Risk Profiling, Risk Management and Investments

 
by Eben Maré, Head of Fixed Income, ABSA Asset Management

IBM recently estimated that we generate approximately 2.5 quintillion bytes of data daily (one followed by 18 zeros – roughly the equivalent of 57.5 billion 32GB iPads). 

The flow of information has had a profound impact on the financial markets and investors’ attitudes. Consider the following two statements:

1.  “Our favourite holding period is forever.” – Warren Buffet.
   
   
2. According to the NYSE factbook, in the 1960s stock average holding periods amounted to around eight years – currently it is believed to be of the order of several days.
   
   

There are several interpretations one can draw from these two statements.

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