Allocating Capital When Interest Rates Are High

During a decade of low interest rates and abundant capital, companies greenlit many projects that make less sense now that the economic environment has changed. To prevent experiencing these regrets in the future, companies should add more value-oriented thinkers to the groups who decide which project to pursue. Although value-oriented thinkers are sometimes disparaged as worrywarts who lack imagination, in fact their cautious, rational approach to analysis can be an important counterbalance to the reckless optimism that’s become prevalent in recent years.