http://www.bloomberg.com/news/articles/2016-01-25/so-yes-the-oil-crash-looks-a-lot-like-subprime
The similarities are really eerie. Miscalculation of 'value' coupled with a rapid expansion of credit. Everyone chasing higher returns even when it's known the asset is overvalued. I love this stuff - it keeps me in money.
Determining what 'risk' is cannot be underestimated. Too many times folks fool themselves into thinking just because a mathematical model says risk = 0 doesn't make it so. There is always going to be risk.
The similarities are really eerie. Miscalculation of 'value' coupled with a rapid expansion of credit. Everyone chasing higher returns even when it's known the asset is overvalued. I love this stuff - it keeps me in money.
Determining what 'risk' is cannot be underestimated. Too many times folks fool themselves into thinking just because a mathematical model says risk = 0 doesn't make it so. There is always going to be risk.
