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Rich and Co.

“Severe Losses Occur More Frequently than Expected”

“Severe Losses Occur More Frequently than Expected
The smart guys at Welton Investment Corporation have studied the phenomenon of tail risk in depth and kindly allowed me to re-produce the table below which sums up the challenge facing investors. In short, severe losses (defined as 20% or more) happen about 5 times more frequently than estimated by the models we (well, most of us) use.”

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Written by Rich and Co.

April 5, 2011 at 6:17 pm

Posted in Uncategorized

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