The Swedish Behavioural Economist

Monthly Archives: October 2015

How we wish that we could understand capital markets. Then it would make sense to do all the things we currently are doing, like make short-term forecasts on equity markets and certain equities. However, predicting markets does not make any sense at all. Improving companies and their communication however does.

Fyr i storm

Historic development of equity prices cannot be predicted because it is truly chaotic. So many uncontrolled forces are at work and their unpredictable interactions are so complex those extremely small variations in the strength of the forces and the way they interact can produce huge differences in outcomes. Historic equity market development is what is called a “level two” chaotic system. Chaotic systems come in two forms.

Read more about the two chaotic systems at EQapital.se

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(when cruising in the 21st century)

This pharma company is not different from other companies except that it may have gone public a nudge to early; did not make it over the critical hurdle; the share price fell apart a few months after the final road show. So apart from struggling with product development and staff problems, Tom, the eager young MBA at the rudder, is increasingly feeling the pressure from the board and main owners over the poor stock performance.

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The investment bank got it all wrong; going public was not heaven. In fact, it was the basement nest to hell; and the problems started when the company went public.

It is clear that too many companies go public without a real plan for stakeholder engagement.

Read more about this in EQapital.se

 

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