Complicated Watches

*/By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc./*

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Just finished reading one of those luxury magazines that you always find in
Airport lounges.  As usual there were lots of advertisements for
uber-expensive and uber-complicated watches.  I have to admit that I find
the technology behind these watches fascinating and the watches themselves a
marvel of engineering and craftsmanship.  However in this day and age do you
need a watch that tells you the moon cycle, has an anti-gravity correction
and one that tells you the day of the week?  I suspect that if you need a
watch to know what the day of the week is then you are not likely to be
bright enough to command enough of a salary to be able to afford such a
watch. 

The watches are fantastic engineering, but the bells and whistles have
virtually no practicality – the typical $300 smartphone can do a lot more
and do it a lot more efficiently.  In many cases though complicated watches
remind me of the risk management systems that many companies have – lots of
exotic complications, but subpar practical performance compared to simpler
more practical systems.  The same goes for techniques.

If the goal of a watch is to tell time then a $50 watch will do that for you
just fine.  However I realize that virtually everyone who buys and wears (as
opposed to buying them for a collection or as an investment) a watch that has
a cost in six figures is trying to make a statement. 

Is your risk management system for show, an attempt to make a statement? 
Does it have lots of bells and whistles, providing output that the typical
manager should understand in any case – the equivalent of a watch telling
the wearer the day of the week?  Or is your risk management system more
focused on the actual task at hand?


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