Industry and Corporate Risk

As financial market's behavior changes all the time in order to response to that effectively, the sufficient analytical methods should be adjusted as well. The right proportion between risk and reward should be determined by consistent quantitative and qualitative methods. This book is the outcome of scientific and professional research, and its conclusions provide a solution on how to create an equity portfolio with the potential to beat the benchmark. It comprises the quantitative and qualitative analysis tools connected with the value-investing philosophy and risk assessment. In the book there are presented and tested three factors as investments selection methodology. These are industry factors measured by capital spending, profitability, risk and corporate culture captured by Cammeron-Quinn model. The systemic risk, the third factor, was also calibrated. The reader will find a scientific background of industry and corporate risk as well as a practical application of the CAPM model in the case study. The book's guidance will be enable the reader to assess the risk of securities and equity portfolios and compare it to the benchmark. The ultimate outcome of research, equity portfolio with the potential to beat market benchmark, was created from each of smaller parts of book, what constitutes conclusion that the whole presented methodology is consistent, defined and reliable. The author has professional experience in investing, banking, insurance, financial information services. He uses successfully most important principles of value investing. In his academic endeavors he studied philosophy of value investing and he analyzed Berkshire Hathaway's equity portfolio according to the philosophy presented in the book. List of Contents: 1. INTRODUCTION. 2. INDUSTRY FACTORS IN LITERATURE. 3. CORPORATE CULTURE CONCEPT IN LITERATURE. 4. VALUE INVESTING CONCEPT. 5. SYSTEMIC RISK BACKGROUND. 6. CASE STUDY: ANALYSIS OF PUBLIC STOCK COMPANIES ACCORDING TO INDUSTRY AND ORGANIZATIONAL CULTURE. 7. ORGANIZATIONAL CULTURE AS IMPORTANT SOURCE OF COMPETITIVE ADVANTAGES AND RISK FACTOR. 8. EQUITY REFERENCE PORTFOLIO SELECTION. 9. ANALYSIS OF EFFICIENCY OF EQUITY REFERENCE PORTFOLIO. 10. SUMMARY.