Harvard Business Review: on unquantifiable risks
Quote: Routine risks like worker safety and even some day-to-day trading hazards can thus be managed successfully with a mechanistic, scientific approach. But the kind of big-picture bets that JP Morgan’s chief investment office made could never be tested, or managed, in that way.
So it was Lyme disease that did it! The tick-borne illness kept JPMorgan Chase’s Ina Drew out of the office for extended periods in 2010 and 2011. And it was during Drew’s absences, according to a richly detailed account in The…
These “preventable surprises” (a more action oriented phrase than black swan) are, to my mind, the outcome of 6 major drivers creating a toxic mix. These risks can be evaluated and its possible to put figures to this. But the key gap today is a willingness to manage them.
it’s a good point: some unknowns can be evaluated and quantified, but what do we do with the residual uncertainty, those factors that can’t – yet – be quantified?
NOTE I now post my TRADING ALERTS into my personal FACEBOOK ACCOUNT and TWITTER. Don't worry as I don't post stupid cat videos or what I eat!