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Pandora’s Risk: Uncertainty at the Core of Finance Page 145 (165 of 304)
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12
Conclusions
Pygmalion held such high standards for women that none could meet
them. Driven crazy with loneliness, he sculpted what he thought was an
ideal woman of ivory. He clothed it, wedded it, and took it to bed. Aphro-
dite, taking pity on him, substituted a real woman for the sculpture and
blinded him to her imperfections.
Unfortunately, Pygmalion’s blessing made him insuff erable. Bragging
of his intolerance for fl er wave of idolatry. People aw, he encouraged wave aft
clung to their narrow images of perfection and begged the gods to make
them real. Th ey forgot that reality transcends imagination.
For those of us in fi nance, it is high time to remember.
As we return to work or studies, as we review our investments or speak
out as citizens, I hope we fi - nd both new respect and new skepticism for fi
nancial markets. Winston Churchill once described democracy as the worst
form of government except for everything else. We can say the same about
fi ey disgrace with error, nancial markets as predictors of future returns. Th
and dazzle with error correction.
Fair value can never be more than what we’re learning it to be. Learn-
ing adds risk. Moreover, we can never completely get a handle on learning
risk; it’s too complex and unpredictable. Th e best we can do is track its
