Twenty Third Floor

Figuring out the future and the now

Category: optimisation

Actuarial and Risk, alternative investments, creating value, data analysis, economics, Equity Risk Premium, managing uncertainty, market risk, measurement, news, optimisation, predictive modelling, statistics

How not to lose money in Make a Million

23 October 2010

David Kirk

I have a clear strategy for how not to lose money playing the Make a Million competition. As I explain it, you may come up with some smart tactics to win the competition and enhance your returns, but you’re on you’re own there. So, how does one not lose money with the Make a Million…
Read more: How not to lose money in Make a Million
banking, creating value, currency risk, economics, financial risk, insight, managing uncertainty, optimisation

I promise to pay the bearer

14 October 2010

David Kirk

Recently had a discussion around whether government should intervene to influence the exchange rate. Now, I don’t have fully thought-through views on if and when and how and by how much this should be done. Still thinking it through (and having to reconsider many things about currencies, interest rates, inflation, open market purchases, sovereign wealth…
Read more: I promise to pay the bearer
Actuarial and Risk, alternative investments, business tools, credit risk, data analysis, economics, Equity Risk Premium, financial risk, investments, market risk, measurement, news, optimisation

Implied Pension Return Assumptions and the Equity Risk Premium

14 October 2010

David Kirk

When companies value pension obligations and required contribution rates, they make assumptions about the expected future investment returns. (Accounting standards require market-based rates reflecting fixed interest returns, but that’s a separate point). So what assumptions are pension funds making? The WSJ has an interesting article showing that the average US pension fund is assuming future…
Read more: Implied Pension Return Assumptions and the Equity Risk Premium
currency risk, economics, Emerging Markets, insight, optimisation

Minimum wages, unions and employment

1 October 2010

David Kirk

The debate around jobs, jobs at any cost, fair wages, fair working conditions, exploitation and what truly is best for the economy is complex. Don’t let anyone tell you different. If it really were that simple we’d have finished having the same debate while the Feudal System was still active. However, the recognition of the…
Read more: Minimum wages, unions and employment
Actuarial and Risk, alternative investments, banking, capital, capital structure, credit risk, economics, financial risk, investments, optimisation

Junk bonds in place of an IPO

25 September 2010

David Kirk

The 30 second intro to Junk Bonds Junk Bonds, also known as High Yield Bonds, are debt instruments issued by companies with poor credit ratings, or are the debt instruments of companies that were issued as high quality bonds from strong companies that have since fallen on hard times (“Fallen Angels”). Typically these are any…
Read more: Junk bonds in place of an IPO
Actuarial and Risk, banking, creating value, currency risk, economics, financial risk, market risk, optimisation

Unreal desires for deflation

7 September 2010

David Kirk

It’s clear some people just don’t get that deflation is catastrophic from an economic perspective. You would have though that Japan’s lost decade (is it still only a decade?) would be sufficient warning. Michael Pento from Euro Pacific capital writes about the options open Bernanke to stimulate the US economy through open market purchases given…
Read more: Unreal desires for deflation
Actuarial and Risk, business tools, capital, competition, creating value, customer value, economics, investments, news, operational risk, optimisation

Too Small To Succeed

6 September 2010

David Kirk

According to a Fin24 story this morning, the FSB is probing smaller unit trusts. The economics of a fund manager depends entirely on growing funds under management so that revenues (based on assets under management) grow to be larger than costs (significantly fixed and at most semi-variable). Details of performance fees and the second order…
Read more: Too Small To Succeed
Actuarial and Risk, creating value, insight, managing uncertainty, modelling, optimisation, predictive modelling

Most decisions are made without all the information

30 August 2010

David Kirk

Tyler Reed blogs about entrepreneurs having to make decisions with limited information. It’s almost all unknown I don’t disagree. It’s just that almost every meaningful decision ever made is made without all the information. Unknowns can be categorised a hundred different ways. One way is to think about: Unknown past information Uncertainty around the current…
Read more: Most decisions are made without all the information

About David Kirk

Featured Posts

Value at Risk – not always a monster, but normally it is.
by David Kirk
Nassim Taleb is not a fan of Value At Risk (VaR) “You’re worse off relying on misleading information than on not having any information at… Read more: Value at Risk – not always a monster, but normally it is.
One answer could be pet insurance
by David Kirk
I firmly believe major demographics shifts are going to have massive social, political, economic, financial market and commercial impacts in the coming decades. The balance… Read more: One answer could be pet insurance
A piece of the failure puzzle – decreasing insurer failure rates through Skilled Person Reviews
by David Kirk
Every failure hits policyholders’ savings or cover, impact their lives and their livelihoods. They destroys shareholder value and decrease confidence in the entire financial sector.… Read more: A piece of the failure puzzle – decreasing insurer failure rates through Skilled Person Reviews
How and why insurers fail
by David Kirk
I’ve been updating my presentation from 2021 on “How and Why Insurers Fail”. I now estimate the annual failure rate (or at least getting into… Read more: How and why insurers fail
The hidden dangers of opinion shopping and trusting good news.
by David Kirk
I had a recent discussion on the value of getting a second opinion. There’s the old line that “if you want five opinions, ask three… Read more: The hidden dangers of opinion shopping and trusting good news.
40,000
by David Kirk
40,000. That’s the ballpark figure I usually work with as the minimum number of micro insurance policies required for scale. The expenses of running even… Read more: 40,000
IFRS17 may not kill off EV
by David Kirk
Will IFRS17 kill off Embedded Value (EV) reporting in Africa? Or will it finally bring Market Consistent Embedded Value (MCEV) to life? I gave a… Read more: IFRS17 may not kill off EV

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