In markets where index funds are a feasible investment channel, investors can undertake strategies to hedge their position in such funds.
1. Investor, depending on their bargain power, may require installment of liquidity reserve. An increasingly popular calculation of a reserve is with Value at Risk (VaR).
Reserve = VaR * multiplier
The more volatile the market is expected to be, the higher the multiplier is used.
Read more of VaR on JP Morgan and Benninga & Wiener 1998 1.
2. The position can be further hedged by entering a credit default swap.
Given these instruments, further concern of index fund service provider liquidity risk (default event on the commitment to investors when index rockets) might be attributed to other factors beyond the scope of this technical argument.
1 Benninga S. and Wiener Z., 1998, ‘Value-at-Risk (VaR)’, Mathematica in Education and Research, vol. 7 no. 4, 1998
In 2004, I was doing a research project with RMIT University on Semantic Web. The goal was for the query to ‘recognize’ who a person is and how s/he is connected to the world. One issue arose: no single source provides sufficient data of the level of connectedness we expected.
6 years later, the whole thing world has changed. One entity has accumulated more data than most others: Facebook.
We started talking about Web 3.0 backed by Semantic Web in 2005, and Social Graph in 2006. But until this point do we realize how the new web shall have to rely on a skeleton offered by a company and its alliance (Microsoft, Zynga).
I’ll think more of what new business models will emerge, the changing competitive landscape, disruptive innovation and most importantly, how do we capitalize on this.
Analysis of Woolworths Limited Australia
Leading Strategies and Opportunities in the competitive, technological and regulatory environment
Danfeng Chen, Stevan Nikolin, Tai Tran
2009
Introduction Excerpt
Woolworths is a vast and diverse company which has its origins in Australia. Its range of products includes supermarkets, electronics, retail, liquor, petrol, general merchandise among many others. Despite their already large presence in the Australian market, Woolworths believes that there is still potential for significant growth, whether this growth occurs within the existing industries in which it operates, or alternatively, in new ventures. This essay will analyse the company’s core competencies, its marketing strategies, operations and logistics management, and its competitive standing within the current socioeconomic environment. Following this analysis, an account of Woolworths’ strategic opportunities and risks will be presented.
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Photo courtesy:
Source: AFP PHOTO Torsten BLACKWOOD, AFP
Published: Tuesday, February 27, 2007 12:53 AEST
http://www.abc.net.au/news/photos/2007/02/27/1858228.htm
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