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Judgment Needed

June 11, 2008

Corporate Bond Risk Jumps to 2-Month High on Inflation Concern | www.bloomberg.com

Uncertainty breeds panic among people who seek to quantify risk, whether they do so judgmentally or with complex, elaborate "predictive risk models."  There is a dislocation taking place among the world's economies and the markets are simply struggling to quantify the meaning of the structural changes underway. My opinion is that under circumstances like these reasoned, deliberative judgment is to be favord over emotionalism or models that are difficult to understand or assess.  The times challenge the best minds and lesser minds will lose their way and lose money as well.

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