Comments for GlynHolton.com http://glynholton.com A Blog About Risk Tue, 15 Nov 2011 20:31:32 +0000 hourly 1 http://wordpress.org/?v=3.2.1 Comment on Abolishing Corporate Personhood: Be Careful What You Ask For. by jack ucciferri http://glynholton.com/2011/10/abolishing-corporate-personhood-be-careful-what-you-ask-for/#comment-238 jack ucciferri Tue, 15 Nov 2011 20:31:32 +0000 http://glynholton.contingencyanalysis.com/?p=1314#comment-238 Glyn you've done it again. Just like you did with your paper back in 2006, you've identified a key set of issues and proposed a novel solution. Thank you and I'll be in touch. Glyn you’ve done it again.

Just like you did with your paper back in 2006, you’ve identified a key set of issues and proposed a novel solution.

Thank you and I’ll be in touch.

]]> Comment on I’ll Be Gone. You’ll Be Gone. by Online brokers | My 2 cents tips http://glynholton.com/2007/01/ill-be-gone-youll-be-gone/#comment-195 Online brokers | My 2 cents tips Mon, 10 Oct 2011 14:04:36 +0000 http://glynholton.wordpress.com/?p=47#comment-195 [...] papers by Glyn Holton showed my a new way of thinking about my own mistrust in banks, funds, insurers & co. I [...] [...] papers by Glyn Holton showed my a new way of thinking about my own mistrust in banks, funds, insurers & co. I [...]

]]> Comment on The Case for Incoherence by Kwak Axe http://glynholton.com/2008/09/the-case-for-incoherence/#comment-116 Kwak Axe Sat, 18 Jun 2011 07:01:47 +0000 http://glynholton.wordpress.com/?p=102#comment-116 There is an old Indian proverb that goes like... "do not mix your curry and rice [until before you eat]". If the curry spoils while the rice does not, at least one has the rice. And vice-versa. But if they are mixed and one of them spoils, the other has to be discarded too. Which is a case of sub-additivity not holding. There is an old Indian proverb that goes like… “do not mix your curry and rice [until before you eat]“. If the curry spoils while the rice does not, at least one has the rice. And vice-versa. But if they are mixed and one of them spoils, the other has to be discarded too. Which is a case of sub-additivity not holding.

]]> Comment on CEO Pay at Fannie Mae and Freddie Mac by Claire F http://glynholton.com/2011/04/ceo-pay-at-fannie-mae-and-freddie-mac/#comment-123 Claire F Sun, 15 May 2011 20:48:18 +0000 http://glynholton.com/?p=869#comment-123 There are a couple of different approaches here: 1) Educate more individuals as investors so we become a larger proportion of stock owners in all companies; at that point we can chose to sell the stock in the companies that pay their execs more than we think is wise 2) Propose laws that require that mutual funds to pass on voting rights to mutual fund holders. This could be an accounting nightmare but if it were given to fundholders of record that had a) held the fund for at least one year and b) passed on voting rights for companies in the holdings that represent 10% of fund holdings. Fundholders could chose to pass that responsibility to the directors but would not have to. There are a couple of different approaches here:
1) Educate more individuals as investors so we become a larger proportion of stock owners in all companies; at that point we can chose to sell the stock in the companies that pay their execs more than we think is wise

2) Propose laws that require that mutual funds to pass on voting rights to mutual fund holders. This could be an accounting nightmare but if it were given to fundholders of record that had a) held the fund for at least one year and b) passed on voting rights for companies in the holdings that represent 10% of fund holdings. Fundholders could chose to pass that responsibility to the directors but would not have to.

]]> Comment on Stress Testing: A Reminder from Fukushima by Glyn A. Holton http://glynholton.com/2011/03/stress-testing-a-reminder-from-fukushima/#comment-122 Glyn A. Holton Thu, 21 Apr 2011 11:58:38 +0000 http://glynholton.com/?p=583#comment-122 First of all, let me say I am sorry for what your family, and all families impacted by this tragedy, are going through. Yours is a classic problem of decision making in the face of uncertainty. You don't have all the "facts", and there are potentially significant consequences. Having family members stay with you is the safe course. Its downside — predictable inconvenience for you and those family members — is known. The alternative entails the potentially staggering consequence of radiation poisoning of family members. If you believe there is a material likelihood of that outcome, you should do everything you can to help family members leave the affected area. How do you assess the likelihood of that outcome? You are not a nuclear physicist or a government official (I presume) with privileged information about conditions near the plant. You can, however, consider what the eventual outcomes were of other nuclear accidents — especially Three Mile Island and Chernobyl. You can also consider your impression of how reliable assurances of the Japanese Government are. The goal of such assessments is not to figure out what is going to happen. That is impossible. It is to assess whether you think there is a material likelihood of family members' health being impacted. If I were in your shoes, I would strongly encourage family members to stay with me. I would even mail them airline tickets. First of all, let me say I am sorry for what your family, and all families impacted by this tragedy, are going through.

Yours is a classic problem of decision making in the face of uncertainty. You don’t have all the “facts”, and there are potentially significant consequences. Having family members stay with you is the safe course. Its downside — predictable inconvenience for you and those family members — is known. The alternative entails the potentially staggering consequence of radiation poisoning of family members. If you believe there is a material likelihood of that outcome, you should do everything you can to help family members leave the affected area.

How do you assess the likelihood of that outcome? You are not a nuclear physicist or a government official (I presume) with privileged information about conditions near the plant. You can, however, consider what the eventual outcomes were of other nuclear accidents — especially Three Mile Island and Chernobyl. You can also consider your impression of how reliable assurances of the Japanese Government are. The goal of such assessments is not to figure out what is going to happen. That is impossible. It is to assess whether you think there is a material likelihood of family members’ health being impacted.

If I were in your shoes, I would strongly encourage family members to stay with me. I would even mail them airline tickets.

]]> Comment on Stress Testing: A Reminder from Fukushima by Debbi Mase http://glynholton.com/2011/03/stress-testing-a-reminder-from-fukushima/#comment-121 Debbi Mase Thu, 21 Apr 2011 08:14:55 +0000 http://glynholton.com/?p=583#comment-121 My family members live in Fukushima. I'm really concerned about the problem and also about their health. After all, we do not understand the repercussions of the radiations's magnitude on their health, they might get particularly sick!!! Do you reckon I should ask them to come and live together with me? My family members live in Fukushima. I’m really concerned about the problem and also about their health. After all, we do not understand the repercussions of the radiations’s magnitude on their health, they might get particularly sick!!! Do you reckon I should ask them to come and live together with me?

]]> Comment on Upside Risk, Downside Risk by Holger Hassenpflug http://glynholton.com/2011/03/upside-risk-downside-risk/#comment-120 Holger Hassenpflug Wed, 13 Apr 2011 11:00:20 +0000 http://glynholton.com/?p=459#comment-120 I just stumbled across your interesting site while looking for a translation into German of "upside risk" (there doesn't seem to be any). With regard to your conclusion above I agree absolutely. I think that possibly I experience the kind of "superfluous" logic (to put it mildly) you describe above when risk owners attempt to argue that the taking/fixing of an opportunity that presents itself actually entails aditional risk since there could possibly have been even better outcomes if they hadn't taken it. I.e. they might not want to close a position with a P&L of 10% since they see the risk that it could have turned out at 15% and that they will be judged by that. Now, I stand by my view that if you close a position (be it financial or a project or a business strategy or whatever else carries risk) you have no more exposure and therefore no more risk (or chance) by definition. The way I see it, by closing positions/exposures you turn the whole distribution of future risks and chances in to current P&L and it is warped thinking that sees an absolute downside risk ,instead of the obviosly inherent relative downside risk, in that. Anyway, thanks for putting your thoughts on this topic up on the web and for getting me to think about it again. best regards, Holger I just stumbled across your interesting site while looking for a translation into German of “upside risk” (there doesn’t seem to be any).
With regard to your conclusion above I agree absolutely. I think that possibly I experience the kind of “superfluous” logic (to put it mildly) you describe above when risk owners attempt to argue that the taking/fixing of an opportunity that presents itself actually entails aditional risk since there could possibly have been even better outcomes if they hadn’t taken it. I.e. they might not want to close a position with a P&L of 10% since they see the risk that it could have turned out at 15% and that they will be judged by that.
Now, I stand by my view that if you close a position (be it financial or a project or a business strategy or whatever else carries risk) you have no more exposure and therefore no more risk (or chance) by definition. The way I see it, by closing positions/exposures you turn the whole distribution of future risks and chances in to current P&L and it is warped thinking that sees an absolute downside risk ,instead of the obviosly inherent relative downside risk, in that.

Anyway, thanks for putting your thoughts on this topic up on the web and for getting me to think about it again.

best regards,

Holger

]]> Comment on More Questions Than Answers by Andrew Brown, FRM http://glynholton.com/2007/07/more-questions-than-answers/#comment-59 Andrew Brown, FRM Tue, 15 Feb 2011 21:09:07 +0000 http://glynholton.wordpress.com/?p=56#comment-59 I would like to echo what others have said about your book. Second hand copies typically command upwards of £250 on amazon.co.uk and there are several copies offered at over $300 on amazon.com. I am sure that if a publisher released a new edition - or even a reprint - that there would be ample demand. I managed to borrow a copy on inter-library loan from the British Library and subsequently I recently managed to buy a copy at $119 from amazon.com, which is the cheapest I've seen it offered in 3 years of watching. I would like to echo what others have said about your book. Second hand copies typically command upwards of £250 on amazon.co.uk and there are several copies offered at over $300 on amazon.com. I am sure that if a publisher released a new edition – or even a reprint – that there would be ample demand. I managed to borrow a copy on inter-library loan from the British Library and subsequently I recently managed to buy a copy at $119 from amazon.com, which is the cheapest I’ve seen it offered in 3 years of watching.

]]> Comment on Don’t Blame the Modelers by Mike Coulten http://glynholton.com/2008/10/dont-blame-the-modelers/#comment-119 Mike Coulten Wed, 01 Apr 2009 18:02:49 +0000 http://glynholton.wordpress.com/?p=110#comment-119 Models are for moderistan where we spend most of our lives making modest returns. Credit cruches are from extremistan and are by definition out of sample. Why would you not use a model most of the time? Why would you expect a model to protect you all the time? You wouldnt expect a parking sensor to protect you from being hit from behind by a speeding truck. btw, I think your book is great. I have built many commercial risk models using it as one reference. A client just told me it sells at $900 today. Models are for moderistan where we spend most of our lives making modest returns. Credit cruches are from extremistan and are by definition out of sample. Why would you not use a model most of the time? Why would you expect a model to protect you all the time? You wouldnt expect a parking sensor to protect you from being hit from behind by a speeding truck. btw, I think your book is great. I have built many commercial risk models using it as one reference. A client just told me it sells at $900 today.

]]> Comment on Don’t Blame the Modelers by FX http://glynholton.com/2008/10/dont-blame-the-modelers/#comment-118 FX Thu, 05 Feb 2009 18:26:00 +0000 http://glynholton.wordpress.com/?p=110#comment-118 You can be sure there are quite a few more JP Morgans out there. As a CPA and former CFO if I did not want the auditors to know something, guess what they never found anything I did not want them to find. You can be sure there are quite a few more JP Morgans out there. As a CPA and former CFO if I did not want the auditors to know something, guess what they never found anything I did not want them to find.

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