The simplest example of why imitating Warren Buffett’s value investing strategy is a bad idea

By , August 19, 2012 8:48 pm

"The market can stay irrational longer than you can stay solvent."

John Maynard Keynes

What happened to AOL?

By , August 18, 2012 8:01 pm

Lotteria copies the Rice Burger, how long can VietMac stand?

By , August 18, 2012 5:14 am

Lotteria has approximately 80 stores, higher bargain power with landlords, better brand recognition, arguably more experience in process.

Despite receiving investment, VietMac doesn’t seem to scale quickly enough.

The whole barrier to entry of VietMac is its product which is relatively easy to imitate, and it is.

Code for Efficient Frontier, Global Minimum Variance Portfolio, Tangeng Portfolio

By , August 7, 2012 8:57 pm
/* 
 * This pseudo-code class entails the risk and expected return values for efficient frontier
 * In real code, accessors and mutators should be provided
 */
class EfficientFrontier()
{
	float[] return;	// series of expected returns on efficient portfolios
	float[] risk;	// series of standard deviation of returns of efficient portfolios
	float gmvpReturn;	// expected return of Global Minimum Variance Portfolio
	float gmvpRisk;	// standard deviation of returns of Global Minimum Variance Portfolio
	float tangentReturn;		// expected return of the efficient portfolio tangent to Capital Market Line
	float tangentRisk;	// standard deviation of returns of the efficient portfolio tangent to Capital Market Line
	float shortConstraintMaxReturn;	// maximum expected return that an efficient portfolio can reach
	float shortConstraintMaxRisk;	// standard deviation of returns of the efficient portfolio with maxmimum return
}

/* 
 * This pseudo-code function produces position of Markowitz Efficient Frontier
 */
EfficientFrontier getEfficientFrontier(float[][] price)
{
	const float c1 = 0.1;	// first substitute of risk-free rate for Black's shortcut
	const float c2 = 0.2;	// second substitute of risk-free rate for Black's shortcut
	float[] annualReturn = annualReturn(price);
	float[][] annualVarcovar = annualVarcovarMatrix(price);
	annualVarcovar = InverseMatrix(annualVarcovar);
	
	for (i = 0 ; i < NUMBER_OF_VARIABLES ; i++)
	{
		for (j = 0 ; j < NUMBER_OF_VARIABLES ; j++)
		{
			z1[i] += annualVarcovar[i][j] * (annualReturn[j] - c1);
		}
		sumz1 += z1[i];
		x1[i] = z1[i] / sumz1;
	}
	
	// repeat for z2 & x2;
	
	float expectedReturn1, expectedReturn2;

	for (i = 0 ; i < NUMBER_OF_VARIABLES ; i++)	// calculate expected return
	{
		expectedReturn1 += annualReturn[i] * x[i];
	}
	
	// repeat for expectedReturn2;
	
	variance1 = z1[] * annualVarcovar * z1[];	// this is a shorthand for tri-matrices multiplication. Actual code should extend the calculation of matrix multiplication
	
	// repeat for variance2;
	
	covariance = z1[] * annualVarcovar * z2[];

	return = discreteReturn(price);
	risk = stdDev(price);

	for (i = 0 ; i < NUMBER_OF_OBSERVATIONS ; i++)
	{
		if (maxReturn < return[i])	maxReturn = return[i];
		if (maxRisk < risk[i])	maxRisk = risk[i];
		// the maximum return and standard deviation here are not exactly value due to limitation of the method
	}

	do
	{
		w2 = 1 - w1;	// rebalance the two asset portfolio
		EfficientFrontier.return[i] = w1 * expectedReturn1;	// for demonstration only, a mutator should be used
		EfficientFrontier.risk[i] = (w1^2 * variance1 + w2^2 * variance2 + 2 * w1 * w2 * covariance)^(1/2);	// for demonstration only, a mutator should be used
		w1 += INCREMENT;
		i++;
	}
	while(EfficientFrontier.return[i] <= maxReturn);	// for demonstration only, an accessor should be used
}

/* 
 * Global Minimum Variance Portfolio
 */

	gmvpWeight1 = (variance2 - covariance) / (variance1 + variance2 + 2 * 

covariance);	// Bodie Kane Marcus Investments 8e page 204
	gmvpWeight2 = 1 - gmvpWeight1;
	EfficientFrontier.gmvpReturn = gmvpWeight1 * expectedReturn1 + 

gmvpWeight2 * expectedReturn2;
	EfficientFrontier.gmvpRisk = (gmvpWeight1^2 * variance1 + gmvpWeight2^2 * 

variance2 + 2 * gmvpWeight1 * gmvpWeight2 * covariance)^(1/2);

	tangentWeight1=(expectedExcessReturn1*variance2-

expectedExcessReturn1*covariance)/

(expectedExcessReturn1*variance2+expectedExcessReturn2*variance1-

(expectedExcessReturn1+expectedExcessReturn2)*covariance);
	// Bodie Kane Marcus Investments 8e page 207
	tangentWeight2 = 1 - tangentWeight1;
	EfficientFrontier.gmvpReturn = tangentWeight1 * expectedReturn1 + 

tangentWeight2 * expectedReturn2;
	EfficientFrontier.gmvpRisk = (tangentWeight1^2 * variance1 + 

tangentWeight2^2 * variance2 + 2 * tangentWeight1 * tangentWeight2 * covariance)^

(1/2);

	return EfficientFrontier;

UNSW Coat of Arms

By , August 7, 2012 7:12 pm

Universitas Nova Cambria Australis

The lion and the four stars of the Southern Cross on the St George’s Cross have reference to the State of New South Wales which established the University;

The open book with "Scientia" (knowledge) across its pages is a reminder of its purpose.

The placement of "Scientia" on the book was inspired by its appearance on the arms of the Imperial College of Science, Technology and Medicine, formed in 1907.

Beneath the shield is the motto "Manu et Mente" (with hand and mind), which was the motto of the Sydney Technical College, from which the University developed.

Nivi.vn officially launches

By , August 7, 2012 12:14 pm

5 months after the leak, Nivi.vn officially launched.

The character limit is 250, understandably because of length of Vietnamese language. Case study: LinkHay blast limits 250.

The site provides verification badge for using real name and real profile picture. Users can choose to remain anonymous, however.

Follow me on Nivi: @taitran

Chỉ số VN30

By , July 27, 2012 11:13 am

Stock Return Forecast – Theory and Empirical Evidence

By , July 20, 2012 8:58 pm

For the entrepreneur: what type of fund you want to work with

By , July 5, 2012 8:48 am

Stage Type(s) of investor relevant to you What you should ideally have had General goal
Seed Angel investors
  1. Business plan (at least with business model, product development plan, marketing & sales plan, pricing structure, KPI forecast, risk management plan, industry analysis, key member details of skills)
  2. Co-founding team
  3. Incorporated
To develop products
Early Venture capitalists Working products
  • To market the products
  • To develop business
  • To scale the business
Growth Private equity funds Profit To become (a) market leader
Pre-IPO Mutual funds IPO roadmap To raise fund from the capital market for sustaining growth
Post-IPO Mutual funds, hedge funds, ETFs … More projects for growth To sustain growth
Going private LBO funds LBO plan To grow in private
Turnover Turnover funds
  • Turnover plan
  • Restructuring plan
To turnover the business

Outline of investment thesis for VCCorp

By , June 28, 2012 5:20 pm

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