Going Venezuela

Blog

ALEXANDER M. INEICHEN  

25 November 2016

Will some economies ever learn?

“Chavez is the best president Columbia has ever had” ~ Columbian home owner
Albert Einstein is said to have defined insanity as doing the same thing over and over again and expecting different results. In Wriston’s Law of Capital and Sleeper pins, reports I wrote in 2012 and 2014, I have defined the term ‘going Venezuela’ as “doing the wrong thing repeatedly and with great conviction.”¹
The two ideas are related. Both imply the absence of learning. The term is consistent with the Iron Law of Failure and Wriston’s Law of Capital, and is widely applicable to economies and societies that fail.
Two prominent textbook examples of long-term economic failure are Egypt and Argentina. At the beginning of the 19th century, both Egypt and Argentina were in an excellent position to excel. They were both larger than Germany at the time and multiples larger than South Korea, for example.
Today, the GDP per capita of both Egypt and Argentina is nearly four times lower than that of Germany and more than two times lower than that of South Korea. I believe neither has learned from their mistakes.
The fascination with Venezuela’s failure is not its magnitude, but the speed of the decay and the romanticised Che Guevara-manner by which the economic self-mutilation has been inflicted upon the oil-rich Dutch disease-suffering Latin republic.
The problem today is that the West is in a negative feedback loop with large parts of the industrialised world “going Venezuela” too.
 
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IR&M joins Airex Markets platform

Press release

Airex, Inc. Adds Four New Partners to the AIREX™ Market

Entext Economics and Strategy, Ineichen Research and Management AG, Plunkett Research Ltd., and ValueEngine newest sellers to be added to cloud-based marketplace for financially actionable apps, information, and reports (Financial AIR™)

NEW YORK – June 4, 2015 – Airex, Inc. is proud to announce the addition of four new suppliers in its AIREX Market: Entext Economics and Strategy (Entext Economics), Ineichen Research and Management AG (IR&M), Plunkett Research Ltd. (Plunkett), and ValueEngine.com (VE).

The new suppliers add nearly 50,000 new products to nearly a million existing pieces of Financial AIR already in the marketplace. The AIREX Market provides single sign-on access to hundreds of thousands of individually purchasable products, bringing together sellers that include FactSet Research Systems, Morningstar, Mercer, and Nasdaq, with many more global and boutique providers coming on line every week.

Full press release

Nowcasting

Article by Benedicte Gravrand, Opalesque Geneva, 13 February 2015

Nowcasting is to forecasting what astronomy is to astrology

 

Alexander Ineichen, founder of Ineichen Research and Management, an independent research firm based near Zurich, recently produced an interesting risk management research piece on forecasting and nowcasting (called Nowcasting and Financial Wizardry). In this piece, he displays, with examples and statistics, the imprecision of forecasting and the logic of nowcasting for decision making in finance.

Momentum Monitor

Press release

IR&M introduces momentum monitor

Oberaegeri (Switzerland) – 13 May 2013: Ineichen Research & Management AG (“IR&M”) announced today the launch of a new service, the IR&M momentum monitor, a weekly momentum screening as part of its risk management research effort.

The momentum monitor was designed to help investors with risk management, asset allocation, and position sizing. Alexander Ineichen, founder of IR&M said: “Tail events do not always happen out of the blue. Gold collapsed a couple of weeks ago. However, momentum has been very decisively negative many weeks prior to the 8 standard deviation event. Negative momentum makes hedging more important and suggests position sizing should be more conservative.”

Simple Alternatives partners with IR&M

Press release

Ridgefield, CT – 27 February 2013: Simple Alternatives, LLC, along with Ineichen Research and Management ("IR&M") announced today the availability of a new research paper authored by Alexander Ineichen, CFA, CAIA, FRM, titled, “Hedge Fund Performance.”

In this research, Alexander Ineichen examines recent hedge fund performance and discusses concepts related to absolute returns investing and active risk management.

AIMA's Roadmap to Hedge Funds

Report

London – 20 November 2012: The Alternative Investment Management Association (AIMA), the global hedge fund association, and Deutsche Bank today announced the launch of a new edition of the educational guide for institutional investors in hedge funds - the Roadmap to Hedge Funds.