I'm am completely sick of hearing he saw it coming...nothing about this individual in particular bothers me, but we hear this refrain all too frequently after outlier events. Making proclamations that unlikely disasters will happen is easy because, well, talk is cheap.
Making piles of money (John Paulson, anyone?) doesn't even prove the point, but it's a step in the right direction. At least he placed the bet. Betting that disasters will happen when the bets are cheap takes skill to price, luck to get right, and errors don't come cheap.
The problem remains, however. If we're talking about rare events, we can't see enough to differentiate luck from skill. How long do we need to watch an investor to see if he can accurately predict one in fifty year events? In financial markets, were correlations run very high, the answer, sadly, is a long, long time.
Where does that leave the academic in the SEC? Sadly, I suspect ignored, with no authority, and a somewhat bigger audience than I have...but he won't be as entertaining!
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