Practitioners must take risk measures with a pinch of salt

While useful, it is possible to rely too heavily on conventional risk measures such as volatility and value-at-risk – a point made recently by billionaire US investor Warren Buffett. Every aspiring practitioner should know about their drawbacks, writes energy market veteran Vincent Kaminski

Vincent Kaminski
Vincent Kaminski

Warren Buffett, the chairman and chief executive of Omaha-based conglomerate Berkshire Hathaway, writes annual letters to his shareholders every year. Those letters are widely read not only by investors in his company, but also by people looking for hints on their investment strategy and gems of wit and wisdom that are seldom found in official corporate missives. This is what caught my attention this year:1

"Over the long term... currency-denominated instruments are riskier investments – far ris

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