Capital Allocation Lessons From The Oil And Gas Industry
It’s not always enough to decide whether or not a project will be successful, financial constraints mean that managers often have to choose between competing projects, but setting priorities aren’t always rigorously set.
“When it comes down to the final decision, especially when hard choices need to be made among multiple opportunities, they resort to less rigorous means—arbitrarily discounting estimates of expected returns, for example, or applying overly broad risk premiums,” write Martin Pergler and Anders Rasmussen for exclusively for paying members. Access all of our content on including years of timeless investment news and in depth analysis for only a few dollars a month by signing up here while also supporting quality content and journalism, or learn more about our premium content here
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