tinscale

The Meaning of Risk: A Proprietary Index for Current Times

Good observation and expression of what I've been feeling. Cash is risky but everything else is more so at the moment.

On Sep 29 09:36 AM yada yada wrote:

> i think that in the current environment, the concept of "risk" requires
> a complete re-definition that takes into account the fact that currency,
> the "asset" that "risk" is conventionally baselined against with
> a nominal risk of zero, is no longer being seen or treated as such.
>
>
> in the current global economic environment, fiat currency has become
> just another asset, and the value of currency itself is clearly "at
> risk" and being treated by many as a potentially risky asset.
>
> in the past, you could talk about the purchase of equities as a "risk-taking"
> activity. implicit in that description is the idea that leaving capital
> in currency/cash was the "risk-free" alternative to the more risky
> purchase of equities. and all kinds of measures of risk and strategies
> to mitigate risk have evolved, all based on the implicit or explicit
> assumption that cash has a risk of zero.
>
> i don't know about you, but i am currently just as concerned about
> my cash position as i am about any of my equity, commodity, or real
> estate investments. to me, the cash feels every bit as risky as the
> equity investments. i doubt that i am alone in this, and i think
> that a lot of recent divergences in correlations that have held over
> time is at least partly due to this phenomenon of risk being re-defined,
> whether explicitly or implicitly.