By: Alex Horenstein and Alejandro Saltiel
Business School
ITAM
Diversification is one of the better known concepts in managing financial asset portfolios. According to the popular saying, diversify is “not to place all the eggs in the same basket”. The basic idea is that if an asset in a portfolio loses value, the investor has others to attenuate the impact of the loss. In other words, to diversify allows us to minimize the exposure of our portfolio against specific assets risk. (The only diversifiable risks are the specific risks. Risks common to all assets, the also called systematic risk, are not diversifiable). For example, on Monday, January 31, 2011 Intel informed that a failure in one of its new microchips will make it lose up to 300 million dollars (700 million according to some analysts). (read more…)
Should Businesses Respect Consumers?
The success of companies’ strategies for finding, attracting and retaining clients and the ability to create a solid pillar of confidence in the market, which can lead to economic development, depends on an understanding of the basic concepts and principles of consumer protection.
Although the individual entrepreneur may have to pay a price to comply with consumer protection laws, in the aggregate, these laws generate social and economic benefits. The restrictions established in the Federal Consumer Protection Law (LFPC) coincide with the legally protected good pursued by other economic regulations, like those regarding the breakup of monopolies and unfair trade practices. The rights of the consumer should not be viewed as an impediment for the business, nor does complying with rules protecting these rights place the business at a disadvantage before the law.
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