Finding Investment Strategies Under Risk And Uncertainty
Systematic and discretionary investment strategies alike are game plans, which should perform under risk, i.e. quantifiable outcomes of “known unknowns”, and under uncertainty, i.e. unquantifiable “unknown unknowns”. Investment strategies must capitalize on actionable new information while tolerating information noise and market volatility. In this short article, I review some foremost insights about risk, uncertainty, and strategies’ edge from wonderful books by Ed Thorp, Aaron Brown, and Michael Mauboussin.
