Ann: REH - ASX Announcement Equity Raise, page-42

As it happens, I happen to be an engineer by qualification.

My engineering training taught me that a solution to a problem is only as strong as the weakest assumption going into the formulation of that solution, and that the best way to manage risk is at source.

This applies perfectly in investments; risk of capital impairment is best addressed at the company-specific level., i.e. following assessment of:

- Quality and nature of business model (customer concentration, brand resonance, pricing power, scale-ability,obsolescence threat, critical supplier dependency,

- Quality of financial accounts (revenue recognition, expense accounting, depreciation policy, provisioning, capital intensity cash generation, degree of indebtedness, contingent liabilities.),

- Board and Management track record and alignment,

- And of course, Valuation.


You get those right and you create wealth with diminished risks... (without having to involve oneself in the arcane game of trying to predict macroeconomic trends, an undertaking which is full weak assumptions that act as limiting parameters).