Blogging the Bookshelf

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“Measuring Risk – The Big Short: Inside the Doomsday Machine” – Michael Lewis

July 28th, 2011 · No Comments · Economics, Policy

He gave a talk in which he argued that the way they measured risk was completely idiotic. They measured risk by volatility: how much a stock or bond happened to have jumped around in the past few years. Real risk was not volatility; real risk was stupid investment decisions.

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