Isn’t this gloriously fun!

Hanton joined RTZ (now Rio Tinto) in 1964, analysing investment opportunities for proposed mines in South America and using discounted cash flow (DCF) techniques to predict future revenue from the asset over time. He had helped to develop these analytical methods with his friends AJ Merritt and Allen Sykes, contributing ideas to their seminal book, The Finance and Analysis of Capital Projects. Today DCF techniques are a fundamental tool of the investment community.

In retirement Hanton became deputy chairman of Christian Aid as well as chairman of Living Streets and the London Cycling Campaign. He turned a Quaker-led trade justice group into the Fairtrade Foundation, involving Christian Aid, Oxfam and Cafod, effectively inventing a process by which, in exchange for using the Fairtrade label on coffee, tea and bananas, supermarkets would guarantee a fairer price to producers as well as paying a small royalty.

The P³ is resolutely against the use of discounting. Despite that source……

4 thoughts on “Isn’t this gloriously fun!”

  1. Murph “is resolutely against the use of discounting”: ah, so he’ll decline to accept any interest on his savings? He must therefore be perfectly indifferent to the collapse of interest rates over the last dozen years?

  2. For fucks sake… you don’t use DCF to predict future revenue. The assumptions around future revenue are a fucking input into the DCF model. This is not really rocket science stuff.

  3. Emil beat me to it. DCF uses predicted revenue streams over time to value the asset.
    Some sub-editor has scrambled the sentence

  4. Fairtrade guarantees to pay a “fair” (whatever that is) price for the crop. So the farmer has no incentive to improve quality.
    You can see the result in comparing coffee from Illy. Illy sends out agronomists who advise small farmers on how to grow the stuff that will fetch the highest price.ThenIlly pays the market price.

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