A recent blog in Investment Week that mentioned the history of Monte Carlo simulation and its use in finance led me to take a harder look at what I thought I knew about how financial risk analysis was launched. I had long believed that Monte Carlo simulation was developed by a team working at Los …
Author Archives: Palisade
Shape Shifters
A recent blog for Discover magazine reports on robotics research in which the robots evolve, at least in the sense that they progressively change shape. The research by Josh Bongard, University of Vermont, tracks the metamorphosis of robot with a simple shape–in this case, the shape of a snake––to a more complex machine-animal shape––for Bongard’s …
Facts Are Not for Quantitative Sissies
Media reports on the global search for alternative and sustainable energy sources often dwell in the happy realms of possibility and leave me happily clinging to a cheerful bits of information they offer up––"if everyone over the age of 21 replaced on incandescent lightbulb with a fluorescent," and blah, blah––when was the last time you …
Playing the Game with the CSOs
There’s a new game out there for all of you in the game of risk management. "Take Charge: A Risk Simulation Game," developed by the Indian risk management services provider Aujas, debuted at a recent summit for CSOs––chief security officers, as opposed to chief strategic officers––in Bangalore. "Take Charge" is a team sport that is …
Swallow Your Pride
Financial advisers took a hit from the 2008 meltdown of the markets. Many investors, finding fault with their advisers’ lack of prescience or actual handling of their investments during the crisis, decided they could do just as well managing their own investments––and they ditched their advisory firms. So far their results probably haven’t been …
The Flash Crash
Last May 6, the Dow Jones Industrial Average made a rapid series of inexplicable drops, and, in fact, in one five-minute period fell more than 500 points. Then, just as inexplicably, the market recovered. The causes of the so-called Flash Crash remained mysterious until September, when the SEC issued a report on the rapid fluctuation …
Two Shapes of Bond Risk
Baby Boomers are coming face to face with the realities of retirement, and their financial advisers are having to dig deep to come up with strategies that will calm their fears of a recurrence of the financial meltdown of 2008. In this climate, one term that comes up repeatedly is fixed income, which usually means …
The Number and Its Evils
In elementary school arithmetic, most of us who want to do well struggle to come up with the correct answer to that problem posted on the blackboard. Unfortunately, that’s the way many grown-up decision makers approach risk management. At a recent Palisade Users Conference, v.p. Randy Heffernan offered up some fun and insightful comments about …
Long Odds, Big Payout
A recent chat with Palisade customer Vertex Pharmaceuticals reinforced something I learned a few years ago when I was working with a biotechnology start-up: the development of a new drug begins with a bright idea and then enters a long, dark tunnel of uncertainty and risk. The odds that the idea will ever emerge in …
On Drugs and Harm in the UK
This week the BBC’s home editor, Mark Easton, reports on a new study examining the "harm" impacts of drugs in the UK, where there is ongoing debate about government drug policy and the issue of legalization. The study was a statistical analysis produced by the Independent Scientific Committee on Drugs, a group of scientists who …
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