The hottest Investment Risk Substack posts right now

The market is facing a critical moment, showing signs of weakness in its flow. It's important to pay attention to these signs.
For a long time, the same few popular stocks have been the focus, but there's less new money coming in from big investors. This could be a problem for future growth.
Retail traders have been the main buyers lately, but if their buying decreases, there could be trouble ahead for the market that relies on their activity.

2022 was a tough year for stocks, with the S&P 500 dropping about 18%. Negative years are common in the stock market, reminding us that investing carries risks.
Inflation was a major factor in the market's decline, impacting returns on stocks. Higher costs of living affected investors' expectations and how companies performed.
Looking forward to 2023, expected returns on stocks are higher, around 9.82%. However, market conditions can change, making it important for investors to stay informed and adjust their strategies.

SVB's collapse impacts capital markets, leading to fear and hesitation in committing funds.
Climate tech companies are disproportionately affected by the liquidity crunch due to their capital needs and revenue profiles.
Founders in the climate tech space should be prepared for higher financing risk and seek alternative forms of capital.

Bond markets give hints about future economic growth and inflation. It's important to watch these markets to understand the economy better.
In 2018, the bond yield curve flattened, meaning short-term rates increased. This change often gets people worried about potential recessions.
Both bond and stock markets reacted similarly in 2018, with investors feeling more cautious and demanding higher prices for taking risks.

Investing in different countries comes with varying levels of risk. Countries with unstable governments or economies can be more risky, so understanding these factors is key to making smart investment choices.
When valuing a company, you need to consider where it operates, not just where it's based. A company's risks come from its operations in different countries, which can affect its overall risk profile.
Currency risk and country risk are related but should be treated separately. Understanding the currency’s performance and the country’s economic health can help you make better financial decisions.

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Corruption in a country can act like a hidden tax, raising costs for businesses and creating an uneven playing field. Companies that navigate corrupt practices well may even gain a competitive edge over those that don't.
Violence, whether from war or crime, makes it expensive and risky to run a business. Companies must spend more on security and may face high costs if violence disrupts their operations.
The protection of property rights is crucial for businesses. If a legal system fails to enforce these rights, the value of a company and its assets can drop significantly.

Globalization affects all investors, even those focused solely on domestic stocks. Large companies often get a big part of their income from international markets, meaning domestic investments can still carry foreign risks.
Central banks have less control over economic growth due to globalization. Their traditional methods to influence interest rates and stimulate economies are being challenged by the interconnectedness of global markets.
Country risk involves various factors, including corruption and legal protections. Investors need to be aware of these risks and adjust their expectations and strategies accordingly.

Ignoring risk in investments is a big mistake. You need your own way to measure and manage risk because investments have different levels of risk.
Using numbers is important for valuing companies, but don't forget the stories behind them. The results in numbers should reflect the company's real situation.
Keep your methods simple. A straightforward approach, like CAPM, can be useful, and it's important to question and refine your risk assessment regularly.

Fear and greed greatly influence the stock market, especially during uncertain times like pandemics. These emotions can cause significant market ups and downs, making it hard to predict what will happen next.
Young companies are bouncing back faster and more robustly from market downturns compared to older firms. This might be because young businesses are seen as higher growth opportunities, attracting more investor interest.
Access to capital is crucial for businesses in any life stage, but young and declining companies are especially vulnerable during crises. If they can't get funding, they risk shutting down or being sold for less than they are worth.