Quantitative Modeling Approach

Our ERM Modeling Philosophy:

1. We marry (i) expert insights and market intelligence with (ii) objective data analysis and risk modeling.
2. Macro-level: We track emerging macro-economic trends, monetary and fiscal policies, their impacts on foreign-exchange rates, inflation and interest rates. We systematically identify abnormal departures of market value from long-term trend or economic intrinsic values. We quantify both the force of short-term momentum and the force of reversion to Long-term intrinsic value.
3. For a specific industry/sector: We strive for deeper understanding of the major players, their interplays and the resulting risk dynamics.
4. At a firm level: we analyze a firm’s specific business models and its competitive environment. We evaluate the business logic for sustainable growth, vulnerability of profit margin, complexity, information gap, and weakness in supply chain.
5. We put emphasis on the front-end risk assessment and modeling. We believe in proactive management: Hedge while it is cheap.