How to avoid Black Swan excrement
|Sep 30th, 2009 | Filed under: Hedge Fund Operations and Risk Management, Today's Post | By: AAA Staff||
There is no certainly shortage of circumspect navel-gazers looking to determine what went wrong last year in terms of miscalculating risk. And fair to say that the entire investment industry, hedge funds included, could benefit from a little circumspection in the wake of the worst financial crisis in more than 70 years.
The reality, however, is that post financial market meltdown and Great Recession, looking at what could work going forward in terms of having the bells, whistles and flashing lights go off rather than figuring out what didn’t work is, at this stage, a much more effective and enticing proposition.
Part of which explains why Dr. William Shadwick’s presentation to AIMA Canada and PRMIA Toronto members on “Going to Extremes to Control Risk” a few weeks back pulled in such a strong crowd.
“It’s not that the risk management and valuation practices being used by the banks and others weren’t any good,” Shadwick told roughly 100 intent listeners gathered at the University of Toronto’s Fields Institute, “it’s that they didn’t work.”
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