You cant leave investing to luck or some act of randomness (like a monte carlo simulation)
But then, every investment carries with it risk and they are like the two sides of the same coin
There are various risks to be ascertained and managed; welcome tools and risk metrics
Risks cant be viewed in silos (not particle physics), instead its viewed as an interplay of risks (chemistry)
Oh wait, then there is interrelationship between various instruments; hello options and swaps
In this dynamic world, actionable insights take avtar thru stress testing, scenario analysis and VaR.
After all this, something occurs, something arrives that was not seen all through…
Yes, like a divine intervention: something that can’t be quantified but has taken shape thru experience and wisdom.
INTUITION: that’s the artistic expression of risk management
65-70% decisions are emotion based investing!