Hult International Business College
Evan Soltas lately turned heads with a claim that the finance sector requires home half of all business income in the United States. It turns out that this is an overestimate in reality, the quantity is somewhere about 30%. But the fundamental story is right. Finance, which accounts for only about 8% of GDP, reaps about a third of all profits.
Arguably a history book not an investment book. Could not inform you something new but such an elegantly coherent view of the globe. It pains me to say it due to the fact he is practically as smug as Taleb (and better searching) but any of Niall Ferguson’s books are worth reading. Except perhaps the a single about the Rothschild’s. Unless you have a compulsive fascination with the history of nineteenth century banking its at least 500 pages too lengthy.
This lens is a wonderful eye-opener to assist individuals …
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Although laying the foundation of Atharva Finance we had been guided by a single minded client centric strategy. Our practice model is built about the very requirements of our consumers. At Atharva Finance we think that like an Architect our part is to assist our client to design and produce a economic residence of their future.
In a preceding post I discussed why the expense of debt has small influence on investments. What about the expense of equity? Firms typically use (much) more equity than debt to finance their investments. So the expense of equity should matter far more. In a current study , Murray Frank and Tao Shen investigate how the cost of equity and the weighted average expense of capital (WACC) influence investments of US firms. Remarkably, they uncover that the expense of equity and the WACC are positively connected to corporate investments. Firms with a larger estimated expense of equity and WACC tend to invest significantly more. That is a quite strange outcome. We would anticipate firms with a high cost of capital to invest significantly less, not a lot more.