Risk comes from not knowing what you're doing.
One of the responsibilities faced by the Environmental Genome Project is to provide the science base upon which society can make better informed risk management decisions.
There is no doubt that Formula 1 has the best risk management of any sport and any industry in the world.
As population susceptibilities are better understood, we will be in a better position than we are in today to make informed decisions about risk management.
Test fast, fail fast, adjust fast.
There are those who are so scrupulously afraid of doing wrong that they seldom venture to do anything.
Businesses can be opaque. They are complex. You don't know how aircraft engines work either.
As I write in 2012 we certainly do not believe that it is over yet, and the worst may be yet to come. Efforts by governments to solve the underlying problems responsible for the crisis have still not gotten very far, and the 'stress tests' that governments have used to encourage optimism about our financial institutions were of questionable thoroughness.
Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
Outperforming the market with low volatility on a consistent basis is an impossibility. I outperformed the market for 30-odd years, but not with low volatility.
Risk models only have value if they are used effectively in combination with a limit management and control process.
It seems to be a law of nature, inflexible and inexorable, that those who will not risk cannot win.
Maybe we should teach schoolchildren probability theory and investment risk management.
We gauge risk literally hundreds of times per day, usually well and often subconsciously. We start assessing risk before the disaster even happens. We are doing is right now. We decide where to live and what kind of insurance to buy, just like we process all kinds of everyday risks: we wear bike helmets, or not. We buckle our seatbelts, smoke cigarettes, and let our kids stay out until midnight. Or not.
The key to risk management is never putting yourself in a position where you cannot live to fight another day.
What went wrong is we had tremendous concentration in the sense we put a lot of our money to work against U.S. real estate. We got here by lending money, and putting money to work in the U.S. real estate market, in a size that was probably larger than what we ought to have done on a diversification basis.
The technical explanation is that the market-sensitive risk models used by thousands of market participants work on the assumption that each user is the only person using them.
If you don't invest in risk management, it doesn't matter what business you're in, it's a risky business.
The kinds of errors that cause plane crashes are invariably errors of teamwork and communication.
Thoughtfully assessing and addressing enterprise risk and placing a high value on corporate transparency can protect the one thing we cannot afford to lose: trust.
or simply:
