How Managing Money Is Like Managing Little Boy

Operating an investment portfolio today is like running a nuclear power plant, asserts Bernstein’s Inigo Fraser-Jenkins. The systems being managed are complex and “tightly coupled,” with “normal accidents” being part of the complex systems and process. The question is, when the inevitable “mistake” occurs in the form of a market crash, is it an operator or system error?

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Complex systems in a highly interconnected setting are likely to experience "normal accidents"

The most infamous nuclear accident in the US was the Three Mile Island incident. Considered the worst US nuclear incident, there was no actual loss of life and nuclear...