Reducing Risk Through Time Diversification

Reducing Risk Through Time Diversification

Link: Barry Nalebuff – Reducing Risk Through Time Diversification

This video supports the prudent and “conservative” use of leverage. The subject is hotly contested any time the financial markets become choppy and 2008 was a storm. I think everyone needs to make their own assessment of what tools to apply but having said that, new regulation is effectivly regulating the flow of leveraged investing by providing higher hurdles for investors. A crisis will always present a clear invitation for regulators to step forward, as their presence is seen as a stabilising force when uncertainty rules the day.

The question of risk is best answered by knowing what you are buying and what are you being asked to pay.

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