Undercover Economist

Just finished the Undercover Economist by Tim Harford.

Its a very interesting read and will give you insights into scarcity power, tax and markets & auctions.

I recommend this book for anyone interested in everyday economics.

Keys to success

Recommended Reading:  100 Great Businesses and the Minds Behind Them, Emily Ross and Angus Holland (Random House)

Great stories ranging from Bette Graham, the inventor of liquid paper, Fred Deluca of  Subway to James Dyson of the vacumn cleaner to Helena Rubenstein.

In common, all had 1) inspiration, 2) risk taking, 3) sefl-believe, 4) hard work, 5) self-belief and 6) vision to see what could be.

You could throw in luck but those 6 items tend to help you generate your own luck.

I strongly recommend this book!

Enterprise & Venture Capital, 5th Edition is out!

To quote Stephen King, the famous author, “What separates the talented individual from the successful one is a lot of hard work.”

This book will give you some secrets to make your path to success a little easier.  Its loaded with wisdom from dozens of entrepreneurs, investors & success stories like Resmed, Looksmart & Hitwise.

Visit Allen & Unwin, our publisher to order a copy.

Book Released – Enterprise & Venture Capital, 5th Edition

Are you looking for a guide to build a great business?

Are you thinking about venture capital backing?

How about some case studies of successful start-ups that made it to the global stage?

We interviewed dozens of entrepreneurs and venture capitalists so the new edition of Enterprise & Venture Capital (Allen&Unwin) has it all.

Check http://www.allenandunwin.com/default.aspx?page=94&book=9781741756906 to order.

CAPM – completely wrong??!!

Sorry for my absence last week.  I just started a large project reviewing the valuation of a large portfolio of investments for a major bank.

This week I have been reading “The (mis)behavior of Markets by Mandelbrot. Mandelbrot is a famous mathematician well known for his development of fractal geometry. Think fractured structures.

In 2004 he applied his mathematical genius to probability and finance theory in this book.  Its an interesting read so far.  I had not previously looked at probablity as having different states – much like water can be frozen solid, liquid or vapour, depending on the temperature.  Probability, Mandelbrot says, is similar.  Sometimes it is mild, sometimes its wild and sometimes slow.  He cites some interesting examples.

Much of today’s finance theory is based on the work of Bachelier from around 1900.  He basically came up with the idea of a normal distribution or bell curve.  The problem with this in finance is that markets do not really follow a normal distribution.

So while present theory suggests that large movements in markets are supposed to be rare, they are in fact not rare at all.

Its worth thinking about because if we are taking calculated risks and playing the odds in our investment and business decisions, it helps to know if we have estimated the odds of wins and losses reasonably well.

I’d love to hear from others who have read the book.  Hopefully time will permit me to complete the read of the book this week.

Cheers for now

Tom The Money Man!