The following excerpt comes from the essay "Investing in the Unknown and Unknowable" by Richard Zeckhauser, an American economist who has built his academic career around the study of risk management, decision sciences, investment, and policy-making under uncertainty. An Alternative View on Risk "From David Ricardo making a fortune buying British government bonds on the … Continue reading Investing in the Unknown and Unknowable by Richard Zeckhauser
Tag: uncertainty
Nugget: Pabrai on risk and uncertainty
There is a quite interesting interview with Monish Pabrai on Forbes online, in which is talks, amongst other topics, about the entreperneurial approach to risk and uncertainty. I very much share is views as there is a vital difference between risk and uncertainty. Here is an excerpt from the interview: Forbes: "Does this tie into … Continue reading Nugget: Pabrai on risk and uncertainty
Nugget: Damodaran on simulations, sensitivity analysis and decision trees
Damodaran on probabilistic approaches to risk assessments in finance: • In the most extreme form of scenario analysis, you look at the value in the best case and worst case scenarios and contrast them with the expected value. In its more general form, you estimate the value under a small number of likely scenarios, ranging … Continue reading Nugget: Damodaran on simulations, sensitivity analysis and decision trees