A stock which seemed an entirely justifiable investment yesterday may be exposed as folly today for any number of reasons such as fraud, obsolete technology or geopolitical upheaval. Equally, investing in stocks is fraught with risks and losses are, regrettably, unavoidable. In the main, it is how we deal with failure that decides whether we prosper in the long-term. Mistakes are part of human nature and cannot be avoided. (By the way, if you have an old Nokia 3310, hang onto it, it’s a retro classic). Having said that, Nokia, who originally made rubber boots, went from market domination to sell-off in less than ten years. Remember those Casio calculators with the nice pressy buttons and a digital display that fitted neatly in your jacket pocket? They should have dominated the mobile phone market for a decade.
This, despite the fact that they invented it in the first place. Imagine, for example, being a fly on the wall in the Kodak board meeting of 1975 in which they dismissed the digital camera as un-commercial. In poker terms, this is like going ‘all in’ and gambling on a final reckoning with a binary outcome.Ĭorporate history is littered with binary decisions that are almost impossible to comprehend today. That is, they would battle to the death to realise their referred outcomes whatever the cost. With both sides deeply entrenched, one could argue that it was entirely predictable that both sides would prove intractable. We can see this 24-hours a day with Brexit, for example. Pundits exploit this every evening as they offer up convincing accounts of the day’s events. To quote Nobel Prize winner Daniel Kahneman Thinking Fast and Slow: “Th e idea that the future is unpredictable is undermined daily by the ease with which the past is explained.” One of the interesting aspects of love, war, politics, and investment is that everything looks entirely predictable in hindsight. Jim Dolan, Chartered FCSI and Managing Director of Creechurch Capital, the Douglas based boutique discretionary fund management firm, looks at the lessons investors and fund managers might learn from recent history when trying to predict the long-term outcomes. It’s interesting to speculate how Brexit and its aftermath will be viewed by historians and economists 10 or 20 years from now. Love, war, politics, and investment: Everything seems predictable with the benefit of hindsight
0 kommentar(er)
