QRA

QRA - Quantified Risk Appetite

QRA of most corporations is 10-25% of Market Cap - important to note that QRA is a parameter in calculating risk adjusted value - not the most amount of money a company is willing to risk.  spreadsheet: http://www.sdg.com/ebriefings/on-demand/risk-tool
(Source: https://www.youtube.com/watch?v=orAyEtsfb3k&feature=youtu.be)

QRA is 10% of of market cap and small risks are 10% of QRA - e.g. 1% of market cap.  In this case, any decision that is less than that, then Expected Value is a very close equivalent to risk adjusted value.

All divisions of a company should use the same QRA to prevent value destroying opportunities - big bet decisions.  This pooling of risk gives large corporations an advantage over smaller corporations - giving up this advantage allows smaller companies to have an advantage if they are using appropriate risk.

WACC Definition

A calculation of a firm's cost of capital in which each category of capital is proportionately weighted. All capital sources - common stock, preferred stock, bonds and any other long-term debt - are included in a WACC calculation. All else equal, the WACC of a firm increases as the beta and rate of return on equity increases, as an increase in WACC notes a decrease in valuation and a higher risk.

The WACC equation is the cost of each capital component multiplied by its proportional weight and then summing:




Where:
Re = cost of equity
Rd = cost of debt
E = market value of the firm's equity
D = market value of the firm's debt
V = E + D
E/V = percentage of financing that is equity
D/V = percentage of financing that is debt
Tc = corporate tax rate

Businesses often discount cash flows at WACC to determine the Net Present Value (NPV) of a project, using the formula:

NPV = Present Value (PV) of the Cash Flows discounted at WACC.

(source: http://www.investopedia.com/terms/w/wacc.asp)

Definition of 'Cost Of Equity'

In financial theory, the return that stockholders require for a company. The traditional formula for cost of equity (COE) is the dividend capitalization model:



A firm's cost of equity represents the compensation that the market demands in exchange for owning the asset and bearing the risk of ownership.

Investopedia explains 'Cost Of Equity'

Let's look at a very simple example: let's say you require a rate of return of 10% on an investment in TSJ Sports. The stock is currently trading at $10 and will pay a dividend of $0.30. Through a combination of dividends and share appreciation you require a $1.00 return on your $10.00 investment. Therefore the stock will have to appreciate by $0.70, which, combined with the $0.30 from dividends, gives you your 10% cost of equity.

The capital asset pricing model (CAPM) is another method used to determine cost of equity.

GRPI

GRPI Pyramid

Robin, Plovnick, and Fry, Task-Oriented Project Development

Source: http://www.create-learning.com/docs/GRPI/GRPI-TeamDevelopment.pdf

What Is GRPI?

GRPI is used to ensure practitioners gauge the factors critical to team development in a structured way – and act on these factors throughout the project. Teams and organizations can be viewed through GRPI based on four fundamental dimensions:

• Goals: Are the mission and goals of the team clear and accepted by all members? Are they in tune with the team’s environment?
• Roles and responsibilities: Are the roles and responsibilities clearly described and understood? Do the defined roles fully support the team goals?
• Process and procedures: Are there processes and procedures operating in the group (such as problem-solving methods, communication procedures, decision-making processes, etc.) that are 1) understood and acceptable and 2) supportive to the group’s goals and roles?
• Interpersonal relationships: Are the relationships among team members healthy and supportive of good team work? Is there an appropriate level of trust, openness and acceptance in the group? The I of GRPI is a function of the G, R and P. In order to achieve the I, there are two important items to keep in mind: 1) effective communication and 2) conflict avoidance and resolution.

Source: http://www.isixsigma.com/implementation/teams/grabbing-hold-of-the-grpi-model/


The GRPI model was first introduced by Richard Beckhard (1972) and highlights the different
aspects of team cooperation by identify goals, clarifying roles, responsibilities and processes and
the interpersonal relationships of team members.
Source: http://www.systemic-excellence-group.com/sites/default/files/raue_tang_weiland_wenzlik_2013_the_grpi_model_an_approach_for_team_development.pdf

During his work as a organisational development and transformation consultant, Noel Tichy
analysed team conflicts based on the GRPI framework, underlining the cascading character (cp.
Pritchett, Tichy, & Cohen, 1998; Tichy, 2002). He observed a ratio of 80:20 per cent of conflicts
accumulating at each level:

• 80% of conflicts in teams are attributed to unclear goals.
• From the remaining 20%, 80% are assigned to unclear roles.
• From the remainder there is again 80% to be found in the field of unclear processes.
• Finally, only 1% of the conflicts in teams can be attributed to interpersonal relationships.
Ambiguity at one level has an impact on the ensuing levels and problems at a lower level are often
symptoms of conflicts at a higher level.

• If goals are not clear, uncertainties in the individual roles will arise.
• If roles are unclear, this will result in cumulative conflict within the processes.
• If processes are unclear, accumulated conflicts at higher levels will appear at people level.
Therefore, it is crucial to establish absolute clarity at each level and to put in place a foundation of
shared commitment by installing ownership of and commitment to those goals across the team
and by identifying and addressing any issues which restrict the team from reaching their goals.
Source: http://www.systemic-excellence-group.com/sites/default/files/raue_tang_weiland_wenzlik_2013_the_grpi_model_an_approach_for_team_development.pdf

Futsal, basketball and ... padded parkour? Sounds like a strange three-sport athlete, and a perfect model for kids.

From: http://www.nytimes.com/2014/06/11/opinion/sports-should-be-childs-play.html

We should urge kids to avoid hyperspecialization and instead sample a variety of sports through at least age 12.

Nearly a third of youth athletes in a three-year longitudinal study led by Neeru Jayanthi, director of primary care sports medicine at Loyola University in Chicago, were highly specialized — they had quit multiple sports in order to focus on one for more than eight months a year — and another third weren’t far behind. Even controlling for age and the total number of weekly hours in sports, kids in the study who were highly specialized had a 36 percent increased risk of suffering a serious overuse injury. Dr. Jayanthi saw kids with stress fractures in their backs, arms or legs; damage to elbow ligaments; and cracks in the cartilage in their joints.

In the Loyola study, sport diversification had a protective effect. But in case health risks alone aren’t reason enough for parents to ignore the siren call of specialization, diversification also provides performance benefits.

Kids who play multiple “attacking” sports, like basketball or field hockey, transfer learned motor and anticipatory skills — the unconscious ability to read bodies and game situations — to other sports. They take less time to master the sport they ultimately choose.

A Swedish study of sub-elite and elite tennis players — including five who ranked among the top 15 in the world — found that those who topped out at as sub-elites dropped all other sports by age 11. Eventual elites developed in a “harmonious club environment without greater demands for success,” and played multiple sports until age 14.

USA Hockey (which has barred checking in youth games) recently invited adults to play on a 310-by-130-foot ice rink to show them what it’s like for an 8-year-old to play on a regulation rink. The grown-ups’ assessments: “too much time between the action”; “it’s hard to communicate because everyone is spread out so far”; “you end up spending a lot of time in open space.”

Google Tips

Google Keep
ALAN HENRY on LIFEHACKER explains the difference between Google Keep (screwdriver) and Evernote (cordless drill)

Kristin Burnham posted 10 Great Google Apps Tips and I found a few to be useful:

Mute email conversations
"Mute conversations" is a feature that prevents email threads from reappearing in your inbox.


Add events to your calendar from Gmail
If you use Gmail to make plans or schedule meetings, you can quickly add them to your Google Calendar.

Enable text (SMS) appointment reminders
Plug in your details -- such as phone number and wireless carrier -- and Google will text you a reminder before your meeting.

Difference between man and machine?

I think, the only difference between man and machine is that machine is quiet when well-lubricated. - Eugene Goostman

Read more: http://www.nydailynews.com/opinion/humanity-good-run-article-1.1823072#ixzz34FDnMrDU

http://www.princetonai.com/bot/