Selecting Strategy
When there is no uncertainty the maximum return criterion can be used to rank strategies. With uncertainty we have to look for the strategy that maximizes the firms expected utility.
July, 2009
Two letters
Dear S@R, I am not interested in the use of stochastic models, and particularly Monte Carlo simulations. I believe that these approaches too often lead to underestimating risks of extreme events …
When in doubt, develop the situation
‘Developing the situation’ is the common-sense approach to dealing with complexity. Both as a method and a mind-set, it uses time and our minds to actively build context …