Feeds:
Posts
Comments

Posts Tagged ‘Peter L. Bernstein’

A system that cannot rely on the frequency distribution of past events is peculiarly vulnerable to surprise and is inherently volatile.
    —    Peter L. Bernstein
From his book:  “Against The Gods
.

Read Full Post »

Derivatives are financial instruments that have no value of their own.  That may sound weird, but it is the secret of what they are all about.  They are called derivatives because they derive their value from the value of some other asset, which is precisely why they serve so well to hedge the risk of unexpected price fluctuations.  They hedge the risk of owning things … in short any asset whose price is volatile.
… Derivatives cannot reduce the risks that go with owning volatile assets, but they can determine who takes on the speculation and who avoids it.
   —   Peter L. Bernstein
From his book:  “Against The Gods
[And this is the problem with the current housing crisis.  Bad loans have been mixed (“bundled”) with good loans in an unspecified (unregulated by the government) mishmash which devalues the good loans and the derivatives from the associated bundles.  The risk has been “socialized” by passing on these bundles of undetermined value to Fannie Mae and Freddie Mac (essentially, us the U.S. taxpayer).  Without the ability to “un-bundle” the good from the bad, anyone holding derivatives from the last ten years has no way to determine value or risk.  The financial structure (banks and other private holders of bundles) cannot do it without the real risk of being forced into bankruptcy by having to acknowledge how much is bad;  the government cannot do it (in a timely manner) without acknowledging much of the financial structure is bankrupt and therefore forcing a great depression…  The only hope is a slow, moderated unwinding of the process while simultaneously ensuring it is not still happening.  But time is against you, because the emperor has no clothes!    —    KMAB]
.

Read Full Post »

Likeness to truth is not the same as truth.
 

—   Peter L. Bernstein
Against The Gods

Read Full Post »

The essence of risk management lies in maximizing the area where we have some control over the outcome while minimizing the areas where we have absolutely no control over the outcome and the linkage between effect and cause is hidden from us.
    —    Peter L. Bernstein
From his book:  “Against The Gods
.

Read Full Post »

To be valid, hypotheses must be subject to falsification — that is, they must be testable in such fashion that the alternative between reject and not-reject is clear and specific and that the probability is measurable.
    —    Peter L. Bernstein
From his book:  “Against The Gods
.

Read Full Post »

In reverse order from the today’s title: yesterday, I went to the Richmond Kaiser ER via ambulance.
I wasn’t feeling well when I got up, but like a true martyr, I decided to tough it out at work.  “Share the wealth!“, that’s what I always say.  No point in being ill on a workday, if you can’t share it with everyone else in the office.  About 10, I started getting nauseous.  Then, I started getting dizzy.  By about 10:30, I couldn’t concentrate or think straight.  So, (worried about having a stroke) I got to my feet and staggered over to the nurse’s office down the hall from my desk.
They sat me down and did the normal stuff – pulse and BP and asking questions.  Since they are aware of my A-Fib, of course their first concern was that I might be having a stroke or heart attack.  I remained confused and dizzy so they called 9-1-1 to get an ambulance.  They took me to Kaiser ER and I spent the next 3 hours being looked after there.
I must say, this was my first experience with Kaiser and they were very kind and professional.  I would definitely have no worries about going there in the future if I ever change my health insurance.
Anyway, they sent me home with a prescription for the dizziness and a note to stay home for two days.  The doctor also advised me to stay in bed, drink lots of fluids and get my ears cleaned (too much wax).  He said my right ear looked a little inflamed, but there was no temperature or indication of infection.
I picked up my car at work, drove home and hopped into bed.  I crashed out for a couple of hours and felt much better – so I read a little, then took my meds and crashed out for the night.
So, no jog last night…  My streak ended at 12 consecutive days.  That’s not bad for me.  I’m usually a 5-6 day and then off for a couple days jogger.  So, I’ll see when I’m able to start a new streak.  My right ear is still throbbing a bit, so it probably won’t be today.  Don’t know about tomorrow.  Maybe, Thursday.  I’ve scheduled my ear cleaning for that day, so that should  help.
I added two more song lyrics today.  The first is titled: “Woyaya“, and is sung by an African group based out of London called Osibisa.  They play some terrific music which (to me) was kind of a transition between Earth, Wind And Fire and Ladysmith Black Mambazo – not American R&B, not Caribbean Reggae, but also not African, but kind of a blend between all three.  The interesting thing is they ARE African – they just don’t sound it as much (to me) as Ladysmith.  To side track to a short story about a small world, when I was living in Liverpool I had a friend who had lived in South Africa for several years.  One night he and his family were over for a BBQ and I asked him if he liked this African “sound”, and I played him this song.  He said, “Wow, that sounds just like Osibisa!”  I said it was and he added he’d actually seen them perform in London on one of his trips back and forth to South Africa.  He found it very amusing that an American was playing an LP brought from the US, made by an African group based in London, to a Scouser (a person from Liverpool) who had actually seen the group perform live.  It really is a small world after all!!
The second song lyrics added is an old classic (from 1968): “Honey“, and was sung by Bobbie Goldsboro.  It’s an incredibly sappy song about simple love and loss (death), but I really liked it back then and still do today.  I’ve been told it has been nominated as one of the worst songs of all time.  Anyone who thinks so hasn’t heard much music or at least not as much of the terribly bad music I’ve heard in the last 50+ years.  Sappy, yes.  Tear-jerker, definitely.  But worst songs of all time – sorry, not even close.  I encourage you all to go to YouTube and listen to it yourself.  (I will apologize in advance for Bobbie’s hairdo which is more dated than the song.)
As usual, read the lyrics for both, think about the words and meaning, go to YouTube, and enjoy!!!
Feeling better today, I finished my latest book: “Against the Gods: The Remarkable Story Of Risk“, written by Peter L. Bernstein (1998©).  The book is basically a history of the theories of math, statistics, probability and risk.  The book covers about 3,000 years of history and does it an interesting and enjoyable read.  The last chapters of the book deal with the concepts of derivatives and modern financial risk management tools.  Because the book is now dated – over 10 years old – it doesn’t have chance to explain the two most recent bubble-bursts –  the web collapse or the housing / credit meltdown of the 2000’s.  Interestingly enough, though, I felt as if the author did try to forecast their shadows with some of his comments in the final chapter.
As someone who has only a little prior background in this field, I found the book enjoyable and enlightening and I highly recommend it.
Oh, yeah.  This was another of the twelve books I was going to take with me to Baltimore to read during my 120 day detail.
.

Read Full Post »

%d bloggers like this: