion  biology  psychology  interest_rates  emotions  human_experience  human_behavior  human_frailties  human_psyche  financial_risk  signaling  stress_response  market_crash  immobilize  paralyze  bear_markets  policy_tools  physiological_response  risk-appetite  unpredictability  physical_experiences  calibration 
june 2014 by jerryking
Old like me. Why elderly care needs more risk - The Globe and Mail
Saskia Sivananthan

Contributed to The Globe and Mail

Published Sunday, Mar. 23 2014

We must rethink our approach to managing risk in nursing homes, especially when doing so means limiting residents’ freedom to choose their own way.

It’s a poignant reminder of the daily challenges staff and residents at every nursing home face. They are also part of a theme that played into almost every aspect of my stay: How do you balance safety with autonomy for residents?

Safety is clearly important; often people move to nursing homes precisely because they can no longer manage living without 24-hour care. At the same time, this tightrope balance invokes the fear paramount in most people’s mind when they think about institutional living – losing their autonomy, not choking on breakfast.

The regulations for long-term care in most provinces prioritize medical needs and safety over autonomy. Public reporting of quality indicators at long-term care homes include safety as one of five attributes of a high-performing system – but autonomy is not considered.....we take these calculated risks every day: slicing bread, crossing the street, staying up late. Suddenly being regarded as unable to make decisions you’ve made all your life contributes to a feeling of disempowerment. In our attempt to remove all risk in nursing homes we have ended up with regulations that are so extreme that residents may no longer have autonomy or feel at home....Many of the new models of long-term care homes coming out of Europe have embraced this concept of calculated risk. There is a much lauded dementia village Hogeweyk in the Netherlands.....Denmark also focuses on autonomy. Nursing homes there are truly run as ‘homes’ rather than institutions, with the result that residents become family. One facility of 23 residents, 70 per cent of whom have dementia, takes Caribbean vacations together. Imagine the risk.

We must rethink our approach to managing risk in nursing homes, especially when doing so means limiting residents’ freedom to choose their own way.

One writer described a nursing home in Denmark as a place where “…old people could drink, laugh and love themselves into death.” When I have to go back to a nursing home, that’s where I want to go.
aging  elderly  free_will  freedom  nursing_homes  safety  autonomy  tradeoffs  disempowerment  risks  risk-taking  counterintuitive 
march 2014 by jerryking
When data meets agriculture: Monsanto to buy Climate Corp. for $930M — Tech News and Analysis
Oct. 2, 2013 | GigaOM | By Stacey Higginbotham.

Monsanto, the giant agricultural company, says it will acquire data analytics firm the Climate Corp. in a cash deal valued at $930 million. This deal is an obvious extension of data analytics into the world of big agriculture, but it’s also a perfect example of how the combo of data and the internet of things is going to disrupt established industries in a way that traditional computing never could.

Climate Corp offered targeted insurance policies to farmers that incorporated all sorts of data about historical and current agriculture and weather....as climate change disrupts historical weather patterns, this boosts the risks to farmers that weather events might destroy crops, but it also changes the types of crops they should plant. Thus the data analysis that Climate Corp. offers is not only valuable to farmers today, but also to Monsanto as it tries to create crops that will thrive as the climate changes.
data  Monsanto  Climate_Corporation  agriculture  farming  weather  insurance  climate_change  risks  risk-management 
january 2014 by jerryking
Wall Street Avoiding Risk? Ha! Bets Are Getting Bigger
March 12, 2003 | of The Wall Street Journal | By Gregory Zuckerman.

With stocks crumbling this past fall, John Mack, the chief executive officer of Credit Suisse First Boston, met with senior executives of the firm in New York. He surprised them with a suggestion for how to deal with the difficult markets.

"Let's make some bets," he told the executives, according to people at the meeting. "Let's be smart" with the firm's capital, he urged them, but don't be afraid to take some reasonable risks.

When the message circulated within the securities firm, it startled some people, because Credit Suisse Group's CSFB had been sharply cutting back its exposure to trading risks. But now, like most other houses on Wall Street, CSFB is slowly getting back into the business of trading for profit, boosting its exposure at a time when the rest of its businesses are down....For years, Wall Street firms worked to increase less-volatile businesses that don't eat up capital and can provide steady earnings, such as asset management and mergers and acquisitions. But most of those businesses are in a deep slump, while traders betting on "macro" global-economic trends have enjoyed hefty gains thanks to tumbling rates and a falling dollar.

Analysts say that while proprietary trading may be working for now, they question how long the gains can continue. "A lot of the trading models look invincible" for a period of time, but it doesn't always last,
Wall_Street  risk-taking  risks  CSFB  proprietary-trading  traders  big_bets 
december 2013 by jerryking
The need for an analytical approach to life
November 3, 2013 | FT.com | By Rebecca Knight.

Risk analysis is not about predicting events; it’s about understanding the probability of possible scenarios, according to Elisabeth Paté-Cornell, professor at the Stanford School of Engineering.
In her latest research, she argues that expressions such as “black swan” and “perfect storm”, which have become journalistic shorthand when describing catastrophes, are just excuses for poor planning. Managers, should “think like engineers” and take a systematic approach to risk analysis. They should figure out how a system works and then identify the probable ways in which it could fail.
So does a black swan event exist?
The only one that I can think of is the Aids epidemic. In the case of a true black swan, you cannot anticipate it.
And what about ‘perfect storms’?
A combination of rare events is often referred to as a perfect storm. I think people underestimate the probability of them because they wrongly assume that the elements of a perfect storm are independent. If something happened in the past – even though it may not have happened at the same time as something else – it is likely to happen again in the future.
Why should managers take an engineering approach to analysing the probability of perfect storms?
Engineering risk analysts think in terms of systems – their functional components and their dependencies. If you’re in charge of risk management for your business, you need to see the interdependencies of any of the risks you’re managing: how the markets that you operate in are interrelated, for example.
You also need imagination. Several bad things can happen at once. Some of these are human errors and once you make a mistake, others are more likely to happen. This is because of the sequence of human error. When something bad happens or you make a mistake, you get distracted which means you’re more likely to make another mistake, which could lead to another bad event. When you make an error, stop and think. Anticipate and protect yourself.
How can you compute the likelihood of human error?
There are lots of ways to use systems analysis to calculate the probability of human error. Human errors are often rooted in the way an organisation is managed: either people are not skilled enough to do their jobs well; they do not have enough information; or they have the wrong incentives. If you’re paid for maximum production you’re going to take risks.
So in the case of a financial company I’d say monitor your traders, and maybe especially those that make a lot of money. There are a lot of ways you can make a lot of money: skill, luck, or through imprudent choices that sooner or later are going to catch up with you.
So you can do risk analysis even without reliable statistics?
We generally do a system-based risk analysis because we do not have reliable statistics. The goal is to look ahead and use the information we have to assess the chances that things might go wrong.
The upshot is that business schools ought to do a better job of teaching MBAs about probability.
+++++++++++++++++++++++++++++++++
“Numbers make intangibles tangible,” said Jonah Lehrer, a journalist and
author of “How We Decide,” (Houghton Mifflin Harcourt, 2009). “They
give the illusion of control. [Add "sense of control" to tags]
engineering  sense_of_control  black_swan  warning_signs  9/11  HIV  Aids  business_schools  MBAs  attitudes  interconnections  interdependence  mindsets  Stanford  imagination  systems_thinking  anticipating  probabilities  pretense_of_knowledge  risk-management  thinking_tragically  complexity  catastrophes  shorthand  incentives  quantified_self  multiple_stressors  compounded  human_errors  risks  risk-analysis  synchronicity  cumulative  self-protection  systematic_approaches 
november 2013 by jerryking
William Galston: Government Is a Good Venture Capitalist - WSJ.com
August 27, 2013, 7:02 p.m. ET

Government Is a Good Venture Capitalist
Early-stage tech firms get more funding from Washington than from private VC investors.

By
WILLIAM A. GALSTON
venture_capital  risks  uncertainty  early-stage 
september 2013 by jerryking
Angel money and sustainable business
04/10/2003 | In Business | William Wetzel and Jeffrey Sohl.

Believe it not, angels do exist. The term was born on Broadway to describe individuals who put up the high risk, early stage seed money to launch Broadway productions. At the Center for Venture Research based at the University of New Hampshire, the term applies to individual investors who back emerging entrepreneurial ventures. Angels are the most likely investors for early stage, high risk companies that need relatively small amounts of capital to get started.
angels  Broadway  theatre  investors  early-stage  risks  risk-taking 
june 2013 by jerryking
Playing it safe puts the economy at risk - The Globe and Mail
TODD HIRSCH

Special to The Globe and Mail

Last updated Thursday, Apr. 11 2013

Risk management is now a quasi-science, with positive and negative consequences. The positive is that companies are now better equipped to gauge the level of risk associated with any particular investment. But the negative is that, too often, risk management hampers innovation and creativity.

What should be a tool to make better decisions has sometimes led companies to make no decisions at all. Risk management should liberate companies. Instead, it has enslaved some.
risks  risk-management  innovation  economy  creativity  Todd_Hirsch  risk-aversion  risk-avoidance  playing_it_safe 
april 2013 by jerryking
Changing The Recipe Of A Signature Dish Can Be A Risk
March 2010 | QSR magazine | | By Daniel P. Smith.

remaking a signature dish is risky business. Who can forget the consumer backlash Coca-Cola encountered when it altered its recipe in 1985, reverting to its original formula after less than three months on the market with New Coke?

“Changing a signature recipe is a dangerous proposition because there’s risk involved,” says Mark Smith, a research and equity analyst for investment firm Feltl and Company who focuses specifically on restaurants. “Will franchisees be on board with the change? Will this change alienate heavy users?”
fast-food  innovation  chefs  menus  recipes  Domino's  foodservice  risks  QSR 
april 2013 by jerryking
Flight Risks
November 2005 | Worth | by Dan Rosen.

Angel investors often get caught up with charismatic and passionate entrepreneurs. It‘s the joy and the danger of angel investing. For angel investing to work, investors and entrepreneurs need that shared passion and vision. But angel investing is not for the faint of heart. Seedstage investments tie up your money for a long time because you are investing early in the life of a company whose typical gestation period is six to eight years. No individual can do (nor does a relatively modest investment justify) the depth of analysis and due diligence that professional investors such as venture capitalists conduct; that often makes decisions difficult. And the likelihood that several additional rounds of financing will follow your initial investment and dilute your stake causes a large financial risk....Know your strengths, weaknesses and desires. If they don‘t match angel investing, don’t do it. If they do, have Fun.
angels  due_diligence  illiquidity  start_ups  financial_risk  risks  passions  strengths  early-stage  weaknesses  self-awareness 
march 2013 by jerryking
Memo to Staff: Take More Risks - WSJ.com
March 20, 2013| WSJ| By LESLIE KWOH
Memo to Staff: Take More Risks
CEOs Urge Employees to Embrace Failure and Keep Trying

Growth and innovation come from daring ideas and calculated gambles, but boldness is getting harder to come by at some companies. After years of high unemployment and scarred from rounds of company cost-cutting and layoffs, managers say their workers seem to have become allergic to risk.

Companies large and small are trying to coax staff into taking more chances in hopes that they'll generate ideas and breakthroughs that lead to new business. Some, like Extended Stay, are giving workers permission to make mistakes while others are playing down talk of profits or proclaiming the virtues of failure.
risks  risk-taking  daring  growth  innovation  new_businesses  failure  individual_initiative  idea_generation  large_companies  start_ups  boldness 
march 2013 by jerryking
Five traits of smart risk takers
March 13, 2013 | G&M | Harvey Schachter.

Review of Taking Smart Risks by Doug Sundheim. Sundheim lists five common dangers of playing it safe for too long:

• You don’t win.
• You don’t grow.
• You don’t create.
• You lose confidence as you lose momentum and start to freeze up.
• You don’t feel alive, because you aren't challenging yourself.
Harvey_Schachter  risks  risk-taking  books  book_reviews  soul-enriching  personality_types/traits  growth  cost_of_inaction  character_traits  complacency  risk-aversion  risk-avoidance  playing_it_safe 
march 2013 by jerryking
Big Data should inspire humility, not hype
Mar. 04 2013| The Globe and Mail |Konrad Yakabuski.

" mathematical models have their limits.

The Great Recession should have made that clear. The forecasters and risk managers who relied on supposedly foolproof algorithms all failed to see the crash coming. The historical economic data they fed into their computers did not go back far enough. Their models were not built to account for rare events. Yet, policy makers bought their rosy forecasts hook, line and sinker.

You might think that Nate Silver, the whiz-kid statistician who correctly predicted the winner of the 2012 U.S. presidential election in all 50 states, would be Big Data’s biggest apologist. Instead, he warns against putting our faith in the predictive power of machines.

“Our predictions may be more prone to failure in the era of Big Data,” The New York Times blogger writes in his recent book, The Signal and the Noise. “As there is an exponential increase in the amount of available information, there is likewise an exponential increase in the number of hypotheses to investigate … [But] most of the data is just noise, as most of the universe is filled with empty space.”

Perhaps the biggest risk we run in the era of Big Data is confusing correlation with causation – or rather, being duped by so-called “data scientists” who tell us one thing leads to another. The old admonition about “lies, damn lies and statistics” is more appropriate than ever."
massive_data_sets  data_driven  McKinsey  skepticism  contrarians  data_scientists  Konrad_Yakabuski  modelling  Nate_Silver  humility  risks  books  correlations  causality  algorithms  infoliteracy  noise  signals  hype 
march 2013 by jerryking
'Fraidy cats
February 22, 2013
Gary Salewicz

Without putting too fine a point on it, both men - one a successful Silicon Valley entrepreneur, the other a head of the wireless upstart Wind Mobile - bemoan Canada as a land of wimps: For Lee, it's revealed in the fact that few Canadian software engineers are willing to take a flyer on their careers and create start-ups; for Lacavera, it's about the shortage of Canadians willing to finance start-ups. This, of course, is reducing their arguments to simplistic terms, but you get the point.

Tyler Brûlé - founder of Wallpaper and Monocle magazines - whose mug also appears in the magazine (page 9), struck a similar note in a recent chat he had with students at the Ontario College of Art and Design. After he decamped Toronto for London with little more than a degree and an outsized ego, Brûlé built a media mini-empire; the lesson for students, embrace risk.

We're not all a bunch of 'fraidy cats sitting on our hands.
start_ups  entrepreneurship  risks  Tyler_Brûlé  risk-taking  risk-aversion  Anthony_Lacavera  playing_it_safe  Canada  Canadian  software_developers 
february 2013 by jerryking
What Data Can’t Do - NYTimes.com
By DAVID BROOKS
Published: February 18, 2013

there are many things big data does poorly. Let’s note a few in rapid-fire fashion:

* Data struggles with the social. Your brain is pretty bad at math (quick, what’s the square root of 437), but it’s excellent at social cognition. People are really good at mirroring each other’s emotional states, at detecting uncooperative behavior and at assigning value to things through emotion.
* Data struggles with context. Human decisions are embedded in contexts. The human brain has evolved to account for this reality...Data analysis is pretty bad at narrative and emergent thinking.
* Data creates bigger haystacks. This is a point Nassim Taleb, the author of “Antifragile,” has made. As we acquire more data, we have the ability to find many, many more statistically significant correlations. Most of these correlations are spurious and deceive us when we’re trying to understand a situation.
* Big data has trouble with big (e.g. societal) problems.
* Data favors memes over masterpieces. Data analysis can detect when large numbers of people take an instant liking to some cultural product. But many important (and profitable) products are hated initially because they are unfamiliar. [The unfamiliar has to accomplish behavioural change / bridge cultural divides]
* Data obscures hidden/implicit value judgements. I recently saw an academic book with the excellent title, “ ‘Raw Data’ Is an Oxymoron.” One of the points was that data is never raw; it’s always structured according to somebody’s predispositions and values. The end result looks disinterested, but, in reality, there are value choices all the way through, from construction to interpretation.

This is not to argue that big data isn’t a great tool. It’s just that, like any tool, it’s good at some things and not at others. As the Yale professor Edward Tufte has said, “The world is much more interesting than any one discipline.”
massive_data_sets  David_Brooks  data_driven  decision_making  data  Nassim_Taleb  contrarians  skepticism  new_graduates  contextual  risks  social_cognition  self-deception  correlations  value_judgements  haystacks  narratives  memes  unfamiliarity  naivete  hidden  Edward_Tufte  emotions  antifragility  behavioral_change  new_products  cultural_products  masterpieces  EQ  emotional_intelligence 
february 2013 by jerryking
A Turnaround Job Can Make Your Career If You Choose Wisely
Sep. 19, 1995 | WSJ | HAL LANCASTER.

It's an age-old dilemma: Saving a sinking ship can make a career; but some ships can't be salvaged, and a high-profile failure can scuttle a promising career. (Yes, I know failures aren't supposed to be fatal any more because companies realize what valuable learning experiences they are. If you want fairy tales, you'll have to look elsewhere.)

So when is it prudent to take on a tough turnaround assignment? ... And how would she advise others weighing the risks of a turnaround assignment? Research, research and research, she says, and then go with your gut instinct. ``There's a point at which you have enough information to act,'' she says. ``If you wait to get everything, you're too late.''

If that philosophy doesn't work for you, try this one, from Gen. Colin Powell's list of rules to live by, which Ms. Lewis keeps on her office wall: ``Don't let adverse facts get in the way of a good decision.''
career-defining_moments  career_ending_moves  Colin_Powell  collectibles  decline  due_diligence  failure  gut_feelings  Hal_Lancaster  Managing_Your_Career  risks  turnarounds  women 
february 2013 by jerryking
Underpricing risky business
February 1, 2013 | G&M report on Business pg B2 |by David Parkinson.

As energy and mining reserves have become increasingly expensive to find in other, more stable parts of the world, Africa's dangers have been glossed over in the quest to cash in on the continent’s still relatively undeveloped resources. Companies have been ignoring the risky reality, and investors have been underpricing it...Africa's significant growth potential has generated optimism, however, the geopolitical risks facing investors in Africa remain, for the most part, underestimated.”
The biggest threat to business in Africa, he argues, is “re1igious/ ideological militancy"--especially from Islamist/jihadist groups - which he says “has been vastly underestimated, and will pose significant risks to foreign investors in much of Africa."
He believes companies and their investors are underpricing the risks of doing business in Aŕrica, including rising security and insurance costs and cant project delays that could come from security threats, military conflicts or regime changes....Until the market starts pricing risk into African resource investments before a crisis forces the realization upon it, there will be little incentive for companies to seek less risky and less corrupt places to put their money.
And there will be more harsh and costly awakenìngs for investors who are themselves willfully blind to the risks.
underpricing  risks  Africa  natural_resources  political_risk  geopolitics  Mali  war  underestimation  frontier_markets  corruption  mining  mispricing  Islamists  jihadis  willful_blindness 
february 2013 by jerryking
A six-point checklist for hiring consultants
Jan. 02 2013 | The Globe and Mail | HARVEY SCHACHTER,
Special to The Globe and Mail

David Fields, a consultant on hiring consultants, offers in his new book, The Executive’s Guide to Consultants: key points-
1. Why are we considering an outside expert?
2. What are our desired outcomes?

3. When will we know we’re on the right track?

4. What risks do we face?

5. What is the value of taking on this project?

6. Which parameters will limit or affect the project?
Harvey_Schachter  management_consulting  risks  checklists  book_reviews  questions  hiring  outcomes  JCK 
january 2013 by jerryking
McGuinty’s locked-door policy acquiesces to unfounded fears
Dec. 26, 2012 | The Globe and Mail | MARCUS GEE.

Dalton McGuinty produced the $10-million like a rabbit from a hat last week, pledging to spend it on locking up Ontario elementary schools against the threat of Newtown-like mass killing...Is it a “reasonable” response to the tragedy?...Ontario is not Connecticut.... Ontario schoolchildren are not at risk of becoming victim to a mass school shooting. Or, to frame it another way, the risk is so small that spending millions to address it is grossly wasteful.

Of course, you won’t find any politician jumping up to say that... after all, would dare to say that the govt. should not do more to protect children? This is the insidious problem with pronouncements like these. They put potential opponents in the role of being against motherhood.

Unnecessary security measures such as the locked-door policy tend to increase anxiety about children's safety at a time when it is already feverishly high. Lots of parents drive their kids to school because they think it's unsafe to walk. That's bad for the environment and bad for children's health. Many fear their kids could be abducted by strangers, despite the fact that statistics show they are more likely to be struck by lightning. Exaggerated concern about safety has led schools to rip out “dangerous” climbing gyms and even ban ball playing.

It can't be good for children to persuade them they live in a dangerous world with deadly threats lurking around every corner. A healthy respect for proven risks like crossing the street without looking is useful. Fear of remote threats like a mass school shooting is not.
Marcus_Gee  fear  mass_shootings  schools  Dalton_McGuinty  risks 
december 2012 by jerryking
What Are The Risks Of Suing Your Boss? - Orlando Sentinel
April 18, 1997| Wall Street Journal | By Hal Lancaster .

You Could Win The Battle But Lose The War. Career Experts Offer Some Advice To Consider.
litigation  Managing_Your_Career  Hal_Lancaster  managing_up  risks 
december 2012 by jerryking
The Education of a Financial Columnist
November 17, 1998 | Wall Street Journal pg. C1 | Jonathan Clements

* Investing is 90% emotional
* Without good savings habits, there is nothing
* You shouldn't invest in a vacuum --non-financial decisions (e.g. about one's health or relationships) can have a financial impact
* There are no gurus
* Churn and get burned
* Diversification is a fair-weather friend
* Risk is in the eye of the beholder
personal_finance  investing  economizing  diversification  Jonathan_Clements  habits  churn  savings  psychology  risk-preferences  risks 
december 2012 by jerryking
Taking Risk To the Marketplace
March 6, 2000 | Fortune Magazine | By Thomas A. Stewart.

* "You should always value the ability to move and change, because that creates options, and options are valuable,"
* Traditional risk management, with its emphasis on real property and financial events, isn't enough for knowledge companies, whose big risks are intellectual assets, such as brand equity, human capital, innovation, and their network of relationships.
* you have to know what's at risk-- which isn't always easy for intangible assets.
* Each intangible asset has a different risk profile.
*Thinking like a portfolio manager works for risk management as well as for strategy, says Bruce Pasternak, head of the strategic leadership practice at Booz Allen & Hamilton. In either case, adaptability is a cardinal virtue; the top goal is organizational flexibility. All-or-nothing bets like insurance have limited use in protecting cash flows from intangibles because their value is so uncertain, says Anjana Bhattacharee, director of Aporia, a British startup developing tools to manage those risks. Hedging also has problems. Says Bjarni Armannsson, head of the Icelandic Investment Bank in Reykjavik: "It's difficult to find a counterparty for intellectual risks." To hedge against falling gas prices, Enron can sell the risk to someone who fears rising prices, like a utility, but how do you hedge against a loss of expertise or brand equity

* Markets are full of risk, but it turns out that they're a lot safer than rigid structures. Intellectual assets and operations obey no one's command and are subject to discontinuous--i.e., quantum--change. There are four ways to respond to risk: Avoid it, reduce it, transfer it, or accept it. The one thing you can't do, if it's intellectual risk, is tie it up and subdue it.
Thomas_Stewart  risks  risk-management  organizational_flexibility  adaptability  binary_decisionmaking  intellectual_risks  human_capital  insurance  intellectual_assets  brand_equity  intangibles  networks  interconnections  discontinuities  expertise  portfolios  options  portfolio_management  cash_flows  generating_strategic_options  optionality  brittle  antifragility  step_change  counterparties  network_risk 
december 2012 by jerryking
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