Tag Archives: Credit Crunch

My post on the Reverse Robin Hood started a lengthy and interesting discussion – thanks to Andrew Oakley and Tom Ruffles for their comments. Part of the discussion came to revolve around the role of risk and unpredictable elements in people’s personal financial situations – and I must admit that I am woefully unqualified to comment upon this. Down in the City of London there are extremely highly paid analysts who sit all day fiddling with formulae to try and predict market fluctuations, and this country must have tens of thousands (at least) of highly trained and highly paid experts in exactly this area – underwriters. I have no idea how successful these methods are, but I’m assuming they must have some value. After all, if you know the outcomes of ten thousand decisions made previously, then maybe another 40 year male with a fairly academic past and many years freelancing and living without visible source of income becomes predictable. Sure, you might make errors in regard to individual outcomes, because you can never have all the data -and the same applies to market analysts – but you might hope that on average you would do well (– though as we shall shortly see, I am not actually convinced this is true!) Continue reading →