Why I question that...(part 1 and 2)
Part 1
You Don't Need An Education to Get Rich?
New York Times article by Louise Story, offers a variation on the theme. It says that with so many quant whizzes getting rich at hedge funds and private equity firms, many of today's best and brightest -- or at least the mathematically gifted -- are skipping M.B.A.'s and going straight to the trading desk.
There is no doubt that the article suggests education isn't really everything, but not much of a lesson either. Not only the connection between education and wealth breaking apart but the Plato quote dating 427 BC as well. Why? As per his words a hero is born among a hundred, a wise man is found among a thousand, but an accomplished one might not be found even among a hundred thousand men. The most probably a hedge-funders here are heroes with a short shelf life, too.
Undoubtedly, a kind of panacea I wouldn't take counsel, albeit their apparent skills. Consequently, one might question their attitude, too.
Part 2
Bookstaber Asks: Where Were the Risk Managers?
Bookstaber Asks: Where Were the Risk Managers?
Former fund manager, Wall Street risk manager and now author Richard Bookstaber reviews the recent losses in mortgages, leveraged lending and hedge fund quant trading and asks if firms' top risk managers prepared properly for the periodic blow-ups that occur from time to time in financial markets.
I ask also!
Welcome your comments!
Comments: View Comments | Tuesday October 16, 2007
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Archive Comments (1)
Have you read The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb?
Taleb, a pioneer of complex financial derivatives, made a huge fortune on Wall Street, and is an essayist, philosopher of randomness, researcher, and practitioner of mathematical finance.
His definition of a "black swan" is a large-impact, hard-to-predict, and rare event beyond the realm of normal expectations. Taleb regards many scientific discoveries as black swans--"undirected" and unpredicted.
He reduced his financial mathematics activities to start a second career as an epistemologist of chance events and focus on the development of his black swan theory of unexpected rare events. Taleb's literary approach is to provide a modern-day brand of philosophical tale by mixing narrative fiction, often semi-autobiographical, with scientific commentary.
Taleb's views on investing are the opposite of mine; he says put 95% of your money in ultra-safe bonds and invest the rest in a lot of cutting edge start ups in search of a black swan. You won't lose much on negative black swans, but you can make an enormous fortune on a positive black swan. He believes any other form of "risk management" in investing is a waste of time.
What do you think?
By the way, most of his very large book has nothing to do with investing; it's more about logic.
Posted by Eileen Teska October 29, 2007 10:33 AM