So I went to a conference last week in Dallas where financial advisors from around the region gathered to discuss strategies for "High Performing Firms". I was NOT enthusiastic about being there until Ren Cheng, PhD gave a kooky professor presentation on Systemic Risk.
I LOVED the guy. We had a chance to talk one on one for several hours about what the implications are of his observations. At one point this older Asian guy literally hugged me and closed out our conversation by saying--"I'm so glad other people are thinking about this stuff."
Basically he is suggesting that since year 2000 markets have become interconnected and therefore "normal" distributions of returns are unlikely going forward. Watch the videos attached.
The metronomes demonstrate what happens to "independent" non-human systems when they become connected.
Metronomes
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