John Kay > Quotes

“The great muckraker Upton Sinclair had expressed a deep insight into the relationship between the world of ideas and the world of practical men: ‘It is difficult to get a man to understand something, when his salary depends on his not understanding it.’34”
― John Kay, Other People's Money: The Real Business of Finance

“Investors look at economic fundamentals; traders look at each other; ‘quants’ look at the data. Dealing on the basis of historic price series was once described as technical analysis, or chartism (and there are chartists still). These savants identify visual patterns in charts of price data, often favouring them with arresting names such as ‘head and shoulders’ or ‘double bottoms’. This is pseudo-scientific bunk, the financial equivalent of astrology. But more sophisticated quantitative methods have since proved profitable for some since the 1970s’ creation of derivative markets and the related mathematics. Profitable”
― John Kay, Other People's Money: The Real Business of Finance

“For all that has recently been said about ‘the wisdom of crowds’, the authors prefer to fly with airlines which rely on the services of skilled and experienced pilots, rather than those who entrust the controls to the average opinion of the passengers.”
― John Kay, Radical Uncertainty: Decision-Making Beyond the Numbers

“No one will be buried with the epitaph ‘He maximised shareholder value”
― John Kay, Obliquity: Why Our Goals Are Best Achieved Indirectly

“The disparities of income and wealth in the world today are an affront to any reflective person.”
― John Kay, The Truth About Markets: Why Some Nations are Rich But Most Remain Poor

“Apple raised $17 billion in a bond offering in 2013. Not to invest in new products or business lines, but to pay a dividend to stockholders. The company is awash with cash, but much of that money is overseas, and there would be a tax charge if it were repatriated to the USA. For many other companies, the tax-favoured status of debt relative to equity encourages financial engineering. Most large multinational companies have corporate and financial structures of mind-blowing complexity. The mechanics of these arrangements, which are mainly directed at tax avoidance or regulatory arbitrage, are understood by only a handful of specialists. Much of the securities issuance undertaken by Goldman Sachs was not ‘helping companies to grow’ but represented financial engineering of the kind undertaken at Apple. What”
― John Kay, Other People's Money: The Real Business of Finance

“I am not saying that personal development is more important than winning; on the contrary, I am saying that enjoying the journey of self-discovery, by removing some of the pressure and angst associated with winning at all costs, is one way of helping you to win more often.”
― John Kay, Obliquity: Why Our Goals Are Best Achieved Indirectly

“Through experiences we normally associate with unhappiness they achieve greater happiness than if they had sought happiness directly.”
― John Kay, Obliquity: Why Our Goals Are Best Achieved Indirectly

“Most decisions are wrong. Most experiments fail. It is tempting to believe that if we entrusted the future of our companies, our industries, our countries, to the right people, they would lead us unerringly to the promised land. Such hopes are always disappointed. Most of Thomas Edison’s inventions did not work, Ford, Morris and Mao ended their careers as sad, even risible figures. Bill Gates missed the significance of the Internet, Mrs Thatcher introduced the poll tax, and Napoleon died in exile on St Helena. Even extraordinarily talented people make big mistakes.”
― John Kay, The Truth About Markets: Why Some Nations are Rich But Most Remain Poor

“A policy of ‘naming and shaming’ is ineffective if everyone has been named and shamed.”
― John Kay, Other People's Money: The Real Business of Finance

“The claim that the only constraints on our success are the limits of our imagination, although generally false, has lifted hearts for millennia. Grand visions take precedence over prosaic numbers.”
― John Kay, The Hare and Tortoise

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.’35”
― John Kay, Other People's Money: Masters of the Universe or Servants of the People?

“An asset is worth what someone is willing to pay for it; and the value of an asset is the cash it will generate over its life.”
― John Kay, The Long and the Short of It - Finance and Investment for Normally Intelligent People Who Are Not in

“We all chase the dream, but when taken to excess by individuals or in crowds, the chasing of dreams becomes madness. And chasing the dream with other people’s money is at best irresponsible and often fraudulent.”
― John Kay, Other People's Money: The Real Business of Finance

“Stock markets are not a way of putting money into companies, but a means of taking it out.”
― John Kay

“The Thatcherite emphasis on hard work and self-reliance sat alongside a belief that compassion should be a private virtue rather than a social practice. These are attitudes very different from the greedy individualism and sense of personal entitlement characteristic of much of the finance sector today.”
― John Kay, Other People's Money: The Real Business of Finance

“Art,” said Picasso, “is a lie that makes us realize the truth.”
― John Kay, Obliquity: Why Our Goals Are Best Achieved Indirectly

“… the problem, and our understanding of it, changes as we tackle it.”
― John Kay, Obliquity: Why Our Goals Are Best Achieved Indirectly

“There is a role for carrots and sticks, but to rely on carrots and sticks alone is effective only when we employ donkeys and we are sure exactly what we want the donkeys to do.”
― John Kay, Obliquity: Why Our Goals Are Best Achieved Indirectly

“But it is a common mistake to emphasise what you can measure at the expense of more important things that you can’t. It is generally better to be approximately right than precisely wrong.”
― John Kay, The Long and the Short of It (International edition): A guide to finance and investment for normally intelligent people who aren’t in the industry

“Many aspects of the modern financial system are designed to give an impression of overwhelming urgency: the endless ‘news’ feeds, the constantly changing screens of traders, the office lights blazing late into the night, the young analysts who find themselves required to work thirty hours at a stretch. But very little that happens in the finance sector has genuine need for this constant appearance of excitement and activity. Only its most boring part—the payments system—is an essential utility on whose continuous functioning the modern economy depends. No terrible consequence would follow if the stock market closed for a week (as it did in the wake of 9/11)—or longer, or if a merger were delayed or large investment project postponed for a few weeks, or if an initial public offering happened next month rather than this. The millisecond improvement in data transmission between New York and Chicago has no significance whatever outside the absurd world of computers trading with each other. The tight coupling is simply unnecessary: the perpetual flow of ‘information’ part of a game that traders play which has no wider relevance, the excessive hours worked by many employees a tournament in which individuals compete to display their alpha qualities in return for large prizes. The traditional bank manager’s culture of long lunches and afternoons on the golf course may have yielded more useful information about business than the Bloomberg terminal. Lehman”
― John Kay, Other People's Money: The Real Business of Finance

“He described the securities—called Abacus—to a girlfriend: I had some input into the creation of this product (which by the way is a product of pure intellectual masturbation, the type of thing which you invent telling yourself ‘Well, what if we created a “thing,” which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price?’).15”
― John Kay, Other People's Money: The Real Business of Finance

“It is not the purpose of this book to propose remedies for rent-seeking: the implications of my analysis for business and public policy, both of which should promote the rents that arise from innovative differentiation and eliminate the ones that are the result of the abuse of political institutions, will be the task of a successor volume.”
― John Kay, The Corporation in the 21st Century: Why (almost) everything we are told about business is wrong

“We don’t consider any man successful until he has died well.”
― John Kay, Obliquity: Why Our Goals Are Best Achieved Indirectly

“Too big to fail’ takes responsibility for the supervision of credit risks away from market participants and places it more or less exclusively in the hands of regulators: a duty that in this instance (and many others) they were not capable of discharging.”
― John Kay, Other People's Money: The Real Business of Finance

“What was true was what was believed, and what was believed was true. And when the bubbles burst, what had once been believed and was therefore true was no longer believed and therefore no longer true. The”
― John Kay, The Long and the Short of It: A guide to finance and investment

“In an illuminating comment on the financialisation of business, Jack Welch — now long retired from General Electric — would in 2009 proclaim shareholder value 'the dumbest idea in the world.”
― John Kay, Other People's Money: The Real Business of Finance

“organisers of weight-guessing competitions and advisers helping people to refine their guesses.”
― John Kay, Other People's Money: The Real Business of Finance

“People often say that shareholders ‘own’ the company. They don’t, as you will find out if you turn up at Apple’s spectacular new headquarters campus at Cupertino or Berkshire’s small office suite in Omaha, Nebraska, to assert your ‘ownership’. What shareholders own is their shares, and ownership of shares confers a variety of rights. The value of a share is the value of these rights.”
― John Kay, The Long and the Short of It (International edition): A guide to finance and investment for normally intelligent people who aren’t in the industry

“The evangelists for bitcoin, the much-hyped digital currency that is a strange mixture of the visionary and the fraudulent—are, in a sense, not imaginative enough. They are simply trying to reproduce in the electronic world a commodity—currency—that has long existed in the material world. The larger question is whether currency as we have known it is any longer necessary at all. I once joked with beginning students that money existed because when a pipe burst it took too long to find a plumber in need of economics lectures—but today it is possible to locate that plumber.”
― John Kay