The Benefits of Using Economically Meaningful Factors in Financial Data Science
Factor selection is among our most important considerations when building financial models. So, as machine learning (ML) and data science become ever more integrated into finance, which factors should we…
Rethinking Corporate FX Hedging: Seeing the Forest through the Trees
“It often happens that a player carries out a deep and complicated calculation, but fails to spot something elementary right at the first move.” — Alexander Kotov, Chess Grandmaster Introduction…
Book Review: The Economics of the Stock Market
The Economics of the Stock Market. 2022. Andrew Smithers. Oxford University Press. Judging by the behavior of the stock market, we are living in challenging times for mainstream finance. Under…
Project Finance: Beware Interest Rate Miscalculations
Interest rates are like the weather. We can prepare for typical fluctuations, but sudden changes can still catch us by surprise. After the global financial crisis (GFC), for example, we…
Steve Blank Profound Beliefs
This post previously appeared in EIX. In the early stages of a startup your hypotheses about all the parts of your business model are your profound beliefs. Think of profound…
Why relaxation is as important as sleep – and six ways to do it better
AS YOUR eyes scan these words and absorb this sentence, do you feel you are resting? There is good reason to think you might. In 2016, more than 18,000 people…
Do Better ESG Ratings Boost Bond Holders?
Environmental, social, and governance (ESG) ratings should reflect the risks that such factors pose to a company’s financial performance and how well equipped that company is to manage those risks.…
“Build, Partner and Buy”: AI and the New M&A Model
Amid the current artificial intelligence (AI) hype cycle, companies are jockeying for an edge in this fast-developing sector. So far this year, software M&A is staging a comeback. After bottoming…
Steve Blank Before there was Oppenheimer there was Vannevar Bush
I just saw the movie Oppenheimer. A wonderful movie on multiple levels. But the Atomic Bomb story that starts at Los Alamos with Oppenheimer and General Grove misses the fact…
Myron Scholes on Black–Scholes, Decarbonization, AI, and Parenting
Through his examinations of how uncertainty influences asset prices, Nobel laureate Myron Scholes has helped revolutionize our understanding of the financial markets. His development of the Black–Scholes options pricing model…
