Monthly Archives: May 2017

Investment Strategies: Evaluation of Prima in Stock Market

Опубликовано: May 21, 2017 в 16:08


Категории: Insights

Theoretically and as seen in the global stock market, is divided as large and small stock depending on the market value. The market value, which is the market capitalization and calculated by using the share numbers a company issued and multiplying by per share price. Milestone (2005) provided an example using Exxon Corp, whose shares outstanding is 6.37 billion. And using $60 for the price of a share, the company’s total market capitalization will be summed to $382.2 billion. The calculation of firm’s capitalization, helps to rank and determine their size, which could be small or large. However, one could also use two other ways in separating stocks that are expensive and those inexpensive. And this involves the use of market capitalization, although this is evaluated against the intrinsic value know as annual profits and net assets.” In determining the cost of stock, if it is cheap or expensive, about the intrinsic value. The writer used Exxon Corp’s, market capitalization mentioned above ($382 billion), to the profit per year, which is $27.7 billion.

One will derive the earnings or price to be multiple of 13.8, which could help determine if it’s large or small. Furthermore, multiple can be obtained by the comparison of market capitalization, with the book value otherwise known as net assets. And using the company’s data, this will be $102 billion, with a net assets ratio of 3.8. The calculation we saw, help to determine the nickname that is given to stock, which could be growth or the value. And when a stock is termed growth, or it is high priced, these are termed glamour or large stocks. This is because the investors have high expectations that the earnings will increase over a period of time, based the feel good otherwise known as behavioural finance (Bodie, Kane, and Marcus, 2014). Moreover, the measures described above poses implications for investors. And as a common belief that small company stocks come with a greater return when compared to large ones over an extended period (Jason, 2013). This is attributed to the fact that small institutions have more risk when compared with most major companies. Thus, financial planners request for compensation, by demanding for higher earnings, because of the added risk. And as seen over time that small organization, quickly fail and goes into bankruptcy as Moya (2015) explained. On the other hand, when small organization succeeds, the stock price easily double or triple over a short length of time. For example, evaluate the opening price of the Dubai Park and Resort, Bloomberg (2015) Index shows, the price as almost doubled, under a year of opening. Although, one should note that the Capital Assets Pricing Model (CAPM) and the volatility are always compensated with greater returns. And affirming that small stocks tend to outperform large ones that Lazard (2015) citing Banz (1981) study, questioned the CAPM. In the study assets, the return was explained, by the use of one variable and the systematic risk associated. In the report, the model variable does not take account of the company size, because it could be outperformed. However, an investor needs to bring other risk elements in determining and explaining equity returns.

For example, the return of stock are usually derived, when the economic situation of the world or a country is stable and underperform when economic condition is worsened (Lazard, 2015). Moreover, because small value tends to offer more advantage because it actively helps to diversify portfolio (Frontier, 2007). Since, it is proven that keeping one portfolio is not an effective investment strategy in our current global environment (Matt, 2014). The value premium for smaller stock prices about the book value of the company certainly outperformed those of large enterprises. Although, in Fisher (2014) comparison, the return on investment, from the year 1979 to the year 2014 to evaluate the value and growth of halves the market. The value stock provided the return on investment for investors, for a small and large cap. However, the writer mentioned the return on “small cap value and small cap growth” generated a triple return when evaluated against the Russell index.

One should not forget that the performance, of value stock underperforming and performing, is very dependent on the business cycle, which does not give a clear picture. Fama and French framework for assessing the risk of value premium become the preferable model because the introduced additional factors that affect assets return (Lazard, 2015; Noah, 2015). Noah (2015) mentioned, there is a possibility that the value premium is not caused by risk, however, methodical inefficiencies in the market. And because the relation of performance, of “value and growth stocks are connected to changes in the equity risk premium it makes no sense that the premium value anomaly discovered by researchers should be included in the cost of capital equity calculations” (Jason, 2001). The premium value, variance, are posed by other factors, which includes the systematic return and forecast favouritism in the market for growth and value of a stock. In the United Arab Emirates, the financial market is very young, and most of the investors are targeting the small value growth premia. This is because of the entrant level, is much lower when compared to large. Although, because of the significant operating capital, derived from oil revenue, the monocracy government invests into large value stock overseas and expect returns over an extended period (Reuters, 2014). One of the reasons, why one may say, these sets of individuals in buying large stock and avoid stock perceived as cheap, could be the lack of confidence in small companies’ stability. Although, the growth small cap stocks, as risen over the years, from the evaluation of the global indices as seen below.

Source: Lazard (2014).

However, it is advisable before tilting portfolio to small value direction, an investor should have the logical data and history on the performance of the organization.

Further Reading

Bodie, Z., Kane, A. & Marcus, A.J. (2014) Investments. 10th global ed. Maidenhead: McGrawHill Education.

Bloomberg (2015) Dubai Parks & Resorts PJSC + Watchlist DUBAIPAR:UH [Online] Available: [Accessed: November 14, 2015]

Frontier., (2007) The Benefits of Portfolio Diversification [Online] Available:[Accessed: November 14, 2015]

Fisher G. S., (2014) The Growth and Value Pendulum [Online] Available:

Jason Z., (2013) Value Stocks Are Hot—But Most Investors Will Burn Out [Online] Available:[Accessed: November 14, 2015]

Jason T., (2001) Disentangling value, growth, and the equity risk premium [Online] Available: [Accessed: November 14, 2015]

Lazard (2015) Small Caps, Large Opportunity [Online] Available:[Accessed: November 14, 2015]

Milestone (2005) Large vs. Small and Value vs. Growth [Online] Available: [Accessed: November 14, 2015]

Matt k., (2014) Buy and hold’ investors: You’re doing it wrong [Online] Available: [Accessed: November 14, 2015]

Noah S., (2015) Busting some myths about value premiums [Online] Available: [Accessed: November 14, 2015]

Reuters., (2014) Middle East funds see value in popular Saudi stock market [Online] Available: [Accessed: November 14, 2015]

The characteristics or qualifications of a good project reviewer

Опубликовано: May 9, 2017 в 16:11


Категории: Insights

In response to the questions to last week’s post, “what are the characteristics or qualifications should a good project reviewer have? How do you determine or identify ‘a good reviewer’? To answer the question raised, “how do you determine or identify ‘a good reviewer’?.” One must not see the completion of a project, as the end of project management processes of a project. This is because the organization or project manager, completed a project, may not see benefits from its outcome. Thus, the post-­project review needs to be put in place as identified by Zetwitz (2002), because it helps professionals to determine areas of advantage from a completed project. Sanjay (2002) offered few elements and characteristics of a good review. And stated, a good reviewer should be able to identify items that were done well in a project. More so, the reviewer should be able to identify issues that could be improved to an advantage, by evaluating the complete project.

Also, define the project task that is broken, which require a complete restructuring. For example, the project manager after evaluating the process used for managing a project, e.g. waterfall methodology may find that this approach is weak to administer a project of a particular profile, so the agile framework is employed or hybrid method. Besides, a good reviewer should be able to decide on action plans, i.e. to get stakeholder agreements and action plan, which could be employed to improve the process and fix the broken part of a project. And according to the characteristic above, a good reviewer will be said to be a ‘supper’ project manager (Krane, Olsson & Rolstadas, 2012). Otherwise, one could term a good reviewer as transformational because the individual is able to lead in such a way that all follower types identified by Kelly (1988), can operate in a collaborative form and share their past experience on a project. Whereas, they could also be completed in a systematic format, as detailed in the components (OX, nd) detailed.

Further Reading

Krane, H.P., Olsson, N.O. & Rolstadås, A. (2012), ‘How project manager– project owner interaction can work within and influence project risk management,’ Project Management Journal, 43 (2), pp. 54-67, Business Source Complete [Online]. Available from: [Accessed: February 11, 2016]

Dvir, T., Eden, D., Avolio, B.J. & Shamir, B. (2002), ‘Impact of transformational leadership on follower development and performance: a field experiment,’ Academy of Management Journal, 45 (4), pp. 735­744, EBSCOhost [Online]. Available from: [Accessed: February 24, 2016]

Kelley, R.E. (1988) ‘In praise of followers,’ Harvard Business Review, 66 (6), pp. 142-148. [Online]. Available from: followers [Accessed: February 24, 2016]

OX., (nd) What makes a good systematic review? [Online] Available from:­practitioners/what­is­good­evidence/what­makes­ a­good­systematic­review.html [Accessed: February 28, 2016]

Sanjay M., (2002) The Importance of Post Project Reviews [Online] Available from:­Importance­ of­Post­Project­Reviews.htm [Accessed: February 28, 2016]

Zedtwitz V. M., (2002) ‘Organizational learning through post­project reviews in R&D’, R&D Management, 32 (3), pp. 255­268 [Online] Available from: [Accessed: February 25, 2016]

Implementing project reviews feeds into double loop organizational learning

Опубликовано: May 3, 2017 в 16:10


Категории: Insights

The analyses on how project review processes can feed into double loop organizational learning do not far fetch, as this is a growing discussion among scholars and professionals alike. And to understand this concept, the focus of post­ project reviews needs to be examined. The post-­project review is defined by Zedtwitz (2002), as the process that provides an opportunity to increase steadily performance in the following project. And the realization and application of this methodology will provide multiple advantages, such as reduce project cost, provide proper estimation, increased efficiency, and competitive advantage. More so, the writer went further to state that the project review process concentrates on the relationship between how organizations learn and the team. Since organization learning and team concept are around humans, thus the link exists. The learning in an organization is the ability to influence the way people think and found during subsequent post that leading should mainly be transformed. Thus, double­-loop learning should be viewed as transformational, because its influence change and the perceptions of a team (Sharon, 2002). Also, Kotnour (1999) definition sees double learning, as the process that helps to resolve the mismatch in organizations DNA, by creating new priorities that are associated with strategy and assumption. However, we referred to the strategy here as the way an organization can create a deeper learning, which starts from communication and dialogue between the learners.

The transformational leader also referred here as project manager, is said to “drill down” a particular subject, in an attempt to recognize learners’ assumptions and beliefs. Since, we could conclude that the double­-loop learning will increase organization, collaboration because teams acquire and utilize information, by developing new skills. Besides, it also leads to the team asking the right questions, discard redundant information that causes wrong feeling, the way of acting and thinking. In Chris (1977) publication, examples of the inability to discover information that causes bad feeling, acting and thinking proves that the organizational learning is sick. And the teams in the organization will not be transparent with problems, which eventually creates rigidity and deterioration in the organization. However, when the post project review is employed, companies can learn from past failures and success, by bringing the team into a collaborative mode to reexamine the project scenarios. And determine what went wrong, and how they can be mitigated for the next instance to improve another project that fits the old project profile as Julian (2008) stated.

Although, Zedtwitz (2002) research paper found, face difficulties to implement post-­project review even with the advantages it provides. And this is mostly related to time constraint, less support, and limited personal interest or ability. The writer mentioned this can be improved, by using post­-project meetings to limit the impediments captured. In Collier et al. (1996) paper, the author captures five ways the learning impediments can be neutralized. The post-­project review can feed into double learning because the information derived from post-­project review clarifies opportunities and risk (Rianne, nd; Laura and Jethro, ND). This is when factored into double­-loop learning, enable the transformational leader to create opportunities, which forces a team to think about how to lead, and why they lead as Sharon (2002) mentioned. However, it is important to note that post­-project review will not offer any advantage to double­-loop learning when it is concentrated on conservative agenda or inwardly focused (Zedtwitz, 2002; Vincent, 2014).

Further Reading

Chris A., (1977) Double Loop Learning in Organizations [Online] Available from:­-loop-­learning-­in­-organizations [Accessed: February 25, 2016]

Rianne S., (nd) Learning from Post­Project Reviews [Online] Available from: [Accessed: February 25, 2016]

Laura R., and Jethro P., (nd) Development and the Learning Organization: an introduction [Online] Available from: [Accessed: February 25, 2016]

Kotnour, T. (1999) A learning framework for project management. Project Management Journal, 30, 2, 32 – 38. [Online] Available from: [Accessed: February 25, 2016]

Sharon C., (2002) Double­Loop Learning: A Concept and Process for Leadership Educators introduction [Online] Available from: [Accessed: February 25, 2016]

Vincent V. V., (2014) Single and double loop learning (Argyris and Schon) [Online] Available from:­and­double­loop­ learning­argyris­schon/f [Accessed: February 25, 2016]

Zedtwitz V. M., (2002) ‘Organizational learning through post-­project reviews in R&D’, R&D Management, 32 (3), pp. 255­268 [Online] Available from: [Accessed: February 25, 2016]