26-01-2005 23:17									#391
	Inflate your Upload Space

quote: Originally posted by Flubber hey -- you are the guy wanting to pay the worker based on the value of what they produce. So if the product is contaminated or unusable, obviously they get nothing right. The capitalist would pay the worker anyway.

Why are you talking about contaminated things? If there is nothing wrong with the product, save for there is too much competition in the market place, or the good is no longer socially necessary, the capitalist will fire the worker.

	26-01-2005 23:18									#392
	Browse Apolyton AD-FREE

quote: Originally posted by Kidicious You would think that you would start to understand some of the things that you make me repeat over and over. It's the labor which is valuable to society. Labor produces the value. That's how we know how valuable something is. The only task is to make that labor productive - to organize it so that it produces beneficial things for us.

You have not abolished currency and I think you are now allowing some difference in salaries so my question is whi determines the NUMBER, the AMOUNT-- the worker may love your theory but they still want to know how big the paycheque will be.

	26-01-2005 23:21									#393
	Increase Your PM Length

quote: Originally posted by Flubber I still don't understand why the things others can do are impossible to you

How can I help you? You need to be reasonable. There's no shot to give someone to make them reasonable. Only you have the power to be reasonalbe.

quote: I wouldn't be lecturing if I were you. Your quote of that insurance premium article showed how little you understand risk.

Did you catch the title - The Cost of Risk? I can't be arsed into finding material for you to learn from. Do your own research.

	26-01-2005 23:23									#394
	Support Apolyton, buy GURPS/ Alpha Centauri

quote: Originally posted by Flubber You have not abolished currency and I think you are now allowing some difference in salaries so my question is whi determines the NUMBER, the AMOUNT-- the worker may love your theory but they still want to know how big the paycheque will be.

When you have control of production and distrubution you no longer have shortages and surpluses which create variations in prices (wages) in a capitalism system. Labor will largely be compensation equally.

	26-01-2005 23:29									#395
	Got spare money?

ON risk



Yes companies pay insurance premiums for various insurable risks but those costs are generally pretty fixed in a large company and in fact many of such costs DO NOT get costed out to projects at all when doing an analysis. WHY? The company is large and does so many operations that they don't want to bother to be amending their coverages literally every day. So most of these costs are fixed or sunk and don't even be considered at a project level for the simple reason that the project does not increase them.


Bottom line is that risks for things that are insured are no longer risks of the project at all. The risks that matter in an analysis of a project are simply an analysis of the liklihood of various revenue and cost levels. In the oil business there are risks associated with construction costs, pricing of product and reservoir preformance just to name 3. You can't "insure" any of these (well you can insure price a little through various financial instruments)


So when a businessman talks about risk-- these are the types of things they are talking about. Insurance premiums are just one of a multitude of costs that go into the cost of the project and have NOTHING to do with "risk" as that term is used to determine what level of projected profitability is needed for a viable project.

	26-01-2005 23:31									#396
	Suffering from ads?

quote: Originally posted by Kidicious When you have control of production and distrubution you no longer have shortages and surpluses which create variations in prices (wages) in a capitalism system. Labor will largely be compensation equally.

OK

so the value of the product they are working on is irrelevant? So why the smokescreen and side trip through ideas of societal value.

You will pay a "fair wage" regardless of the value of a given worker's work, right?

Thats different than what you were saying before.

	26-01-2005 23:36									#397
	Remove this text

quote: Originally posted by Kidicious Did you catch the title - The Cost of Risk? I can't be arsed into finding material for you to learn from. Do your own research.

Yup and the title was catchy and used your term "cost of risk" and then had ABSOLUTELY NOTHING to do with "risk" as the term is used in ANY analysis of a project.


Or do you think that the size of an insurance premium changes how much profit ( as a percentage) that a business seeks on a given project.


Admit it kid-- you blew it on that one-- you googled for "cost of risk" and then cited an article with no consideration of what it was about.

	26-01-2005 23:40									#398
	Tired of ads?

quote: Originally posted by Flubber ON risk Yes companies pay insurance premiums for various insurable risks but those costs are generally pretty fixed in a large company and in fact many of such costs DO NOT get costed out to projects at all when doing an analysis. WHY? The company is large and does so many operations that they don't want to bother to be amending their coverages literally every day. So most of these costs are fixed or sunk and don't even be considered at a project level for the simple reason that the project does not increase them. Bottom line is that risks for things that are insured are no longer risks of the project at all. The risks that matter in an analysis of a project are simply an analysis of the liklihood of various revenue and cost levels. In the oil business there are risks associated with construction costs, pricing of product and reservoir preformance just to name 3. You can't "insure" any of these (well you can insure price a little through various financial instruments) So when a businessman talks about risk-- these are the types of things they are talking about. Insurance premiums are just one of a multitude of costs that go into the cost of the project and have NOTHING to do with "risk" as that term is used to determine what level of projected profitability is needed for a viable project.

Blah blah blah. You have a risk, and you pay to avoid it. It's very simple. Risk is a cost. It is not profit. If you wanted to pretend that there was no cost to taking a risk than you may make more profit initially, but eventually you will lose, because you haven't calculated your costs correctly.

	26-01-2005 23:41									#399
	Enter the AD-FREE zone

It never ceases to amaze me how much kid flat out doesn't know or makes up, fully believing he's right the whole time. It really is almost fezzian.

	26-01-2005 23:41									#400
	Support Apolyton buy from Amazon

quote: Originally posted by Flubber OK so the value of the product they are working on is irrelevant? So why the smokescreen and side trip through ideas of societal value. You will pay a "fair wage" regardless of the value of a given worker's work, right? Thats different than what you were saying before.

Yes you pay a fair wage, and if the work is no longer socially necessary or less socially necessary from some other work then you reallocate the labor.

	26-01-2005 23:42									#401
	Full PM-box? Change here!

quote: Originally posted by Kontiki It never ceases to amaze me how much kid flat out doesn't know or makes up, fully believing he's right the whole time. It really is almost fezzian.

True-- but its not often he is so demonstrably wrong. Rookie error to cite an article without reading it.

	26-01-2005 23:43									#402
	Support Apolyton buy from Amazon

quote: Originally posted by Flubber Yup and the title was catchy and used your term "cost of risk" and then had ABSOLUTELY NOTHING to do with "risk" as the term is used in ANY analysis of a project. Or do you think that the size of an insurance premium changes how much profit ( as a percentage) that a business seeks on a given project. Admit it kid-- you blew it on that one-- you googled for "cost of risk" and then cited an article with no consideration of what it was about.

I didn't read the article. I skimmed it to see whether it is relevant, and it is. That's about all I will do to help you. If you want to go on thinking that there is no cost to taking risk go ahead.

	26-01-2005 23:45									#403
	Support Apolyton, pre-order Civilization IV

quote: Originally posted by Flubber True-- but its not often he is so demonstrably wrong. Rookie error to cite an article without reading it.

I have a BA in econ, and I'm well into my accounting degree. I can't be arsed into proving myself to you. You're lucky that I put in the effort that I did.

	26-01-2005 23:50									#404
	Support Apolyton, pre-order Civilization IV

quote: Originally posted by Kidicious Blah blah blah. You have a risk, and you pay to avoid it. It's very simple. Risk is a cost. It is not profit. If you wanted to pretend that there was no cost to taking a risk than you may make more profit initially, but eventually you will lose, because you haven't calculated your costs correctly.

Kid are you still talking about insurance premiums ?? They are irrelevant to a risk assessment. The only risk a businessman care about are those that cannot be insured.

Also when we do a new project, we buy ZERO new insurance. . .. why? Because existing policies cover ongoing and NEW activities. We will probably drill 1000 new wells this year-- do you think we insure them separately??

	26-01-2005 23:52									#405
	Support Apolyton buy from Amazon

quote: Originally posted by Kidicious I have a BA in econ, and I'm well into my accounting degree. I can't be arsed into proving myself to you. You're lucky that I put in the effort that I did.

Arts in polisci and business
Law
MBA 3/4 done

so what?
Do we take out rulers next?

Right is right and wrong is wrong regardless of the degrees behind it

	26-01-2005 23:56									#406
	Support Apolyton, buy Galactic Civilizations

quote: Originally posted by Flubber Kid are you still talking about insurance premiums ?? They are irrelevant to a risk assessment. The only risk a businessman care about are those that cannot be insured. Also when we do a new project, we buy ZERO new insurance. . .. why? Because existing policies cover ongoing and NEW activities. We will probably drill 1000 new wells this year-- do you think we insure them separately??

Complete crap. If a busines didn't care about risk they would never pay for insurance. The fact that they do means that they see a cost of risk, and want to avoid it. Costs are paid for one way or another. If you don't pay for insurance you still have the risk cost.

	26-01-2005 23:58									#407
	Support Apolyton, buy Alpha Centauri

quote: Originally posted by Flubber Arts in polisci and business Law MBA 3/4 done so what? Do we take out rulers next? Right is right and wrong is wrong regardless of the degrees behind it

Economics and accounting are more appropriate for what we are talking about perhaps, but I will do you a favor and find something. You have to appreciate it though.

	27-01-2005 00:17									#408
	Full PM-box? Change here!

Flubber,

You know that a risk premium is the premium paid to someone for taking your risk, right?

	27-01-2005 00:26									#409
	Support Apolyton buy from Amazon

quote: Originally posted by Kidicious Flubber, You know that a risk premium is the premium paid to someone for taking your risk, right?

Wrong. It's the premium paid to someone for taking your risk IF THE INVESTMENT PAYS OFF. If the risk premium is 20% and the project is a complete failure, the investor does not get 20%.

	27-01-2005 00:30									#410
	Suffering from ads?

quote: Originally posted by Kontiki Wrong. It's the premium paid to someone for taking your risk IF THE INVESTMENT PAYS OFF. If the risk premium is 20% and the project is a complete failure, the investor does not get 20%.

What are you talking about? When you buy insurance the insurance pays for the loss that is insured. You violate rationality assumption by claiming that someone would pay for something that isn't a cost or something that they don't get a benefit from.

	27-01-2005 00:43									#411
	Increase the size of your Attachments

Let me ask this to try to save me some time.

What is the cost of not buying insurance?

	27-01-2005 00:49									#412
	Put an end to popups!

quote: Originally posted by Kidicious What are you talking about? When you buy insurance the insurance pays for the loss that is insured. You violate rationality assumption by claiming that someone would pay for something that isn't a cost or something that they don't get a benefit from.

You know absolutely nothing about finance or business, do you? As Flubber has repetedly stated, and now I have, THERE IS NO INSURANCE FOR CERTAIN THINGS. If a project fails as I laid out above, where's the insurance? What happened to the 20% risk premium? Where's the investor's compenstation?

	27-01-2005 00:53									#413
	Support Apolyton, buy Alpha Centauri

quote: Originally posted by Kontiki You know absolutely nothing about finance or business, do you? As Flubber has repetedly stated, and now I have, THERE IS NO INSURANCE FOR CERTAIN THINGS. If a project fails as I laid out above, where's the insurance? What happened to the 20% risk premium? Where's the investor's compenstation?

Did I say there has to be insurance? No I didn't. I'm just trying to help you understand, and save myself some time. Insurance is an agreement to take on the cost of risk for consideration. If you don't have insurance then you keep the risk cost. You still consider that risk when you make you pricing decision. If you don't then you won't be in business long. If you don't think there is any chance of your buildings being destroyed by fire and you price according to only other costs, then your price is too low, because you are a silly polytubby incapabale of recognizing costs.

	27-01-2005 01:02									#414
	Support Apolyton, pre-order Civilization IV

Wow. Just wow.

One more time, really slowly:

If there is a 5% chance the investor could lose his $100 million investment, what is the insurance?

	27-01-2005 01:04									#415
	Support Apolyton, buy Call to Power 2

quote: Originally posted by Kontiki Wow. Just wow. One more time, really slowly: If there is a 5% chance the investor could lose his $100 million investment, what is the insurance?

What the hell is wrong with you? I said there doesn't have to be insurance. Insurance is just an example.

	27-01-2005 01:09									#416
	Support Apolyton

Let me try again to make this very simple for you. Revenue is your benefit. Subtract your costs from that to get your profit. The risk of fire (for example) is calulated and substracted from revenue in the analysis to forcast profit. Either that or you can buy insurance. It really doesn't matter. Risk is not profit.

	27-01-2005 01:09									#417
	Browse Apolyton AD-FREE

quote: Originally posted by Kidicious Economics and accounting are more appropriate for what we are talking about perhaps, but I will do you a favor and find something. You have to appreciate it though.

Oh plus 10 years working-- including inside a couple of major oil and gas companies where we see the cost benefit analysis stuff regularly. Its actually a big part of legal drafting since if I can get a contract that fixes labour costs that ameliorates that risk. If I can get a long term gas purchase contract, that lessens the risk as well but may also eliminate much of the upside.

You can go look for your article but I accept and acknowledge that insurance costs money. I never disputed that. Do we really need to state the obvious?its just that it is often a fixed cost like all the head office fixed and sunk costs that are not factored in either (except to the extent that there is an "overhead"element.

Its also obvious that risks that are insured are no longer risks of the project. The risks to the project relate to the probabilities of various financial outcomes. Since a company can invest and get a 99.999% chance of say, a 6 % return, obviously they want something more for a riskier investment. In this analysis "risk" is NOT a cost. It is a broader concept.


If you want to talk about insurance premiums, call them that.

	27-01-2005 01:17									#418
	Support Apolyton, buy GURPS/ Alpha Centauri

quote: Originally posted by Kidicious Let me try again to make this very simple for you. Revenue is your benefit. Subtract your costs from that to get your profit. The risk of fire (for example) is calulated and substracted from revenue in the analysis to forcast profit. Either that or you can buy insurance. It really doesn't matter. Risk is not profit.

No risk is not profit nor is it a cost. Insurance premiums are a cost but as I have explained repeatedly, most of the time you pay no ADDITIONAL premium when you do a new project . If there is one, its a cost just like rent or wages or materials or anything else. So how does this become a big factor in determining whether a capitalist does a project or not?


Bottom line-- a capitalist does a risk weighted assessment of costs and revenues to assess a project. If you think insurance premiums have anything to do with this process, I can only laugh .

	27-01-2005 01:18									#419
	Support Apolyton

quote: Originally posted by Flubber Oh plus 10 years working-- including inside a couple of major oil and gas companies where we see the cost benefit analysis stuff regularly. Its actually a big part of legal drafting since if I can get a contract that fixes labour costs that ameliorates that risk. If I can get a long term gas purchase contract, that lessens the risk as well but may also eliminate much of the upside. You can go look for your article but I accept and acknowledge that insurance costs money. I never disputed that. Do we really need to state the obvious?its just that it is often a fixed cost like all the head office fixed and sunk costs that are not factored in either (except to the extent that there is an "overhead"element. Its also obvious that risks that are insured are no longer risks of the project. The risks to the project relate to the probabilities of various financial outcomes. Since a company can invest and get a 99.999% chance of say, a 6 % return, obviously they want something more for a riskier investment. In this analysis "risk" is NOT a cost. It is a broader concept. If you want to talk about insurance premiums, call them that.

None of this supports your argument that risk is not a cost. If you already have insurance, then sure the cost is fixed, but when you decide on your price you either calculate your risk or you calculate the insurance that you have. Whether you count it as OH or not is irrelevent.

	27-01-2005 01:23									#420
	Support Apolyton, buy GURPS/ Alpha Centauri

quote: Originally posted by Flubber No risk is not profit nor is it a cost. Insurance premiums are a cost but as I have explained repeatedly, most of the time you pay no ADDITIONAL premium when you do a new project . If there is one, its a cost just like rent or wages or materials or anything else. So how does this become a big factor in determining whether a capitalist does a project or not? Bottom line-- a capitalist does a risk weighted assessment of costs and revenues to assess a project. If you think insurance premiums have anything to do with this process, I can only laugh .

The fact is that companies buy insurance. They do so because they have a cost that they want to avoid. If you have 10 years of experience and don't understand that then there are no websites for you to look at. You are too silly to bother with.