The power of redundancy

Redundancy is the excess capacity or capability that enables systems to withstand or exploit volatility. Rarely is the risk management property of redundancy caught in the financial media flow, which is a shame as it’s extremely useful in investing. A simple awareness brings risks and opportunities previously ignored into focus. As a starting point what’s more useful? Someone’s out of consensus view of a business’s earnings next period, or a description of how the business is positioned to cope with unusual events on the upside and downside? This is an important distinction that ties into how we perceive risk. The hierarchy in analysis matters. We identify the layers of redundancies that can fuel compounding growth and compare two companies that pass this qualitative filter - enterprise software providers, Technology One (TNE) and Objective Corp (OCL). (VIEW LINK)