An Kang, whose view of money is in a state of uncertainty, actually does not put all his mind on making money, because his current projects are under heavy pressure, in addition to often going to Zhangjiang with Zhou Mingfeng to see high-tech projects, several projects he is responsible for have also entered a critical closing period.

One of these projects happened to be in collaboration with Wu Mo.

The reason why Ankang and Wu Mo collaborated on this project was neither Wu Mo's deliberate designation nor Zheng Lichen's deliberate arrangement. This is the project at hand of the investment manager that Ankang took over. The investment manager was still on semi-vacation, so Ankang had to spend some energy to help him deal with the follow-up of the project.

However, after Ankang carefully reviewed the project information, he found that there were some risks in the company's operation, and warned Wu Mo.

After Wu Mo re-examined the questions raised by An Kang, he thought that the views raised by An Kang were nonsense. Because this project is a project about chain retail that Ankang is not good at. Wu Mo has done similar projects in the United States and has rich experience. Ankang, on the other hand, has no experience with similar projects at all. However, Ankang raised the issue of inventory, which is strongly related to retail expertise.

Ankang believes that the company's inventory and inventory turnover do not reflect the company's existing sales volume at all, so he concluded that the company's sales data may be falsified.

Although Wu Mo vetoed this view, Ankang is still very persistent. The two even quarreled in front of everyone at the investment project analysis meeting.

The quarrel between the two also attracted the attention of everyone in the company. However, after judgment, everyone believes that Wu Mo's investment decision is right. After all, Wu Mo can be said to be an expert in commercial retail, and she is also a very meticulous person in project analysis. Regarding the analysis data of inventory, Wu Mo took out as many as 40 excel sheets.

Xiao Zhao, an intern who collected data and did basic analysis for Wu Mo, also explained that there was no problem with the data source of these tables. All in all, it looks fine in every way.

Wu Mo forced Ankang to ask what is the problem?

In the face of everyone's doubts, Ankang even began to lose his confidence. After all, he has no experience in commercial retail, and all the analytical data comes from purely theoretical financial analysis.

There will be a time lag between inventory and sales, and Ankang knows this. There will also be a time lag between the inventory in each store and the inventory in the warehouse, which Ankang also knows. But the statistical distortion caused by the time difference and the discrepancy between the sales data are so big that Ankang cannot understand.

Ankang rebuilt a data model for this purpose, substituting various parameters into it for calculation, and the results of the calculation still support Ankang's conclusion that there is moisture in sales data.

In order to verify the conclusion of his analysis, Ankang sent an email to Professor He, a teacher at the university, and provided him with detailed arguments and the process of argumentation.

Although Professor He said that he is not familiar with commercial retail, he is also a theoretician and analyst like An Kang.

Professor He and Ankang took out similar commercial retail cases for comparative analysis, and tried to find out the operating data and financial statements of those companies, and made several different models to simulate the difference between inventory turnover and sales of enterprises of the same size. No matter what kind of theory or model is used, the deviation of the project that Wu Mo is responsible for is the largest among all companies.

Of course, the presence of a deviation does not necessarily mean that there is a problem, but it must be the greatest risk.

What are the risks? Most people's understanding of risk is incorrect. Many people think that risk represents mistakes and failures, but in reality risk is neither right nor wrong, but rather right or wrong. Statistically, risk is reflected in terms of deviation values such as standard deviation.

Risk control is to adjust the probability of occurrence by analyzing the influencing factors and laws of risk, or formulate corresponding avoidance rules.

When I was in college, Ankang's teacher gave a very vivid and interesting example of what risk is and how to avoid it:

A securities firm employs three securities analysts. After a period of time, the brokerage firm found that every prediction made by securities analyst A about whether the stock would rise or fall was correct. Securities analyst B is wrong every time. And securities analyst C is right half the time and wrong half the time.

Who is the most risky analyst in A, B, and C?

Most of the students voted for Analyst B because Analyst A had a 100% success rate, Analyst C had a 50% success rate, and Analyst B had a 00% success rate, which was the worst.

However, the teacher's answer surprised the students. Securities analysts A and B are both good analysts, and the analyst with a 50% success rate is the worst.

Why is this happening?

The teacher explained that when you know that Analyst B guesses wrong every time, you only need to reverse the operation based on his analysis results. Therefore, for analyst B, there is a simple and effective way to avoid risk, which is to use all his analysis conclusions in reverse. Once the risk is avoided, the analyst's job is risk-free.

With Analyst C, you have no idea when to listen to him and when to do the opposite. Because when encountering such uncertain people and things, you have no way to use technical means to avoid risks.

The actuarial department of an insurance company does this kind of risk analysis. The insurance company never cares whether a thing can be successful or not, but calculates the probability of success of the thing, and then calculates the amount of the policy and the amount of compensation through the probability. As long as the premium amount of the final policy is greater than the benefit amount, then the product can continue to be made. As for whether the probability of something happening is 1 in 10,000 or 1 in 10,000, it is the same for the insurance company.

Insurance companies are good at using other people's money to make their own profits, which is called arbitrage in finance, and it can generate huge cash flow. This is also the reason why many capitalists must put an insurance company in their industrial portfolio. Warren Buffett, who advocates "putting all your eggs in one basket", treats insurance companies as another safe basket, and he is a master who is good at using the insurance business to create stable returns for his asset portfolio.

Therefore, the conflict between An Kang and Wu Mo about this project is actually a conflict between the relative and the absolute. Wu Mo judged based on his own experience and the general laws of the industry that the possibility of problems was negligible. Ankang is based on the relationship between the probability of the problem and the amount of investment, and the investment is judged to be more risky.