Asset return expectations under an alien invasion

Publication note:  There will be no mid-week update next week. The regular publication schedule will resume next weekend.

 

Is ET here?

The holidays are a great time to decompress and think about big picture topics. This year, I focus on the limitations of modeling techniques for long-term asset returns and the risk of discontinuous exogenous events. In case you missed it, there have been numerous stories emerging in the press about unknown flying objects in the New Jersey area (see this NY Times account as one of many examples). The sightings expanded to other parts of the U.S., and they have been spotted in other countries as far away as Iran, Chile, Japan, and the Philippines. 

 

While I am a subscriber to Occam’s Razor, which can be paraphrased as the simplest explanation is the most satisfactory, and these UFOs are of terrestrial origin, it’s a worthwhile exercise to consider asset return expectations under the scenario of an extra-terrestrial alien invasion. 

The full post can be found here.