The hottest Risk management Substack posts right now

And their main takeaways
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Managing private equity portfolios

Klement on Investing • 2 implied HN points • 13 Feb 24
💰 Finance Investments Private Equity Risk management
  1. Private equity managers have unique challenges in balancing portfolio concentration for high returns and diversification to manage risk.
  2. Private equity portfolio characteristics differ from those of listed equity funds, with smaller, riskier holdings often generating the most alpha.
  3. Performance in private equity is less about individual deals and more about portfolio construction, where fund manager skill plays a significant role.

A guide to navigating quarterly noise-flow

Buggy Humans in a Messy World • 1 HN point • 15 Jan 24
💰 Finance Investing Analysis Business strategy Market behavior Risk management
  1. The most reliable path to adequate returns involves buying good businesses at fair valuations and holding onto them for the long term.
  2. View each quarter as part of a continuing trajectory instead of in isolation, placing importance on long-term trends over short-term fluctuations.
  3. Focus on controllables like relative performance, balance sheet metrics, and wider error bands around long-term trends for better analysis of quarterly results.
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Value Investing I: The Back Story

Musings on Markets • 19 implied HN points • 23 Oct 20
💰 Finance Investment Market Trends Behavioral Finance Valuation Methods Risk management
  1. Value investing does not have a single definition; different investors have their own ways of approaching it. Some focus only on low price-to-earnings or book value, while others consider management quality and market conditions.
  2. There are different styles of value investing like contrarian investing, where you buy stocks that have dropped in price, or activist investing, where you aim to change company management to unlock value. Each has its own strategy for finding value.
  3. The belief that value investing is the best way to achieve long-term success comes from both success stories and academic support. Many investors follow this philosophy because it combines strong principles and practical results.

January 2019 Data Update 5: Hurdle Rates and Costs of Financing

Musings on Markets • 19 implied HN points • 24 Jan 19
💰 Finance Corporate Finance Investment Analysis Risk management Valuation
  1. Hurdle rates are important because they help companies decide whether to invest in a project. They reflect the risks involved and the expected returns for different funding sources.
  2. Businesses face various types of risks like business, financial leverage, country, and currency risks. Understanding these risks helps in accurately calculating the cost of capital.
  3. It's crucial to maintain consistency in currency analysis, adjusting for inflation and risk, as it affects investment evaluations. Choosing a currency should not change the project's perceived risk or outcome.

January 2019 Data Update 1: A reminder that equities are risky, in case you forgot!

Musings on Markets • 19 implied HN points • 03 Jan 19
💰 Finance Investing Market Trends Equities Risk management Economic Analysis
  1. Investing in stocks comes with risk, and it’s important to remember that not every dip in prices is a chance to buy. Stocks can lose value, and there are reasons why they usually offer higher returns than safer investments.
  2. The equity risk premium, which tells us how much investors are being paid to take on the risk of stocks, has increased recently. This might suggest that stocks are undervalued compared to historical norms.
  3. Looking ahead, market conditions could be challenging with potential slowdowns in economic growth and global crises. Understanding these risks helps investors make more informed decisions.

Investing Whiplash: Looking for Closure with Apple and Amazon!

Musings on Markets • 19 implied HN points • 03 Dec 18
💰 Finance Investing Market Analysis Valuation Risk management Behavioral Finance
  1. When investing, it's smart to set rules to avoid emotional decisions, like using limit orders to fight against personal biases.
  2. Intrinsic value of stocks can change over time, influenced by both company performance and broader market conditions.
  3. Investors should be flexible in their strategies, being willing to sell sooner if prices align with their valuations, even if it means not holding forever.

Edition 22: A framework to securely use LLMs in companies - Part 2: Managing risk

Boring AppSec • 1 HN point • 13 Aug 23
🕹 Technology AI Cybersecurity Risk management Data Privacy Cloud Computing
  1. Using third-party LLM providers can offer advantages like minimal setup complexity and experimentation with low upfront costs.
  2. Challenges with third-party LLMs include concerns about data security, biases in responses, and potential cost overruns.
  3. To manage risks when integrating LLMs, consider implementing an LLM gateway for traffic routing, regular auditing and testing, and a monitoring layer for usage.

How to build an optimal portfolio?

Reminiscences Of A Young & Naïve Financier • 0 implied HN points • 21 Feb 23
💰 Finance Investing Portfolio Management Diversification Asset Classes Risk management
  1. Risk and return are interconnected in investing - higher risk typically means higher expected return.
  2. Diversification is key to building an optimal portfolio - uncorrelated assets help to reduce risk while maintaining returns.
  3. Asset classes like Gold, even with historically low returns, can play a vital role in a diversified portfolio due to their uncorrelated benefits.

Alert: Central Bank of Nigeria Circular PSM/DIR/PUB/CIR/001/039

RegAlert • 0 implied HN points • 27 Jun 23
💰 Finance Regulations Payments Banking Risk management Standards
  1. The Central Bank of Nigeria issued guidelines for contactless payments in the country, aiming to standardize operations and promote innovation while ensuring financial system stability.
  2. Banks, financial institutions, and payment service providers are required to adhere to these guidelines, implement risk management processes, and maintain relevant standards for contactless payments.
  3. Participants in contactless payments in Nigeria must download and adhere to Circular PSM/DIR/PUB/CIR/001/039 available on the Central Bank of Nigeria's website.

Alert: Central Bank of Nigeria Circular FPR/DIR/PUB/CIR/007/075

RegAlert • 0 implied HN points • 23 Jun 23
💰 Finance Regulations Risk management Compliance
  1. Financial institutions must establish measures to mitigate risks from high-risk customers, including Politically Exposed Persons (PEPs)
  2. The Central Bank of Nigeria has issued a guidance note to help with assessing and mitigating these risks
  3. Immediate compliance is expected from all financial institutions regarding the guidance note on Politically Exposed Persons (PEPs)

Alert: Central Bank of Nigeria Circular OFI/DOA/CON/OFI/001/304

RegAlert • 0 implied HN points • 09 Jan 23
💰 Finance Regulations Investments Risk management
  1. Financial institutions in Nigeria's OFIs are directed to divest from funds managed by uninsured entities, aiming to reduce high credit and liquidity risks
  2. Existing placements in uninsured entities must be liquidated within 90 days to safeguard depositors' funds
  3. This regulation is implemented by the Central Bank of Nigeria to protect the financial interests of the depositors

Alert: Central Bank of Nigeria Circular FPR/DIR/PUB/CIR/001/049

RegAlert • 0 implied HN points • 24 May 22
💰 Finance Banking Regulation Risk management Compliance
  1. Financial institutions must comply with the Regulatory Guidelines for the Redesigned Credit Risk Management System.
  2. Enforcement of the 'submit before disbursement' requirement begins on August 1, 2022.
  3. Customer accounts must be in the 10-digit Nigeria Uniform Bank Account Number format by June 20, 2022 to be enrolled onto the CRMS.

Alert: Central Bank of Nigeria Circular FPR/DIR/PUB/CIR/001/042

RegAlert • 0 implied HN points • 25 Apr 22
💰 Finance Regulation Risk management
  1. The Central Bank of Nigeria issued a circular to Other Financial Institutions (OFIs) about implementing effective risk-based approaches to combat money laundering and terrorism financing.
  2. The circular introduces a guidance note to help OFIs identify, assess, and mitigate money laundering/terrorism financing risks in their operations.
  3. OFIs are required to comply with the guidance note immediately.

Alert: Central Bank of Nigeria Circular BSD/DIR/PUB/14/063

RegAlert • 0 implied HN points • 02 Sep 21
💰 Finance Regulation Banking Risk management
  1. The Central Bank of Nigeria issued new guidelines on liquidity monitoring tools (LMT) in September 2021 to improve liquidity risk management in financial institutions.
  2. Financial institutions must now establish robust LMT frameworks to effectively identify and address liquidity risks in a timely manner.
  3. Institutions are required to regularly submit detailed LMT reports to the regulatory body for monitoring and supervision purposes.

Alert: Central Bank of Nigeria Circular BSD/DIR/PUB/14/063

RegAlert • 0 implied HN points • 02 Sep 21
💰 Finance Regulatory Compliance Risk management Banking
  1. The Central Bank of Nigeria issued revised guidelines on supervisory review process for internal capital adequacy assessment to enhance supervision and risk management in financial institutions.
  2. Financial institutions in Nigeria are required to comply with the new guidelines to ensure accurate assessment of internal capital adequacy.
  3. The aim of the revised guidelines is to strengthen the supervision and risk management practices in the financial sector of Nigeria.

Alert: Central Bank of Nigeria Circular PSM/DIR/CON/INM/011/091

RegAlert • 0 implied HN points • 09 Jul 21
💰 Finance Regulations Risk management Financial Institutions
  1. Financial institutions in Nigeria must follow the regulatory framework for mobile money services to ensure transaction safety.
  2. Institutions need to strengthen their risk management systems for mobile money operations.
  3. Cooperation with the Central Bank of Nigeria is necessary to provide important data for oversight of mobile money transactions.

How to Succeed on a Planet in Crisis

The Snap Forward • 0 implied HN points • 15 Feb 24
🌞 Climate & Environment Climate Crisis Adaptation Ethics Risk management Community Engagement
  1. The course focuses on preparing individuals for the challenges of a rapidly-worsening planetary crisis by teaching strategies for making informed decisions and planning for the future.
  2. Participants will gain new frameworks to navigate emerging patterns, develop a stronger personal ruggedization strategy, and integrate climate foresight into their careers and daily lives.
  3. The course emphasizes the importance of understanding the scale of change, assessing relative safety in different locations, and building a platform for success amidst uncertainty by engaging in critical conversations and forming shared visions.

Data Deep Dive: Web Mining Shows Inflections in Apparel Sector Results

The Data Score • 0 implied HN points • 27 Jul 23
💼 Business E-commerce Data Analytics Retail Marketing Risk management
  1. Monitoring price trends is crucial for understanding and analyzing competitive value and market strategies of businesses.
  2. Web-mined pricing data can provide early insights into companies' pricing strategies and their ability to execute them.
  3. Analyzing web-mined pricing data requires proper cleansing, enrichment, and interpretation, considering limitations such as data gaps and differences between online and offline prices.

Sequential vs. Parallel projects on a small team

The Daily Developer • 0 implied HN points • 18 Feb 24
💼 Business Management Risk management Team Dynamics Cash Flow
  1. In a small team, running projects concurrently decreases execution risk and provides more learning opportunities.
  2. Running projects sequentially keeps cash burn lower but increases the risks associated with failure.
  3. Insurance companies diversify to reduce risk, similar to the concept of running parallel projects on a small team.

"Bangsun Tech" STAR Market IPO Application Accepted

CyberSecurityMew • 0 implied HN points • 20 Jun 23
💼 Business Technology Finance IPOs Risk management
  1. Bangsun Tech's IPO application was accepted by the Sci-Tech innovation board on June 19, 2023.
  2. The company specializes in big data infrastructure software development and application solutions, particularly in smart finance and cybersecurity.
  3. Bangsun Tech plans to focus on expanding its products in intelligent risk control, anti-fraud, and anti-money laundering fields, as well as diversifying into areas like cybersecurity and transportation.

Equal Ventures Focus Area: Insurance

Equal Ventures • 0 implied HN points • 12 Aug 20
💼 Business Insurance Digital Transformation Risk management
  1. The insurance industry is experiencing significant changes due to digital transformation affecting various parts of the insurance value chain.
  2. Insurers are increasingly utilizing signal data from various sources to enhance underwriting results and risk management, leading to the emergence of Managing General Agents (MGAs) benefiting from this trend.
  3. Opportunities in the insurance space include developing innovative insurance solutions that combine digital and insurance products, enhancing efficiency in the broker landscape through digital transformation, and creating infrastructure for improved efficiency in reinsurance and Managing General Agent markets.

Product Management Skills - Articulating assumptions and acting with intention

Joseph Gefroh • 0 implied HN points • 22 Feb 24
💼 Business Product Management Decision-making Problem Solving Risk management Validation
  1. Product Managers need to be intentional with their decisions to drive beneficial outcomes for the company. Lack of intentionality can lead to arbitrary decisions that may not have the desired effect.
  2. Being intentional involves articulating the thought process behind proposals, validating assumptions, and being open to feedback. This increases the chances of success in product management.
  3. To effectively manage a product, one should thoroughly discover and define the problem space, propose viable approaches, form concise hypotheses, articulate key assumptions, validate those assumptions, make informed decisions, and monitor outcomes for continuous improvement.

Product Management Skills - Articulating impact risk

Joseph Gefroh • 0 implied HN points • 18 Feb 24
💼 Business Product Management Risk management Revenue Models
  1. As a product manager, it's crucial to articulate and understand the impact risks associated with your work. This helps in prioritizing and addressing potential negative effects.
  2. Understanding how your company makes money is vital as a product manager. Connecting your work to the company's bottom line increases your impact and value.
  3. Knowing what is important to your company and where your team's efforts fit in is essential. Aligning your work with company priorities and goals helps mitigate impact risks and drive meaningful outcomes.

Product Management Skills - Articulating adoption risks

Joseph Gefroh • 0 implied HN points • 16 Feb 24
💼 Business Product Management Risk management UX Design Customer Satisfaction
  1. Articulating adoption risks is crucial in product management to understand and address potential negative effects of a new solution.
  2. For a product manager, balancing the levers of creating value while ensuring adoption by users is key to successful product development.
  3. Adoption risks can be mitigated by strategies like improving awareness, simplifying usage, setting up effective defaults, and considering whether adoption is even desired for certain features.