Sta Hungry Stay Foolish

Stay Hungry. Stay Foolish.

A blog by Leon Oudejans

Accounting & Auditing

Does gravity affect our micro-macro focus?

Gravity keeps us grounded and prevents us from jumping up high in the air. Could gravity also affect our thinking in a similar way? Many, and perhaps most, people have a micro focus. They look at correctness, at details, at empathy. Nearly all media adopt a micro focus. There is, however, another perspective. On the other side, there is a macro focus. That focus...

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More information = more focus = less knowledge = less common sense

Each day, I receive some 150 newsletters from various backgrounds. I scan all topics and read several articles. There’s a considerable overlap in their topics, which allows me to create some efficiencies. Some articles look promising initially, but are not. The opposite also happens. I’ve plenty of time, being without a paid job. I use that time to read, think and...

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Change blindness (2): audit blindness

Last weekend, I had an epiphany: is audit blindness an example of change blindness? The more you zoom in, the more you lose sight of the bigger picture. That is the essence of change blindness (my recent blog). Auditors certify that the financial statements of a company give "a true and fair view". A company's financial statements should reflect the state of affairs...

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Man is fundamentally much more greedier than he is principled

Recently, I asked a friend and former colleague why there are so many (big) financial scandals in a BULL market (eg, Archegos Capital Management, Greensill Capital, Wirecard). Usually, such scandals occur in a BEAR market because losses can no longer be hidden (eg, from banks, press, public). This discrepancy is bugging me. After some further reflection, I could...

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Trust works better both ways

Many years ago, I entered into a situation in which someone wanted to have proof from me that I can be trusted. Reluctantly, I agreed to that demand. After some reflection on its underlying distrust, I decided to ask for similar proof from that person. That person disagreed. Things quickly escalated and ended badly. In my view, trust works better both ways....

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A happy New Year with even more irrational exuberance

Monetary expansion by Central Banks reached unprecedented levels in 2020. This expansion boosted prices on financial (eg, bonds, shares) and property markets (real estate) rather than in the real economy. These price increases are considered to be profits rather than price inflation, following guidelines (eg, accounting). Also see my 2019...

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