The Trillion Dollar Equation

[Joe Leote]

This interesting Veritasium video is about the application of math models to financial risk:

https://youtu.be/A5w-dEgIU1M

I have not finished the video yet. I may post some comments when I do.

Joe

[WilliamM]

Can argue the medallion fund being started in 82 is great timing to catch secular down trend in rates we have been enjoying until recently.  Perhaps they are another LTCM with slightly better risk management.

[Joe Leote]

Could be but I don't know enough about how Medallion fund fits with the macro trends. Warren Buffet says his portfolio had a 50% or more drawdown more than four times over the long run and he admits that the Federal bailout of the financial system in 2008 kept the blood out of the streets. This means Buffet knows how to shift the risk of free market loss to the public management of the macro economy but then so does everyone else who would otherwise be on the wrong side of a financial crisis benefit from public cash flow insurance keeping asset prices from falling off a cliff in a credit crisis.

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