Banks err by confusing risk, uncertainty
Complex prediction models may have blinded financial institutions to looming meltdown
http://www.sciencenews.org/view/generic/id/345625/title/Banks_err_by_confusing_risk%2C_uncertainty
Annual forecasts of currency values from December 2001 to December 2010, which guided banks’ investment decisions, badly missed the mark nine out of 10 times…
Yet another case where extremely well compensated people are consistently wrong, yet suffer not one iota for being so. Just like no one has consistently beaten the tried and true ‘buy and hold‘ strategy for investing, it seems that expensive PhDs can’t value currencies either.
