On War and Risk Perception

July 18, 2014 5:17 AM

This from Josh Brown

The notion that there is more uncertainty now than there was last month because of a plane being shot down in the Ukraine or an Israeli incursion into Gaza is both childish and ahistorical. Just because we choose not to be concerned with uncertainty at a given moment – like on September 10th, 2001 for example – that doesn’t mean an outbreak of violence or hostility is any less likely to occur.

and this…

Each time is different, by definition every one of these episodes brings with it a set of variables and unique dynamics that no investor has a readymade answer for in advance. Models, frameworks, heuristics and rules of thumb will be totally useless here. Awareness of this digestive process, on the other hand, will be priceless.

from the must read - How Geopolitical Threats Affect the Stock Market

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