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What, me worry? (1)
September 30, 2005 | Globe & Mail | by Doug Steiner.
Tsunamis, asteroids, central bankers - how do you protect one portfolio
against all those risks? Systemic versus personal risk.

"Unfortunately, risk is rarely that clear cut. It comes in many forms, and we all think of it in different ways. Many of us have trouble putting risks into appropriate categories. We often mash all of them together or worry too much about spectacular calamities. To get a handle on things, you need to create a proper hierarchy of anxieties and then deal with them in an orderly fashion.

Many academics split risks into two buckets. Systemic risk is general risk--risk that affects large groups of people, such as the stock market crashing or a hurricane wiping out a city. Personal risk relates to individuals making choices, such as trying to balance on a balcony railing after downing three or four martinis."
Doug_Steiner  category_errors  risk-assessment  systemic_risks  personal_risk  insurance  panics  natural_calamities  risk-mitigation  risks  disasters 
march 2009 by jerryking
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