Seeing Tomorrow: Rewriting the Rules of Risk
In high-stakes investing and business, success or failure largely depends on how well you play the game of risk-a game in which the rules of competition are constantly being rewritten. Strategies that proved effective in the past are no longer enough to win today. The key to success is not to rely on yesterday's news, but to peer into the future and ask what could happen tomorrow.
Presenting a bold new way of thinking about risk, in Seeing Tomorrow Ron Dembo and Andrew Freeman offer a dynamic framework designed to enhance our ability to make important decisions, and consequently change how we manage our investments. By incorporating investors' individual circumstances and tolerances -as well as the unique reasoning behind their decision making-this innovative approach captures much more of how we actually think about risk.
From the basic building blocks required for forward-looking risk management, Dembo and Freeman define and explore the roles and significance of such fundamentals as time horizons, risk measures, benchmarks, and scenarios. Once the foundation is laid, these elements are used to construct a solid architecture for risk management and risk-adjusted analysis that is not only general enough to be able to handle a multitude of risks, but also able to present many different measures of risk.
With clear-cut explanations and intriguing real-world examples, Seeing Tomorrow leads you step by step through the authors' groundbreaking risk rules. These include: choosing an appropriate time horizon, selecting scenarios, computing Value at Risk (VAR), assessing both the upside and downside of a potential deal, calculating Regret, and compiling a reliable Regret matrix. By combining Regret, Upside, and a measure of our tolerance for risk, the authors demonstrate how these components create a powerful new way of approaching decisions. They offer guidance on very specific real life problems-such as buying a house or suing someone-as well as on broad matters of strategy and investing.
Written by two leading authorities in the field, Seeing Tomorrow is a milestone addition to risk literature that will dramatically alter the way you view, identify, and manage risk.
It is must reading for investors and decision makers alike.
"Seeing Tomorrow is a powerhouse in the understanding of risk. With their ingenious blend of psychology and rigorous quantitative analysis, the authors have created an authoritative and innovative handbook of risk management that is essential for both practitioners and theoreticians." -Peter L. Bernstein author, Against the Gods and Capital Ideas.
"This excellent and readable book provides an innovative approach to choosing actions when the outcomes are uncertain. Anyone with an interest in improving their decision-making skills would benefit from reading this. Anyone with a professional interest in risk management must read it." -Stephen A. Ross Fischer Black Visiting Professor of Finance Massachusetts Institute of Technology Sloan School of Management Sterling Professor of Economics and Finance, Yale University.
"Ron Dembo and Andrew Freeman have done an excellent job of describing how to think about and measure risk. This will become required reading for businesses and personal investment executives." -Ned C. Lautenbach.
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Chapter 1 HOW TO THINK ABOUT RISK
Chapter 2 THE ELEMENTS OF RISK MANAGEMENT
Chapter 3 OF DECISIONS AND RISK
Chapter 4 SWEET REGRET
Chapter 5 KEEPING UP WITH THE JONESES
Chapter 6 PAYING FOR PLAYING
Chapter 7 THE RAP TRAP AND EVALUATIONS
Otras ediciones - Ver todo
Seeing Tomorrow: Weighing Financial Risk in Everyday Life
Ron Dembo,Andrew Freeman
Vista de fragmentos - 1998
20 percent chance arbitrage assets assume average bank’s Bankers Trust banks behavior behavioral economists benchmark Beta better buyer calculate capital cash Chapter choice choose cost deal decision Dilbert downside risk earn economic economists effect equity event example exposure face feel Figure firm firm’s forward-looking framework fund managers fund’s future gain George Soros happen horizon house prices huge idea implied views instance interest rates investment investors lambda less look lose loss lottery measure of risk Microsoft million mutual funds NOPAT offer optimal options outcomes partners Paul Reichmann payoffs people’s performance portfolio positive possible potential probability problem profits put option Reichmanns relative risk averse risk management risk measures risk-adjusted value risky Robert Citron scenarios sell shareholders shares simple South African Breweries things ticket tion today’s trade Upside and Regret volatility win–win
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