Famously, Robert Zimmerman became Bob Dylan, David Jones became David Bowie, and Leonard Cohen became…Leonard Cohen. Similarly, in the early noughties the employee-owned international engineering consultancy Ove Arup & Partners became Arup. Just as artists decide to assume a stage name to enhance their popularity and success, some companies make the decision to modify this particular part of their public image for business reasons.
So, what’s in a name?
We should remember that, in company law, it is widely accepted that the corporation is a legal person, and that the veil of incorporation, enshrined in the limitation of liability, is lifted only in the most specific of circumstances. Critics of corporatism see the large, listed entities which figure significantly in our day to day lives as monoliths with massive lobbying power pursuing their own nefarious agendas. I prefer to think of the person embodying the fiction of the company as feeble, anxious and increasingly short lived. One only has to remember the near collapse of BP during the Gulf of Mexico tragedy, the inability of corporations to act with one clear voice on such an important issue as the form Brexit will take after the divorce, and the ever shorter average life span of corporations around the world to see that this is the case.
Nevertheless, Statoil is in my view a remarkable organisation. Still 51% owned by the Norwegian state, it would be easy to simply frame the company as a state owned entity (SOE). Moreover, within the classical categories applied to upstream oil and gas organisations, it might be seen as a national rather than an international…
Liquidity as the cornerstone of your investment portfolio
Ever since the crisis in 2008 we have seen that rapid swings in the markets can come when a lack of liquidity appears. The paradox with liquidity is that it disappears at times when you need it the most. So let’s elaborate on what it is to have liquidity in ones portfolio,What are liquid positions? How do we manage it, and what happens without it. Then we focus on how we manage or make liquid positions when setting up a P2P investment portfolio.
What are liquid investments
Cash is king also when it comes to liquidity so what can we consider as cash equivalents when it comes liquidity.
Cash equivalents instruments are typically defined by investments that can be converted into cash easily. Assets with short maturities of less than 90 days. Consider major tradeable stocks like apple or shell.
These can be easily converted into cash in case of an emergency, this is also the case with almost all government/ corporate bonds or treasuries
In general investments are considered liquid when they can be sold easily at a stable market price. Non-liquid assets cannot be quickly sold for cash, like property, direct loans, art etc.
How to manage portfolio liquidity
Lesson one is to keep your core liquidity in cash or high liquid assets. Also keep a part of the assets in prime quality so you can easily trade it at par price.
Why is this? Well when shit hits the fan and money is needed the liquidity paradox comes around the corner and you are lost in limbo because you can’t just buy or sell any asset at any time; the buyers need a seller, and the sellers need a buyer. Liquidity is prime.
Managing liquidity when setting up P2P portfolios
If you take above into consideration when setting up your first P2P portfolio make sure you spread your bets around short and long term debt…