The hottest Risk management Substack posts right now

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Risk free rates and value: Dealing with historically low risk free rates

Musings on Markets • 0 implied HN points • 30 Sep 11
💰 Finance Risk management Investment strategy Market Analysis Economic Policy Valuation Techniques
  1. Lower risk free rates mean lower discount rates, which can make assets look more valuable. However, this can be complicated for valuers who want to keep a low value for an asset.
  2. The risk free rate reflects general economic expectations, combining views on inflation and growth. When it's low, it often signals a lack of confidence in the economy's future.
  3. How you value assets today can vary widely. You can stick with current rates for a more dynamic approach or try to normalize past rates for a different perspective, but be careful not to mix inconsistent inputs.

Ruminations on Rogue Trading

Musings on Markets • 0 implied HN points • 23 Sep 11
💰 Finance Trading Risk management Behavioral Finance Regulation Investment Banking
  1. Rogue trading happens when a trader breaks their company's rules, which can lead to huge financial losses or gains. It's not just about losing money; making risky trades can also be considered rogue trading.
  2. There are several reasons why people engage in rogue trading, like feeling addicted to trading or wanting to hit a big payday. Many traders take bigger risks when using money that isn't theirs, especially after experiencing losses.
  3. To prevent rogue trading, companies need to have better risk management systems and only hire cautious traders. Monitoring must be improved and there should be clear consequences for traders who take reckless risks.

Momentum versus Contrarian: Two Reads of the ERP

Musings on Markets • 0 implied HN points • 08 Aug 11
💰 Finance Investing Market Analysis Risk management Economic Trends Financial Models
  1. The equity risk premium (ERP) is important for estimating returns when valuing companies. It's useful to track how it changes, especially during market crises.
  2. A forward-looking approach to ERP, rather than a past-centric one, helps predict stock returns better. You can find tools online to calculate current ERP using market indexes.
  3. Investors react differently to changes in ERP: contrarians see it as a buying opportunity, momentum investors might follow trends, and some may choose to stay in cash until things stabilize.

A Sovereign Ratings Downgrade for the US? End of the world or bump in the road?

Musings on Markets • 0 implied HN points • 28 Jul 11
💰 Finance Bond Markets Equity markets Market expectations Sovereign debt Investments Risk management
  1. The U.S. government isn't likely to default soon, but people's trust in its ability to manage debt has been shaken. Once investors start worrying about default, it's hard to restore that confidence.
  2. The market is already reacting to fears of a U.S. default, with increased costs for protection against it. A formal downgrade from agencies may happen soon, but it will likely not come as a shock.
  3. If there is a downgrade, the cost of borrowing for U.S. companies and risk-free rates will likely rise. This could lead to lower stock prices, although some changes in market prices may have already factored in this risk.

Alternatives to the CAPM: Wrapping up

Musings on Markets • 0 implied HN points • 30 Apr 11
💰 Finance Investment Risk management Valuation Market Analysis Financial Models Investment Risk Valuation Methods Financial Analysis Market Theory Equity Research
  1. 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.
  2. 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.
  3. Keep your methods simple. A straightforward approach, like CAPM, can be useful, and it's important to question and refine your risk assessment regularly.
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Alternatives to the CAPM: Part 5. Risk Adjusting the cash flows

Musings on Markets • 0 implied HN points • 30 Apr 11
💰 Finance Investment Valuation Risk management Econometrics Investing Risk management Valuation Financial Theory Capital Markets
  1. You can adjust cash flows for risk in two main ways: estimating expected cash flows across scenarios and using certainty equivalent cash flows. Both methods aim to accurately reflect investment risk.
  2. Certainty equivalent cash flows account for risk by using a safer value an investor would accept instead of the expected cash flow. This helps to quantify how risk-averse someone is when valuing their investment.
  3. Risk adjusting cash flows isn't necessarily easier than adjusting discount rates. It's important to know when to apply simple methods, like focusing on safe cash flows or dividends, but also to recognize their limitations.

Alternatives to the CAPM: Part 4: Market-Implied cost of equity

Musings on Markets • 0 implied HN points • 30 Apr 11
💰 Finance Equity Investment Valuation Risk Models Investing Valuation Equity Risk management Market Theory
  1. You can calculate the market-implied cost of equity using a simple dividend discount model, which helps you understand if a stock is fairly priced. This method allows you to figure out the expected return on a stock based on its price and future dividends.
  2. Comparing the market-implied cost of equity to a conventional one can help you decide whether to invest in a stock. If the market-implied cost is much higher than your estimate, it might mean the stock is riskier or less attractive.
  3. You can use the market-implied cost of equity for an entire sector so that you have a uniform measure for evaluating companies in that sector. This approach can make it easier to compare different companies without getting lost in individual risks.

Alternatives to the CAPM: Part 3: Connecting cost of debt to cost of equity

Musings on Markets • 0 implied HN points • 30 Apr 11
💰 Finance Capital Markets Investment Theory Risk management Corporate Finance Investment Risk management Capital Markets Financial Analysis Corporate Finance
  1. It's easier to figure out the cost of debt because you can see the interest rate when borrowing. This makes it a more straightforward number to use when looking at a company's finances.
  2. You can estimate the cost of equity by comparing it to the cost of debt and factoring in the volatility of both stocks and bonds. If the cost of debt is 8%, the cost of equity might be higher, like 12%, if stocks are riskier.
  3. This method works best for big companies with significant debt. However, it has limits because equity risk and bond risk are different, so care is needed in using this approach.

Alternatives to the CAPM: Part 2: Proxy Models

Musings on Markets • 0 implied HN points • 29 Apr 11
💰 Finance Investment Theory Market behavior Statistical Analysis Financial Metrics Investing Risk management Economic Theory Market Analysis Quantitative Analysis
  1. Proxy models move away from traditional finance theories like CAPM, focusing instead on how markets actually price investments. They try to explain returns based on observable factors rather than assumptions about investor behavior.
  2. Research by Fama and French found that factors like market capitalization and price-to-book ratios are better at explaining stock returns than the original CAPM betas. This means smaller companies and those with lower price-to-book ratios tend to have higher returns.
  3. While proxy models can improve expected return calculations, they come with risks like data mining and standard error problems. This means the results may not always be reliable or may misrepresent the true risk involved.

Alternatives to the CAPM: Part 1: Relative Risk Measures

Musings on Markets • 0 implied HN points • 28 Apr 11
💰 Finance Investment Risk management Asset Pricing Market Analysis Corporate Finance Asset Pricing Investment Theory Risk management Corporate Finance Market Analysis
  1. The CAPM model has flaws and many people have shifted to using better methods for measuring risk and estimating returns. It's criticized for being too simple and for its dependence on past market prices.
  2. Multi Beta Models and Market Price based Models offer alternatives to CAPM by considering multiple factors or standard deviations instead of relying on a single market beta. These models are intended to improve return estimates but have their own complexities.
  3. Accounting information based models use a company's financial health as a measure of risk. They connect risk to fundamental business factors but can be misleading due to the way accounting numbers are reported.

Breach of Trust: Bank Valuation after the banking crisis

Musings on Markets • 0 implied HN points • 29 Mar 11
💰 Finance Banking Valuation Investment Regulation Market risk Banking Investing Regulation Valuation Risk management
  1. Investors used to trust banks because they thought regulations kept them in check. Now, that trust is gone, and we can’t just assume all banks will act responsibly anymore.
  2. The way banks determine dividends and capital requirements has changed. We should look at expected growth and regulatory needs instead of just past dividends to judge their value.
  3. Banks need to be more open about their finances and risks. This means clearer details in their financial statements so investors can make better-informed decisions.

Catastrophe and consequences for value

Musings on Markets • 0 implied HN points • 22 Mar 11
💰 Finance Market Analysis Risk management Investment strategy Economic Impact Asset Valuation
  1. Natural disasters can change how we think about risk over long periods of time. We often base our expectations on past events, which might not be enough for rare but powerful situations.
  2. Experts often seem surprised by big events, even though they are supposed to know what to expect. This makes us question what we really mean by 'expertise' when big surprises keep happening.
  3. After a disaster, companies and investors face big challenges in managing risk. It's harder to prepare for unpredictable events, and these events can seriously affect the value of businesses and the market.

A tide in the affairs of men...

Musings on Markets • 0 implied HN points • 14 Mar 11
💼 Business Investment Finance Risk management Entrepreneurship Corporate strategy Investment Corporate Risk management Success Strategies Entrepreneurship
  1. Luck plays a big part in business success, but it's what companies do with that luck that really matters. Successful businesses build on good luck and make it a stepping stone for more success.
  2. Good risk-takers know how to take advantage of lucky moments and also minimize their losses when things go wrong. They are prepared for the ups and downs of business.
  3. Every person will experience good and bad luck in their careers. How we respond to that luck can decide if we succeed or just get by.

Luck versus skill: How can you tell?

Musings on Markets • 0 implied HN points • 12 Mar 11
💰 Finance Investment Risk management Behavioral Finance Market Analysis Portfolio Management
  1. It can be hard to tell if someone in finance is successful because of luck or skill. This confusion makes it tricky to reward them appropriately.
  2. In sports, it's easier to see skill because success is clear and happens often, while in finance, success is more subjective and can happen by chance.
  3. To find skilled investors or managers, look for those who are consistent in their success, transparent about their strategies, and humble enough to acknowledge the role of luck.

Buffett and Black-Scholes

Musings on Markets • 0 implied HN points • 01 Mar 11
💰 Finance Investing Options Valuation Models Academics Investing Market Analysis Valuation Risk management Derivatives
  1. Warren Buffett believes the Black-Scholes model gives bad values for long-term options, which is a viewpoint that some disagree with.
  2. Buffett's opinions on option valuation may not consider newer methods that adjust the Black-Scholes model for better accuracy.
  3. You can still be a successful investor without knowing how to value options, as long as you avoid investments that rely heavily on them.

Equity Risk Premiums: The 2011 Edition

Musings on Markets • 0 implied HN points • 25 Feb 11
💰 Finance Investing Risk management Corporate Finance Market Analysis Valuation Investment Risk management Corporate Finance Market Analysis Valuation
  1. The equity risk premium is how much more investors expect to earn from stocks compared to risk-free investments. It's influenced by how investors feel about the market.
  2. There are three main ways to estimate the equity risk premium: surveying people's opinions, looking at historical data, and calculating future expectations based on current stock prices.
  3. Which equity risk premium to use depends on your situation. If you’re assessing a company based on current market conditions, use today's implied premium; long-term investors can take a broader view.

The Shift to Buybacks: Implications for investors

Musings on Markets • 0 implied HN points • 01 Feb 11
💰 Finance Investing Stock Markets Dividends Corporate Finance Risk management Investing Markets Corporate Finance Stock Buybacks Dividends
  1. Many companies are moving from paying dividends to doing stock buybacks. This means fewer stocks will pay dividends, but those that do may be more reliable.
  2. If you're not focused on dividends but want cash returns, consider stock buybacks as a way to profit. Just remember that buybacks can be risky and are not guaranteed.
  3. For long-term growth investors, buybacks can be a sign of maturity in a company. Look for firms that might grow in value because of buybacks, but be cautious when such announcements come.

How much cash is too much? Looking at Apple

Musings on Markets • 0 implied HN points • 19 Jan 11
💼 Business Finance Investing Corporate Economics Valuation Corporate Finance Investment strategy Market Analysis Risk management Company Valuation
  1. Cash balance should be compared to low-risk investments, not just operating costs. It's important to know how a company is using cash, since unnecessary risk can harm investors.
  2. Companies like Apple that effectively manage cash can be trusted to use it wisely. A good track record is key to determining how much cash is too much.
  3. Too much cash can lead to bad investment decisions, which could hurt company value. Keeping cash can be smarter than spending it poorly, especially if the company is performing well.

Herding behavior: Why, so what and what if?

Musings on Markets • 0 implied HN points • 15 Jan 11
💰 Finance Investment Strategies Market Trends Behavioral Finance Risk management Corporate Finance Investment Strategies Market behavior Hedge Funds Risk management Corporate Finance
  1. Herding behavior is when people follow the crowd, which we see in many areas of life, including finance. This can lead to investors buying or selling the same stocks at the same time.
  2. This behavior can cause problems like pricing bubbles and make markets more volatile. When many people act in the same way, it can lead to big changes in stock prices.
  3. Investors can make money by either joining the herd during trends or by going against it if they have a strong understanding and confidence in their choices. But it takes skill to do it successfully.

Making money off illiquidity: Two Strategies

Musings on Markets • 0 implied HN points • 27 Dec 10
💰 Finance Investing Liquidity Risk management Investing Market Trends Risk management Financial Strategies Economic Theory
  1. You can take advantage of illiquidity by buying assets when their prices are low due to a lack of buyer interest. This strategy allows you to sell them later when prices recover, potentially making a profit.
  2. Using leverage can help increase your possible returns when investing in illiquid assets, but it also raises your need for liquidity, so you must be careful and patient.
  3. Being good at predicting when markets will become more or less liquid can help you shift your investments smartly. This means keeping an eye on market trends and changes in trading volume to make better decisions.

How do you evaluate risk taking?

Musings on Markets • 0 implied HN points • 19 Nov 10
💰 Finance Risk Assessment Investment Strategies Market behavior Economic Policy Corporate Governance Risk management Investment Corporate strategy Decision-making Market Analysis
  1. Risk taking should be judged not just by the outcome but also by the process and information available at the time. Good decisions can sometimes lead to bad outcomes, and bad decisions can lead to success.
  2. It's important to consider the side effects of risk taking, like how it impacts others. A decision might be profitable for one person but harmful to society as a whole.
  3. How we reward or punish risk taking now can influence future behavior. If taking risks is consistently rewarded, more people will take risks in the future.

The secret to investment success: Self Awareness?

Musings on Markets • 0 implied HN points • 11 Nov 10
💰 Finance Investing Psychology Market Analysis Investment Strategies Personal Finance Investment Strategies Behavioral Finance Market Analysis Risk management Personal Finance
  1. Investment success isn't just about strategy; it's about knowing yourself. How patient are you? Do you handle stress well? These traits matter.
  2. Different investment philosophies work for different people. What might be a good strategy for one person could be a bad fit for someone else.
  3. Self-awareness can help you choose the right investment approach. Think about your personality and how you react to different situations before investing.

Nassim Taleb and the Nobel Committee

Musings on Markets • 0 implied HN points • 19 Oct 10
💰 Finance Investment Economics Financial Theory Market Analysis Risk management
  1. Nassim Taleb criticized the Nobel Committee for awarding finance prizes to certain economists. He believes their theories contributed to financial crises.
  2. Each economist, like Merton Miller and Harry Markowitz, had ideas that challenged common practices in finance. Their theories on capital structure and risk management still hold value.
  3. Real traders often ignore financial theories. They focus more on making deals and trades rather than the academic theories that some believe caused financial failures.

Jerome Kerviel is sentenced: Ruminations on risk and trading scandals

Musings on Markets • 0 implied HN points • 07 Oct 10
💰 Finance Trading Risk management Behavioral Finance Banking Economics Risk management Trading Behavioral Finance Banking Regulation
  1. Younger and single people tend to take more risks than older or married individuals. This is especially true in trading where many traders fit this profile.
  2. Traders often take bigger risks when using money that isn't their own, like 'house money'. This can lead to careless decisions.
  3. When traders start losing money, they often try to recover it by making bigger bets, which can lead to even worse losses. It's important to monitor and control losses early on.

A Corporate Governance Risk Manual

Musings on Markets • 0 implied HN points • 25 Sep 10
💼 Business Corporate Governance Risk management Finance Emerging Markets
  1. Risk management is divided among different fields, like finance, strategy, and statistics. This makes it complicated and sometimes inconsistent.
  2. The author created a manual on risk governance for company directors after giving seminars around the world. He wants to share this knowledge with a broader audience.
  3. The manual not only summarizes important ideas but also includes tasks to help businesses evaluate their risk management practices.

Capital Structure: Optimal or Opportunisitic?

Musings on Markets • 0 implied HN points • 09 Sep 10
💼 Business Corporate Finance Investment Analysis Risk management
  1. Finding the right balance between debt and equity is crucial for businesses. This balance can help lower costs and improve management discipline.
  2. Companies often make financing decisions based on their perceptions of debt costs versus equity costs. This can lead to risky borrowing if firms get too confident.
  3. Setting a flexible range for optimal debt levels can help companies avoid taking on too much debt. This way, they can react to market conditions without overextending themselves.

Unstable risk premiums: A new paper

Musings on Markets • 0 implied HN points • 01 Sep 10
💰 Finance Investing Risk management Market Analysis Corporate Finance Financial Theory
  1. Risk premiums are less stable and more unpredictable now. This means that how much extra return investors expect can change a lot across different markets.
  2. Different markets, like bonds and real estate, are showing more similarities in risk premiums. This lets investors make better decisions by noticing when these premiums diverge.
  3. There are many ways to estimate risk premiums, and the paper offers a guide on when to use current numbers versus historical ones. This helps finance professionals make clearer choices.

What if nothing is risk free?

Musings on Markets • 0 implied HN points • 24 Jul 10
💰 Finance Investment Corporate Finance Risk management Market Analysis Economic Theory
  1. Risk-free investments are often assumed to exist, but government defaults challenge this idea. If governments can default, then no investment can really be guaranteed safe.
  2. The presence of a risk-free investment affects how people build their investment portfolios and manage companies. It allows investors to balance their risk without needing different types of assets.
  3. Without a risk-free investment, investors become more cautious and may charge more for risk. This can lead to lower prices for stocks and corporate bonds, affecting overall market stability.

Will the financial overhaul bill fix what's wrong with banks?

Musings on Markets • 0 implied HN points • 29 Jun 10
💰 Finance Banking Regulation Investing Risk management Financial Crisis
  1. The new financial bill may not stop banks from getting too big. It sets some fees for larger banks but doesn't really limit their growth.
  2. The bill tries to reduce risky behavior by banks, like investing in hedge funds, but banks might just find new ways to take risks instead.
  3. While the bill could lower banks' profits in the short run, it might make them more valuable by scaring off competition, leading to higher returns in the long run.

Currency Choices in Valuation

Musings on Markets • 0 implied HN points • 16 Apr 10
💰 Finance Valuation Currency Risk Investment Analysis Valuation Currency Risk management Investment Analysis Financial Statements
  1. You should value a company in the currency that is easiest for you to access information in. It shouldn't matter which currency you choose because the company's value should stay the same.
  2. Your discount rate is influenced by the currency you select, especially the risk-free rate, which varies with inflation. Always ensure your cash flows and discount rate are in the same currency.
  3. To avoid currency confusion, you can analyze in real terms, using real discount rates and cash flows. It's important to stick with your initial currency choice throughout the analysis.

Government Default and Riskfree Rates

Musings on Markets • 0 implied HN points • 22 Mar 10
💰 Finance Investing Economics Risk management Bond Market
  1. In some emerging markets, companies can borrow money at lower rates than their own government, especially if the debt is in foreign currency.
  2. It's surprising that investors feel safer lending to companies like Berkshire Hathaway than to the US government, even though the government can print money.
  3. The market seems to be signaling to the US government that it needs to improve its financial health quickly, or it may face higher borrowing costs in the future.

Equity Risk Premiums and the Fear of Catastrophe

Musings on Markets • 0 implied HN points • 09 Mar 10
💰 Finance Investments Risk management Market Trends Economic Theory Data Analysis
  1. The equity risk premium is what investors expect to earn above a safe rate like treasury bonds for taking on the risk of stocks. It helps explain stock market behavior over time.
  2. Using historical data for equity risk premiums can be misleading because it looks back rather than forward. A better method is to calculate an implied premium based on current stock prices and expected future cash flows.
  3. Fear of economic disasters strongly affects equity risk premiums. During crises, fear increases and affects investors' expectations, leading to quick shifts in the premium values.

The Credit Default Swap (CDS) Market

Musings on Markets • 0 implied HN points • 12 Feb 10
💰 Finance Investments Risk management Market Analysis Financial Instruments Economic Factors Investing Insurance Risk management Market Analysis Financial Instruments
  1. A Credit Default Swap (CDS) is like insurance for investors against a company or government defaulting on its debt. You pay a fee to protect your investment, and if they default, you get your money back.
  2. The CDS market grew rapidly in the past two decades, with more people buying and selling these contracts, sometimes even on debts that didn't exist. This means lots of money was tied up in insuring potential defaults.
  3. Investors use CDS not just for protection but also as a way to speculate and make money. If they think the default risk is going up, they can buy CDS now and sell them later for a higher price.

Bounceback in Multiples: The 2010 story

Musings on Markets • 0 implied HN points • 09 Jan 10
💰 Finance Investing Market Trends Risk management Economic Indicators Valuation Metrics Investing Market Trends Risk Assessment Economic Indicators Valuation
  1. Risk premiums have returned to pre-crisis levels, which has also led to an increase in stock multiples. This means investors are feeling less cautious now.
  2. The median Price Earnings (PE) ratio for US stocks improved significantly from its low point in 2009, showing a recovery in the market.
  3. The change in stock multiples is linked to investor risk appetite, and understanding this is key when deciding if a stock is cheap or expensive.

Reversal in Risk Premiums (or premia): The 2010 story

Musings on Markets • 0 implied HN points • 09 Jan 10
💰 Finance Market Trends Bond Markets Investing Market Analysis Risk management Economic Trends
  1. Risk premiums for equities have decreased significantly since the peak during the market crisis, returning to pre-crisis levels. This means investors are demanding less extra return for holding riskier stocks now compared to late 2008.
  2. Bond default spreads, which widened dramatically during the crisis, have also fallen back to where they were before, indicating a recovery in confidence in bond markets.
  3. Emerging markets faced severe challenges during the crisis, but by early 2010, their sovereign default spreads dropped back to pre-crisis levels, suggesting improved market stability and investor sentiment.

Dubai and the "implicit" guarantee

Musings on Markets • 0 implied HN points • 09 Dec 09
💰 Finance Lending Debt Risk management Market Analysis Investing
  1. Dubai's financial crisis was partly due to a collapse of trust in what many call an 'implicit guarantee'. People thought the UAE would always support Dubai financially, but that didn't happen.
  2. Many loans are made with the assumption that someone richer will step in to help if things go wrong. This is like a family member trusting a wealthy parent will cover their child's debts.
  3. When too much reliance is placed on these implicit guarantees, it can lead to serious problems in the financial system. Investors might not really understand how much debt is out there because it's not clearly stated.

Macro Bets: A general framework..

Musings on Markets • 0 implied HN points • 23 Nov 09
💰 Finance Investment Market Trends Risk management Economic Analysis Behavioral Finance Investing Market Analysis Risk management Behavioral Finance
  1. Making macro bets can be risky. You need a unique advantage, like having more patience or better trading skills than other investors.
  2. It's better to keep your macro bets simple. If you believe in something like rising gold prices, it makes more sense to directly buy gold instead of a related company that has other risks.
  3. The main danger with macro bets is being wrong about your prediction or the market not agreeing with you. With so many investors out there, standing out is tough.

The secrets behind John Paulson's success...

Musings on Markets • 0 implied HN points • 16 Nov 09
💰 Finance Investing Market Analysis Hedge Funds Risk management Economic Trends Investing Market Analysis Risk management Hedge Funds Economic Trends
  1. John Paulson successfully predicted the housing market crash by betting against it, which made him stand out during the 2008 financial crisis. He was able to see the bubble when many others couldn't.
  2. It's important for investors to watch both the stock and bond markets because they can offer clues about each other. When these markets react differently, it can signal that something is wrong.
  3. When valuing struggling companies, looking at bond market information can help refine those valuations. This suggests collaboration between equity and bond analysts could be beneficial.

The Agency for Financial Stability? Good idea?

Musings on Markets • 0 implied HN points • 10 Nov 09
💰 Finance Banking Regulation Risk management Economic Policy Monetary Policy Banking Regulation Risk management Monetary Policy Economic Growth
  1. Creating a new Agency for Financial Stability may not be a good idea. The Federal Reserve already has competent people managing banking regulations, so restructuring might not improve things.
  2. Systemic risk is a problem because it affects everyone but only a few get the rewards. We should focus on making sure that those who take big risks also face the consequences if things go wrong.
  3. Instead of establishing a new agency, we should empower existing banking authorities to monitor risks better. It's important for regulators to be proactive rather than just reacting to past crises.

Bad companies and good investments...

Musings on Markets • 0 implied HN points • 05 Nov 09
💰 Finance Investing Corporate Governance Market Analysis Business strategy Risk management
  1. Warren Buffett often invests in companies that others see as boring or bad, because he can identify good value at the right price.
  2. A company can be a poor business yet still be a great investment if bought at a low enough price.
  3. Buffett's approach shows that market timing and trends aren't as important as finding undervalued opportunities.