Monday, March 07, 2016

Mike Tyson On Robusterian Quantitative Analysis, Capital Planning And Stress Testing...

Iraq/Afghan, Healthcare, 
Fan/Fred, Katrina,
 TBTF, QE3, RBC1...
Sir Lawrence Freedman has a new book out called "Strategy:  A History" which was recently reviewed in the Financial Times.  The review uses the following quote from "bad-to-the-bone" boxer Mike Tyson  to sum up the core insight from the book - "Everyone has a plan 'till they get punched in the mouth."

There might be an important word of caution, perhaps even of enlightenment, in Mr. Tyson's "realest of real worlds" wisdom for all our "robustly" faithful, Monday morning quarter-backs - those in-the-end, unaccountable armchair strategists. 

Here's the gist of the review...

The Black Swan
of realism...
"Strategy is flexibility.  Any hard and fast plan of action is unlikely to survive first contact with the enemy, or unpredictable circumstances. A theater of war, like a market or an electorate, is a complex system with moving parts and reactions to every action.  We overrate our ability to impose our preferred order on these systems, and there is a "myth of the master strategist"..."

"A serious strategy shows humility; it has built in contingencies, never plans too far ahead, goes easy on the details that cannot be controlled, and does not pretend miracles can be achieved..."

"The emphasis on looseness raises the paradox of whether there is really a strategy at all.  Is it not more like a disposition of mind, a general resourcefulness and opportunism... that removes all illusions about how much anything as man made as strategy, can really achieve in an unknowable world."
Lacking the
humility "beta"!

But let's not stress out about it !! Okay??


William Brooks said...

Mike Tyson seems to have much more wisdom than Elizabeth Warren, the CFPB and the people who think they are the A-Team.

Anonymous said...

The greatest fallacy of a plan put in place by the government is that you must follow that plan and not deviate from it for fear that it will be thought you implemented the plan and failed to provide for the possible events that could occur resulting in that plan being flawed.