The hottest Risk management Substack posts right now

And their main takeaways
Category
Top Finance Topics

It's Always Darkest Before Dawn

QTR’s Fringe Finance • 19 implied HN points • 03 Dec 24
💰 Finance Investing Market Trends Risk management Economic Analysis Portfolio strategy
  1. The Fed can't stop a bear market from happening when stock prices are extremely high. This means that even with their efforts, a market drop could still occur.
  2. Sometimes it's not worth trying to understand why a strategy failed. It's better to acknowledge it and move on rather than clinging to a losing bet.
  3. Hedge fund managers often write letters during tough times, but many don't take responsibility for their mistakes. It's refreshing when someone admits to being wrong without making excuses.

CISA and NCSC's Take on Secure AI Development

Resilient Cyber • 179 implied HN points • 01 Dec 23
🕹 Technology AI Security Software Development Cybersecurity Data Protection Risk management
  1. CISA and NCSC released guidelines for secure AI development that focus on unique security risks and the responsibilities of both AI providers and users. It's important for organizations to understand who is responsible for protecting AI systems.
  2. The guidelines emphasize practices like threat modeling and raising awareness of AI risks during the design phase. This helps organizations build secure systems by understanding potential threats upfront.
  3. Security doesn't stop at deployment; ongoing monitoring and incident response are crucial for maintaining safe AI operations. Companies need to keep an eye on how their AI systems behave and be ready to respond to any security incidents.

Bonds bail us out

Known Unknowns • 235 implied HN points • 26 Jun 23
💰 Finance Investing Economy Insurance Work Risk management
  1. Bonds can be a good financial tool for managing risk and long-term investment.
  2. Questioning traditional financial theories, like investing in long-term bonds, can lead to insights on managing pension funds.
  3. Work-from-home trends may not be sustainable in the long term due to the importance of workplace relationships and culture.

SBOM Management

Resilient Cyber • 159 implied HN points • 18 Dec 23
🕹 Technology Cybersecurity Software Risk management Vulnerability Management Incident Management
  1. SBOMs, or Software Bill of Materials, list components of software products. They help organizations know what parts make up their software, which is important for security.
  2. The NSA offers guidelines for managing SBOMs, emphasizing the need for both software suppliers and consumers to take security seriously. Suppliers should be transparent and accountable, while consumers should ensure their suppliers follow good security practices.
  3. Organizations need effective SBOM tools that can manage and analyze software components, detect vulnerabilities, and facilitate easy reporting. These tools should also be user-friendly to help teams work efficiently.
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What Exactly Is Venture Capital?

Concepts of Finance 🧠 • 279 implied HN points • 15 Aug 23
💰 Finance Investment Startups Private Equity Risk management Economic Trends
  1. Venture capital is a type of funding provided to early-stage companies that have high growth potential. It's different from private equity, which usually invests in more mature companies.
  2. Many startups need venture capital to expand, but it's not the main way new businesses get funding. A lot of startups rely on personal savings or small loans instead.
  3. There are common myths about venture capitalists, such as their wealth or ability to innovate. In reality, not all VCs are rich and many investments don't yield huge returns.

Quant Letter: January 2025, Week-3

The Parlour • 4 implied HN points • 15 Jan 25
💰 Finance Quantitative Analysis Risk management Financial Modeling Market Analysis
  1. A model for pricing VIX options has proven effective in markets like Germany's power and TTF gas markets. This model uses multiple factors to improve accuracy.
  2. The HJM and Lifted Heston Model aims to connect historical data of futures contracts with current implied volatility. This helps better predict market behaviors.
  3. Understanding these models can enhance strategies in quantitative finance, especially for those working with options and futures trading.

Building Businesses in New Frontiers: A Thirst for Adventure Abroad

The Hard Fork by Marvin Liao • 117 implied HN points • 27 Jan 24
💼 Business Entrepreneurship Investing Risk management Opportunities
  1. Exploring new frontiers in international business can be attractive and rewarding.
  2. Venturing into diverse cultures and challenging environments can lead to unique business opportunities.
  3. Engaging in frontier markets requires a tolerance for risk but offers potential for personal growth and financial gain.

In Tackling Near-Term AI Risks, Old-School Monitoring and Filtering Have Value

Risk Musings • 401 implied HN points • 30 Sep 23
🕹 Technology AI Monitoring Risk management
  1. Old-school monitoring and filtering techniques can be valuable in addressing immediate AI risks.
  2. Implementing data loss prevention (DLP) strategies can help prevent data leakage into AI systems.
  3. Monitoring software with a focus on tracking uncertainties in large language models can be a useful tool to reduce falsehoods in AI-generated content.

Overview of Portfolio Construction & Risk Management - Owl and Iguana

DeFi Education • 1398 implied HN points • 12 Nov 21
🔮 Crypto Investing Finance Portfolio Management Risk management DeFi
  1. When building a crypto portfolio, it's important to balance between keeping your money safe, growing your investments, and managing your emotions. This helps ensure you're making smart decisions.
  2. It's smart to have a good chunk of your portfolio in Bitcoin and Ethereum before diving into other high-risk projects. This way, you can still benefit from their growth while taking some risks with other assets.
  3. Understanding the volatility of your investments can help you decide how much to invest in each asset. More volatile assets might require smaller investments to manage risk and avoid big losses.

Yield Farming Model v1.0

DeFi Education • 999 implied HN points • 21 Apr 22
🔮 Crypto DeFi Investing Finance Risk management Liquidity
  1. Providing liquidity is not just free money; it's an investment. You need to know the risks and possible rewards before jumping in.
  2. To really get into yield farming, it's helpful to understand liquidity providing first. It's good to have some hands-on experience with it.
  3. This discussion builds on previous knowledge, so it's a bit more advanced. Make sure you're comfortable with the basics before diving deeper.

Good value governance

The Uncertainty Mindset (soon to become tbd) • 119 implied HN points • 12 Jan 24
🇺🇸 U.S. Politics Governance Policy Decision-making Risk management Resource Allocation
  1. There's a lot of uncertainty in today's world, not just risk. This means leaders need to understand how these two concepts differ to make better decisions.
  2. Mixing up uncertainty with risk can lead to poor choices and wasted resources. It's important to clarify what you're dealing with to avoid making mistakes.
  3. When leaders are clear about uncertainty, they can use their limited resources more effectively. Strategies that focus on uncertainty tend to be cheaper and work better than traditional risk management.

OWASP LLM AI Cybersecurity & Governance Checklist

Resilient Cyber • 79 implied HN points • 06 Mar 24
🕹 Technology AI Cybersecurity Governance Compliance Risk management
  1. Organizations need to understand the unique risks of using Large Language Models (LLMs) and Generative AI, and they should create clear strategies for managing these risks.
  2. Having an AI asset inventory is crucial so that companies know what AI tools they are using and who is responsible for them.
  3. Safety training for employees on AI tools can help prevent misuse and create a culture of transparency within the organization.

The Volatility Divergence

The Last Bear Standing • 22 implied HN points • 01 Nov 24
💰 Finance Market Trends Investing Risk management Economic Indicators
  1. Implied volatility has been rising even as stock prices remain strong. This means that while investors are confident, they are also anticipating potential future risks.
  2. The current divergence between high volatility expectations and low actual volatility is unusual. It's rare for stock prices to be high while at the same time expecting more volatility.
  3. There are concerns in the market about various factors like corporate earnings and macroeconomic issues. These worries might not be reflected in stock prices right now, but they're still influencing how investors are pricing risk.

The Macro Story of SVB Isn't Just About the Fed

Without Warning • 196 implied HN points • 05 Jul 23
💼 Business Banking Regulation Economics Risk management Innovation
  1. SVB's business model relies heavily on uninsured deposits to support the innovation sector.
  2. The narrative around SVB's challenges involves blaming the Fed for its interest rate policies and the impact on bank assets and liabilities.
  3. The uniqueness of SVB's model in banking the Silicon Valley innovation economy raises questions about regulatory changes and potential consequences for American innovation.

11 Things I Learned About Fraudsters

European Straits • 27 implied HN points • 16 Oct 24
💼 Business Corporate ethics Risk management Legal issues
  1. Always check the facts. Fraudsters often lie about who they've talked to or what approvals they have, so it’s important to verify their claims.
  2. Be careful of boundary violations. Fraudsters are great at manipulating people to help them, often by exploiting their weaknesses or feelings of loyalty.
  3. Don't ignore warning signs just because things seem chaotic. Fraudsters can use disorder to divert attention from their actual wrongdoings.

What happens to stocks after an inflation shock?

Klement on Investing • 3 implied HN points • 14 Jan 25
💰 Finance Investing Stock Market Economic Analysis Risk management Market Trends
  1. Stocks usually drop about 4% in real value after a sudden inflation shock. This happens because investors get worried about future profits.
  2. Not all companies respond the same way to inflation. Companies with high profit margins can handle inflation better than those with lower margins.
  3. To prepare for inflation shocks, it's smart to focus on companies that have high markups and strong cash flow. These companies are generally more resilient.

Your Guide To Bull Market Pain Levels

The Lund Loop • 78 implied HN points • 10 Feb 24
💰 Finance Investing Stock Market Risk management Financial planning Speculation
  1. Investors experience different levels of pain in a bull market, ranging from mild discomfort to severe distress.
  2. The Pain Assessment Scale categorizes bull market pain into three main levels: Pain Free, Mild Pain, Moderate Pain, and Severe Pain.
  3. Addressing issues like position sizing, risk management, and speculation can help alleviate bull market pain. Seeking help from a financial planner is advisable if symptoms persist or worsen.

What vulnerabilities were malicious actors focused on in 2022?

Resilient Cyber • 199 implied HN points • 14 Aug 23
🕹 Technology Cybersecurity Software Vulnerabilities Risk management Cloud Security
  1. Malicious actors focused heavily on Microsoft vulnerabilities in 2022, highlighting the importance for organizations to stay updated with security patches.
  2. Vendors and developers should identify often exploited vulnerabilities and hold business leaders responsible for security practices.
  3. End-user organizations need to enforce strong security measures, like multi-factor authentication, and continuously monitor their systems to protect against possible threats.

DeFi for Passive Investors

DeFi Education • 1039 implied HN points • 20 Nov 21
🔮 Crypto DeFi Investing Finance Portfolio Risk management
  1. Passive investing in DeFi can be a way for less active investors to earn returns. It allows them to participate in the market without needing to constantly manage their assets.
  2. Managing a DeFi portfolio still requires some understanding of risk management. Even passive investors should be aware of potential pitfalls and rewards.
  3. DeFi is becoming a major player in finance, and it can be beneficial for investors to explore these opportunities, even without active involvement.

Fearing the sheriff more than the bandits

Deploy Securely • 157 implied HN points • 21 Jul 23
🕹 Technology Cybersecurity Compliance Risk management Government Regulation Data Protection
  1. The fear of repercussions from authorities like prosecutors and regulatory agencies is often greater than that from hackers.
  2. Cybersecurity professionals and their teams face severe consequences for non-compliance, even if the breach was not entirely their fault.
  3. A flawed liability regime and focus on performative compliance rather than actual security measures contribute to the prioritization of checking boxes over protecting data.

How to define risk appetite and tolerance

Deploy Securely • 157 implied HN points • 12 Jul 23
🕹 Technology Cybersecurity Risk management Compliance Business impact
  1. Risk appetite is the baseline level of cybersecurity risk an organization is willing to accept.
  2. Risk appetite should be defined in fungible units like dollars or engineer-hours, not security-specific terms.
  3. Risk tolerance is the speed at which an organization must address risk above the established appetite to avoid compliance issues.

Diving Deeper on Liquidity Providing

DeFi Education • 879 implied HN points • 17 Jan 22
🔮 Crypto DeFi Liquidity Yield Farming Risk management
  1. Liquidity providing can be complex, and many people don’t fully understand how changing markets can impact their investments. Knowing how to react to market movements is important.
  2. There are strategies to maximize gains and minimize risks when liquidity providing. Understanding the direction of coin movements can help you make better decisions.
  3. It's essential for investors to educate themselves continually about liquidity and market dynamics. Staying knowledgeable can lead to more successful outcomes in yield farming.

An Inflation Follow Up: The Disparate Effects on Companies

Musings on Markets • 659 implied HN points • 20 May 22
💰 Finance Investing Markets Economics Asset Classes Risk management
  1. Inflation affects companies differently, with some benefiting and others struggling. Investors are on the lookout for companies that can handle high inflation better.
  2. Companies with strong pricing power, low costs, and stable earnings tend to perform better during times of inflation. It's important for these companies to keep debts low and have short-term investment options.
  3. Historical trends show that small-cap and value stocks often outperform in high inflation periods. In 2022, stocks with solid cash flows and dividends have held their value better than riskier, money-losing companies.

Risk Capital and Markets: Temporary Pull Back or Long term Retrenchment?

Musings on Markets • 579 implied HN points • 02 Jul 22
💰 Finance Investing Market Trends Risk management Capital Markets Economic Factors
  1. Risk capital is money invested in risky assets, while safety capital is for safer investments. Finding the right balance between these two is important for a healthy economy and market.
  2. Market changes in risk capital can lead to higher risk premiums and impact the pricing of both stocks and bonds. When risk capital is scarce, default spreads increase for riskier investments.
  3. The current market may be facing a long-term pullback in risk capital due to factors like inflation, which can affect stock prices and investors' willingness to take risks.

UCSF has match day outdoors & plans on contact tracing... in 2024

Vinay Prasad's Observations and Thoughts • 132 implied HN points • 16 Mar 24
🏥 Health Politics Medical education Public Health Risk management
  1. Population immunity to COVID-19 is high, making large outdoor gatherings unnecessary. Holding events outdoors may not significantly impact transmission and could be inconvenient.
  2. There is little evidence to support the need for contact tracing in 2024. The effectiveness of contact tracing for the virus is questionable.
  3. Medical school policies may sometimes prioritize perceived safety over rational decision-making, potentially impacting student experiences and learning.

Watched pots, petards and black ducks

The Jolly Contrarian • 179 implied HN points • 07 Apr 23
💼 Business Risk management Regulation Banking Crisis Management Organizational Structure
  1. Consider supporting independent content creators financially to help sustain quality content production.
  2. Complex regulations like Basel III can be so convoluted that even regulators may not fully understand the consequences, highlighting potential systemic risks.
  3. Banks need to focus on managing both known and unknown risks, including risks that may not be obvious or mentioned in regulations, to prevent potential disasters like financial crises and organizational failures.

Bad year? Increase risk. Good year? Do the same.

Klement on Investing • 3 implied HN points • 08 Jan 25
💰 Finance Investing Risk management Hedge Funds Market Trends
  1. Hedge fund managers often take more risks after a bad performance to try and recover losses. This can lead to excessive risk-taking because they don’t lose more than what's already lost.
  2. Interestingly, top-performing hedge fund managers also increase their risks, possibly due to overconfidence or wanting to attract more investor money.
  3. The way hedge fund fees are structured can encourage these risky behaviors, which might not be in the best interest of investors.

Thoughts on the contract-for-differences (CfD)

GEM Energy Analytics • 179 implied HN points • 31 May 23
💰 Finance Energy markets Investment Strategies Renewable Energy Risk management Policy Analysis
  1. A contract-for-difference (CfD) helps energy producers by giving them a stable price. This way, they won't lose money if market prices drop.
  2. CfDs can reduce the risk of high profits during energy crises, aiming to keep electricity prices lower for consumers. They're designed to share some of the financial risks between producers and the government.
  3. The success of CfDs depends on accurately predicting future energy prices, which is really hard. If prices drop too low, it could hurt new energy projects and make it tougher for power producers to plan.

Options for Beginners

DeFi Education • 799 implied HN points • 17 Dec 21
🔮 Crypto Finance Investing Risk management Options trading Decentralized Finance
  1. Options are contracts giving you the right to buy or sell an asset at a set price before a certain date. They help in managing risk and leveraging investments.
  2. Trading options is becoming popular, especially in DeFi. Understanding how to use options can create big opportunities as the market grows.
  3. When using options, be cautious of risks like time decay and volatility. It's important to know what you're doing to avoid costly mistakes.

Risk-Free Rate: What is the Price of Risk?

DeFi Education • 759 implied HN points • 04 Jan 22
💰 Finance Investing Risk management Market Analysis DeFi
  1. The risk-free rate is the return expected from a very safe investment, like U.S. Treasury bonds, and it helps investors judge the risk of other investments.
  2. As the risk-free rate rises, investors expect higher returns from riskier assets, meaning they want more compensation for taking on extra risk.
  3. In the world of DeFi, expected returns are usually much higher than traditional markets, but it’s important to understand the type of risks involved with different assets.

Secure-by-Design (and Demand)

Resilient Cyber • 119 implied HN points • 20 Oct 23
🕹 Technology Cybersecurity Software Development Risk management Market Dynamics
  1. Software companies should take more responsibility for keeping their products secure. It's not fair for the burden of safety to rest solely on customers.
  2. Transparency is vital in building trust. Companies should openly share their security practices and incident reports to help everyone strengthen their defenses.
  3. Customers can drive change by choosing to buy from companies that promote secure products. When buyers demand safety, companies will start to respond.