There’s an article in yesterday’s NYTimes about how risk models as used by finance companies fail to account for human behavior. It’s nothing new, but it’s worth a read, especially because it includes a quote that should go up on every investor and business-owner’s wall:
If you are making a high return, I guarantee you there is a high risk there, even if you can’t see it.
— Richard R. Lindsey, president, Callcott Group