"Prediction is very difficult, especially if it's about the future."
Ye can lead a man up to the university, but you can't make him think.
"Our lives improve only when we take chances - and the first and most difficult risk we can take is to be honest with ourselves."
Topics: Spreadsheets, SIFMA, Tax and Accounting Issues, libor
"Opportunity is missed by most people because it is dressed in overalls and looks like work."
Topics: Risk Management, SIFMA, Tax and Accounting Issues, libor
"…companies are finding their standard budgeting and forecasting of little use. The usual trick of plugging figures from operating units into spreadsheets appeals to number-crunchers, but can often generate misleading targets, especially when conditions change fast."
"Finally, the business model of the investment banks is almost certainly going to change. Over the last 20 years, investment banking went from primarily an advisory business to being mostly a business where firms traded their own accounts – so-called proprietary trading."
Topics: Finance Professionals, Wall Street, Investment Banks
"Number 10: Never give up on an idea simply because it is bad and doesn't work. Cling to it even when it is hopeless. Anyone can cut and run, but it takes a very special person to stay with something that is truly stupid and harmful…"
Topics: Finance Professionals, Wall Street, Investment Banks
If you didn't catch it, the NYT magazine this weekend had a cover story on risk which posed the question, was management or specifically risk management more responsible for the current financial mess in which we now sit? Not unexpectedly, Mr. Black Swan himself got a good dose of coverage railing against the utter folly of VaR and seemingly anyone who attempts to quantify anything about risk in finance. The other corner is represented by the leadership at RiskMetrics, Sunguard, etc weighing in with the "calculating risk has benefits" position, given it (VaR) provides relevant and useful information the majority of the time. Taleb's point is the "majority of the time" doesn't matter much after insolvency.
"The whole secret of mysticism is this: that man can understand everything by the help of what he does not understand. The morbid logician seeks to make everything lucid, and succeeds in making everything mysterious."
