Today, LTCM principals alerts audiences that “it makes sense to be transparent” and that trades should be paired now to control risk. But, when it counted, LTCM was not doing this, especially with regards to those lethal Russian bonds.
Risk management is critical. You have to be able to manage in the bad days as well as good days. Market fact of life. You can run, but you can’t hide in today’s supersonic internet world. The average share in this country is held for 22 seconds.
Wonderful mathematical models are amazing, but real safe & sound new financial products that control risk are even better. In today’s world intuition and curiosity trump models of any style or sort computer created or human. A person’s pedigree is far less important then their criterion behavior. What they actually bring to the table, not their zip code of origin or where their father went to college.
Financial villains together with incompetent regulators and auditors can create enough information to restore the damage wrought. The Street continues to work on these issues diligently.
It is through self-reflection and an honest insistence on objectivity, diligence, and integrity of decision-making that the individual has the higher likelihood of avoiding becoming embroiled in (or synonymous with) a disaster.