Abstract
Much investment theory is gratifyingly intuitive. But occasionally, the superficially obvious explanation turns out to be very complicated when you think about it and try to explain it through analysis. And the more you think about it, or try to explain it mathematically, the more impossible it gets. Copernicus showed that an apparently more complex model was actually simpler when you thought about it.
He (Ludwig Wittgenstein) once asked me: ‘Why do people say it is more logical to think that the sun turns around the Earth than Earth rotating around its own axis?’ I answered: ‘I think because it seems as if the sun turns around the Earth.’ ‘Good,’ he said, ‘but how would it have been if it had seemed as if the Earth rotates around its own axis then?1
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© 2013 Frances Cowell
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Cowell, F. (2013). Risk Modelling. In: Risk-Based Investment Management in Practice. Global Financial Markets Series. Palgrave Macmillan, London. https://doi.org/10.1057/9781137346407_5
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DOI: https://doi.org/10.1057/9781137346407_5
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-46692-4
Online ISBN: 978-1-137-34640-7
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