The Grand-Strategy of the Giant Sequoias: Lessons for Unipoles and Patient Investors
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The immense tree quivered like one in agony, and with a crushing, raging, deafening sound it fell, … breaking into a million pieces. Eyewitness to the fall of a giant sequoia, 1893. I stood at General Sherman’s ankle—he is the largest known living organism and one of the oldest—and contemplated a question I was asked long ago by a somewhat philosophical investment manager. What is long-term risk? What is the right measure of risk for a truly patient investor? If you are mandated to ensure survival for longer than a hundred years, preferably forever, what is a good replacement for value-at-risk? VAR may be appropriate for market-based financial intermediaries but is certainly not a good measure of risk for massive real money investors like pension funds and sovereign wealth funds. What is the right measure for such patient investors? I spoke of adverse secular movements in demographics, productivity, sustainability, and so on. But the real answer eluded me since the question was not well-posed. A well-posed replacement for that question is,
The Grand-Strategy of the Giant Sequoias: Lessons for Unipoles and Patient Investors
The Grand-Strategy of the Giant Sequoias…
The Grand-Strategy of the Giant Sequoias: Lessons for Unipoles and Patient Investors
The immense tree quivered like one in agony, and with a crushing, raging, deafening sound it fell, … breaking into a million pieces. Eyewitness to the fall of a giant sequoia, 1893. I stood at General Sherman’s ankle—he is the largest known living organism and one of the oldest—and contemplated a question I was asked long ago by a somewhat philosophical investment manager. What is long-term risk? What is the right measure of risk for a truly patient investor? If you are mandated to ensure survival for longer than a hundred years, preferably forever, what is a good replacement for value-at-risk? VAR may be appropriate for market-based financial intermediaries but is certainly not a good measure of risk for massive real money investors like pension funds and sovereign wealth funds. What is the right measure for such patient investors? I spoke of adverse secular movements in demographics, productivity, sustainability, and so on. But the real answer eluded me since the question was not well-posed. A well-posed replacement for that question is,