You probably have seen my comments on this subject many times in the past. They’re the result of my observing the successes, failures and foibles that I have noted on Wall Street.
One has to do with the study of failures of the many mathematical models that have been devised to reduce risk. The models have not cut investment risk that is their primary objective.
I am not talking about the well-discussed Black Swan concept of risk that happens once every fifty years or more. Concerning events such as the financial meltdown. But they regard the constant use of financial models which don’t seem to work as they are intended to do.
The truth is, some complex models work but they are destined to eventually fail, no matter the brain-power and effort applied.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)
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