by Rick Nason, PhD, CFA
Partner, RSD Solutions Inc
Cats are intended to teach us that not everything in nature has a function
Garrison Keillor
My Golden has a strict mathematical function: Food = Attention. My wife’s cats (notice that I specifically label it as “not my cat”) are completely random in their behavior. They have no function, mathematical or otherwise. (Fortunately my wife does not read my blogs.)
In risk management we like to put mathematical functions on things (distributions for the more educationally advanced). However risk events tend to be more like cats than Golden Retrievers.
Risk events show us time and again that “Risks are intended to teach us that not everything in nature has a function”.
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