Archive | Cautionary Tales

Fooled By Black Swans

Imagine you are presenting to the board about risk management. The presentation is going well, and you are about to finish up when a board […]

Exhibit 1: Histogram of reported monthly hedge fund returns that happen to fall close to zero. Each bucket spans 19 basis points. Source: Detail from an exhibit in the Bollen and Pool working paper.

Benford’s Law

Benford’s Law is a fascinating theorem from statistics that states, for most forms of data, the leading digits of numbers are not uniformly distributed among […]

Readers of this blog know that the hedge fund industry is little more than a trillion dollar bait-and-switch scheme.

Played On The Street

A free nation, not to mention free markets, depend on a free, independent press. How can voters make wise decisions—or investors allocate assets prudently—if the […]

More Questions Than Answers

For the past four years, I have been living with a mystery—a real-life mystery about some things that weren’t supposed to happen but did anyway. […]

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