John Hull Quotes

Maybe we should teach schoolchildren probability theory and investment risk management.

Risk models are a substitute for historical knowledge, because they tend to work with just three years' worth of data. But three years is not a long time in financial history.

There are challenges in terms of the measurement of VAR for what are known as nonlinear derivatives, where things like gamma and vega are important dimensions of the risk.

The reality is, risk is variable. Those in the financial world know it.

A 99% Value-at-Risk calculation does not evaluate what happens in the last one percent... This is like an airbag that works all the time, except when you have a car accident.

I don't think you should invest in commodities. Eddie Murphy made it seem risky in Trading Places.

If the investor is uneducated, anything he or she invests in will be risky. So it's not the investment that is risky. It's the investor.

I really think that people have to think safety; taking risks for higher yield is a bad idea once you're in late or latish middle age.

Using volatility as a measure of risk is nuts. Risk to us is 1) the risk of permanent loss of capital, or 2) the risk of inadequate return.

I know many members of our community steer clear of Wall Street because of the perception that the stock market is risky, but I am convinced the biggest risk of all is not taking one.

Never gamble without knowing a back way out.

And then at the end of the day, the most important thing is how good are you at risk control. Ninety-percent of any great trader is going to be the risk control.

The greater the potential for reward in the value portfolio, the less risk there is.

There is a close logical connection between the concept of a safety margin and the principle of diversification.

We next consider the rule that the investor does or should consider expected return a desirable thing and variance of return an undesirable thing.

The proposal is frequently made that the government ought to assume the risks that are "too great for private industry." This means that bureaucrats should be permitted to take risks with the tax payer's money that no one is willing to take with his own.

Instead of hoping he must fear and instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit.

If your broker or investment advisor is not familiar with the concept of standard deviation of returns, get a new one.

There is the risk you cannot afford to take, and there is the risk you cannot afford not to take.

If the expedition had failed, which it might well have done with all hope centered in just one plane, I should still be trying to pay back my obligations.

At Berkshire, I both initiate and monitor every derivatives contract on our books ... If Berkshire ever gets in trouble, it will be my fault. It will not be because of the misjudgments made by a risk committee or chief risk officer.

Take the probability of loss times the amount of possible loss from the probability of gain times the amount of possible gain. That is what we're trying to do. It's imperfect, but that's what it's all about.

The collateralized debt obligation, the CDO, is a structure which allows you to more or less continuously choose how much risk you want to take in a whole batch of securities. And the reason why they got us into so much trouble is that it's hard to figure out how much risk you really are taking.

I think one lesson we have to learn is that there's a lot more risk than we're giving credit to, a lot more what economist calls systematic risk.

Where you want to be is always in control, never wishing, always trading, and always first and foremost protecting your ass. That's why most people lose money as individual investors or traders because they're not focusing on losing money. They need to focus on the money that they have at risk and how much capital is at risk in any single investment they have. If everyone spent 90 percent of their time on that, not 90 percent of the time on pie-in-the-sky ideas on how much money they're going to make, then they will be incredibly successful investors.