Expect the unexpected with risk models that can’t anticipate the future

April 18th, 2007

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In Myth of diversification as safety?Part 2: nature of risk, we quoted Warren Buffet,

Certain perils that lurk in investment strategies cannot be spotted by use of the models commonly employed today by financial institutions.

In How the folks in the finance industry got the idea of ?risk? wrong!, we questioned the assumption of the concept of ?risk? used in most financial models in the finance industry.

Today, we appluad this article, Expect the unexpected with risk models that can’t anticipate the future in the mainstream media.