Founder & Risk Management Analyst for Vault Assets. Head of Risk Management Department for Nucleoeléctrica Argentina S.A.
#Risk #GOLD #SP500 #USBonds Risk exists: "The truth is, risk tolerance is antithetical to successful investing. When people aren’t afraid of risk, they’ll accept risk without being compensated for doing so . . . and risk compensation will disappear. This is a simple and inevitable relationship. When investors are unworried and risk-tolerant, they buy stocks at high price/earnings ratios and private companies at high multiples of EBITDA (cash flow, defined as earnings before interest, taxes, depreciation and amortization), and they pile into bonds despite narrow yield spreads and into real estate at minimal “cap rates” (the ratio of net operating income to price). There are few things as risky as the widespread belief that there’s no risk, because it’s only when investors are suitably risk averse that prospective returns will incorporate appropriate risk premiums. Hopefully in the future (a) investors will remember to fear risk and demand risk premiums and (b) we’ll continue to be alert for times when they don’t." Howard Marks - “So Much That’s False and Nutty,” July 8, 2009 The widespread belief is that risk is low and investments will produce profits, the herd is intoxicated and instead of showing caution, it’s obsessed with the risk of missing the opportunity.
