Home' Trinidad and Tobago Guardian : February 18th 2018 Contents Sunday, February 18, 2018
Companies trying to break
into foreign markets often
employ a number of tac-
tics to build traction.
One such tactic is the practise
formally known as dumping.
Properly de ined, dumping in-
volves the export by a country or
company of a product at a price
that is lower in the foreign import-
ing market than the price charged
in the exporter's domestic market.
Such a strate y may be em-
ployed by a dominant irm to
attack rivals, an approach to build-
ing market share often referred to
as predatory pricing.
Because dumping typically in-
volves substantial export volumes
of a product, it often has the ef-
fect of endangering the inancial
viability of manufacturers or pro-
ducers of the product in the im-
The primary advantage of
dumping is the ability to permeate
a market with product prices that
are often considered unfair.
Participants in international
trade are often accused of dump-
ing by domestic irms charging
more than rival imports.
Countries can slap duties on
cheap imports that they judge are
being dumped in their markets.
While the World Trade Organi-
zation (WTO) reserves judgment
on whether dumping is an unfair
competitive practice, most na-
tions are not in favor of dumping.
Dumping is legal under WTO
rules unless the foreign country
can reliably show the negative ef-
fects of the exporting irm on its
To counter dumping, most na-
tions use tariffs and quotas to
protect their domestic industries
from the negative effects of preda-
Further, the application of var-
ious trade agreements is also en-
forced to stymie the potential for
The majority of trade agree-
ments include restrictions on
If both partners stick to the
agreement, they can compete
fairly and avoid it.
If two countries do not have a
trade agreement in place, then
there is no speci ic ban on trade
dumping between the countries.
Many large manufacturing coun-
tries such as China and Canada
have been accused of dumping
their products in various export
In 2017 for example, the Trump
Administration warned Canada it
would impose a 20 percent tariff
on its $10 billion of lumber ex-
In practice, genuine predatory
pricing is rare.
In any case, consumers gain
from lower prices; so do compa-
nies that can buy their supplies
more cheaply abroad.
with Andre Worrell
Common investing errors to avoid
Investors of all stripes make
mistakes from time to time.
It's just the nature of being
human in a world of many un-
Most investing errors are usually
errors of ommission (leaving some
stone unturned) or commission
(inaccurately accounting for some
The biggest error however, lies
in not analyzing or reflecting on
why we made the errors in the
Understanding how our brain
works will always be one of the
key factors in any investors suc-
That said, a couple errors always
seem to recur.
One such error that many in-
vestors succumb to lies in over-
reacting to the latest news about
Most times, investors emotion-
ally pile in on good news and rush
for the exits on bad news, caus-
ing prices to overshoot and also
missing opportunities that a more
sober approach would allow them
Making buy or sell decisions be-
cause of some "latest news" with-
out careful thought and analysis
as to why we should even take
such actions in the irst place typ-
ically leads to bad outcomes.
For example, if a company re-
ports an increase in earnings,
our brains might feel something
golden and jump on the band-
Does that mean we should buy
it right away?
Without careful thought, we
could be doing ourselves more
harm than good.
This brings me to a second
common mistake that should be
also avoided: focusing on results
rather than process.
Famed investor Seth Klarman
said it best: "A good result says
nothing about whether the pro-
cess involved was a good one and
whether or not the success might
It is to the peril of the investor
to ignore process.
You could have a good process
but a bad outcome.
Or you could have a bad pro-
cess but a lucky outcome.
The bad process/lucky outcome
combination is worse because it
sets investors up for a higher like-
lihood of failure in the future.
One inal error that seems to
trip up even the wisest investors
from time to time is the habit of
looking in the rearview mirror.
Our expectations about future
events can be distorted by past
Thinking too much about the
past can cause a level of hesi-
tancy that borders on an immo-
bilizing fear when it comes to
Such fear can cause investors to
miss genuine bargains that exist
in the market.
All told, investing success, at its
core, can be a game of error-min-
As Warren Buffett once said:
"You only have to do a very few
things right in your life so long
as you don't do too many things
sunday business explains SB5
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