200602-01

Investment decisions in both the financial and in the real world boil down to answering three key questions

200602-02

That discount rate is chosen to reflect the return an investor demands from the traded twin security that has the same risk and payoff profile as the project

200602-03

Only by investing in research and development work will management find out whether a new technology is feasible and whether the new car prototype can be built

200602-04

Open symbols represent the value of investing now without the abandonment option

200602-05

By investing in the pilot project, management initiates an NPV negative project worth

200602-06

It displays the change of option value under increasing market variability as a percentage of base-line value in the absence of market variability for the investment opportunity

200602-07

The critical threshold to invest approaches the level an NPV analysis would yield

200602-08

They pioneered the pricing of the option to defer an investment or to expand under perfect competition

200602-09

Calculate the option to invest in two years under competitive conditions

200602-10

Management may want to consider investing into obtaining competitive intelligence

200602-11

How does this impact on the value of the investment opportunity for firm

200602-12

Those investments are unlikely to create positive payoffs on their own but will create value for the firm by preserving an existing market stake

200602-13

What is the value of learning for the R&D investment option?

200602-14

How sensitive is the value of the investment option to predictions of the best and the worst market payoff scenario to occur

200602-15

The value of the call on the investment opportunity to accelerate the program is deep out of the money

200602-16

Real Option Analysis. A Support Framework for Corporate Strategy

200602-17

The value of investing in intangible assets such as business processes and procedures

200602-18

Positioning also entails investments in a proof of concept for any given technology or product

200602-19

Corporate project portfolio management takes place at both the operational as well as the strategic level

200602-20

They borrowed cash against the insurance policy and invested it at a 4% higher rate

200602-21

The option value of this investment opportunity obviously looks different for both players

200602-22

The organization may simply leave money on the table by failing to communicate acquired options and options in place to investors

200602-23

A hedging strategy elevates the critical cost to invest that moves the option out of the money

200602-24

Further, investors also do not put much short-term value on the announcement of technology innovations

200602-25

Evolutionary real options were designed for staged investments in uncertain markets with high technical uncertainty

200602-26

The cost of delay is for the owner of a monopoly optionthe revenue for gone by deferring the investment

200602-27

Failing to do so can easily exaggerate the value of these investment options

200602-28

Livermore was not a fundamentalist in his trading approachhe was a true technical trader

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Previous Issues

200601

In ten years, real options will replace NPV as the central paradigm for investment decisions

200512

Successful focus investors need a certain kind of temperament

200511

Try to design an investment strategy to achieve your objectives while not exceeding your tolerance for risk

200510

Bear Markets and Bad Investor Behavior

200509

The Best Days of the Week to Take This Trade

200508

All traders have felt that they were victims of being stopped out for no good reason

200507

Each trader has to pick the time horizon that best fits his style of trading