14th April 2020

Why Making Good Decisions is Hard

It is worth recapping why the making of good decisions is hard. In the following, I have brought together ideas from various sources and documents and […]
2nd December 2019

What Are Real Options and Why are They Hard to Value?

The term “Real Option” refers to an additional decision possibility that is created in any real-life situation if one extends the scope of permitted decision alternatives. […]
12th February 2019

The Role of Risk Modelling and Monte Carlo Simulation in Cash Flow Valuation

Since 1989, I have been using risk modelling combined with Monte Carlo simulation to improve the robustness, transparency and accuracy of cash flow valuation models. This […]
9th February 2019

The Meaning and Uses of Monte Carlo Simulation

Monte Carlo Simulation is simply the calculation of a model many times using an automated process that randomly samples the possible values for the model’s inputs. […]
9th February 2019

The FVSCHEDULE Function in Excel

As part of our occasional series on lesser-known Excel functions, this post highlights a key use of the FVSCHEDULE function in financial modelling. The FVSCHEDULE function […]
14th November 2018

The Role of Risk Assessment in Decision Quality

I had the pleasure of attending The Decision Quality Conference 2018 in London last week. This provided a good reminder of some of the close linkages […]
13th November 2018

Are Risk Register Heat Maps a Waste of Time?

Some commentators on risk assessment consider that “heat maps” are a waste of time. This posting discusses some of their advantages and disadvantages. A much more […]
24th October 2018

Modelling Dependency in Risk Models: Some Basics

A question often asked is the best way to deal with modelling dependencies in risk models. The topic is in fact incredibly rich; in this post, […]
29th November 2017

The Effects of Appraised Valuations on Volatility and Capital Allocations to low Liquidity Assets

Financial Reporting requirements often demand that estimates of value are made for illiquid assets or instruments (e.g. private equity, property, some types of bonds, and other […]