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Nouriel Roubini: Why Are Markets Ignoring The Black Swans?
Nothing really new here. It is simply Dr. Doom and Gloom being exactly that.
The article is a long, but still incomplete list, of what could go wrong in the world economy. It is incomplete in several ways because it is without an estimate of odds and without a projection of possible impacts. It is useless to guide investment decisions.
However, there is a plus to visiting the Link. At the end of the article, there is a reference to a book written by Frank Knight decades ago. Pressing that reference delivers a copy of that book titled "Risk, Uncertainty, and Profits". I did, but have not yet read the book. I just might do so in the near future.
Making decisions on what possibly might happen is a mistake, since virtually anything MIGHT happen. As MJG notes, without having some idea of what is very likely to happen, making investment decisions based on what-if is useless.
As David Snowball suggested, being able to determine what your own portfolio's maximum drawdown potential could be is a rather logical way to decide on any tweaks to your allocation. This should allow you to sleep at night. Worrying about all of the potential what-ifs is useless. You can do that if you wish, but it will not lead to rational investment decisions.
Anyone actually read Roubini's book? I attempted 4 times. It is so freakin' boring because like @BobC said, well, he is too nice to say it this way, it is DUMB.
We have penchant for phrases. Black Swan, Brexit, whatever. To make something sound grand to people keep talking about it.
Comments
Because markets are irrational. Next question?
Nothing really new here. It is simply Dr. Doom and Gloom being exactly that.
The article is a long, but still incomplete list, of what could go wrong in the world economy. It is incomplete in several ways because it is without an estimate of odds and without a projection of possible impacts. It is useless to guide investment decisions.
However, there is a plus to visiting the Link. At the end of the article, there is a reference to a book written by Frank Knight decades ago. Pressing that reference delivers a copy of that book titled "Risk, Uncertainty, and Profits". I did, but have not yet read the book. I just might do so in the near future.
Best Wishes
As David Snowball suggested, being able to determine what your own portfolio's maximum drawdown potential could be is a rather logical way to decide on any tweaks to your allocation. This should allow you to sleep at night. Worrying about all of the potential what-ifs is useless. You can do that if you wish, but it will not lead to rational investment decisions.
We have penchant for phrases. Black Swan, Brexit, whatever. To make something sound grand to people keep talking about it.