assumptions – Karthik Shashidhar

arbit, business, fundaes, work assumption, assumptions, attention deficit, bets, big picture, corporate ladder, corporations, digits, financial crisis, hyperactivity, hypothesis, initial reading, micromanage, middle management, mortgage market, orthogonal, promotion procedures, shortcoming, top management, zillion

Big Management and Big Picture

June 18, 2011

One common shortcoming that top management in a lot of companies is accused of is that they give too much attention to details (i.e. sometimes they micromanage), and they are unable to see the big picture. For example, if you think about the financial crisis of 2007-08, people kept making stupid bets about the mortgage…

arbit, business, work assumptions, bureaucratic hassles, choices, class participation, fundamental difference, inertia, priors, scrutiny, switching costs, trivial change

Priors and posteriors

March 30, 2011

There is a fundamental difference between version 1.0 of any thing and any subsequent version. In the version 1.0, you usually don’t need to give any reasons for your choices. The focus in that case would be in getting the version ready, and you can get away with whatever assumptions you want to feel like.…

business, finance, investment banking, randomness, work accuracy, assumptions, behavour, best efforts, business week, comprehension, disrepute, economy, elegance, emanuel derman, fellow, finance, financial crisis, lookout, mathematics, model makers, paul wilmott, profession, quantitative models, quants

Addition to the Model Makers Oath

March 22, 2011

Paul Wilmott and Emanuel Derman, in an article in Business Week a couple of years back (at the height of the financial crisis) came up with a model-makers oath. It goes: • I will remember that I didn’t make the world and that it doesn’t satisfy my equations. • Though I will use models boldly…