It’s the Schwed Test: was your money stolenor did you just lose it?

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  Christopher Fildes

  It’s the Schwed Test: was your money stolenor did you just lose it?

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Alexander Larman

What happened to the Rishi Sunak I knew at school?

Through a hedge, backwards

Some funds have done well by the simple technique of borrowing short and lending long, but even that, by definition, is risky. Some put their faith in a formula, like the Nobel prizewinners who went down with Long Term Capital Management by failing to distinguish the improbable from the impossible. Some look for quick turns. Few are transparent, for that, after all, might give the game away. Quite what risks they may be running, some of their holders will find out the hard way, and whatever the answer may be to the $250 million question in Florida, the Schwed Test will prove a true guide. Schwed himself supplied the answer: ‘Nothing crooked — just bad luck and bad brains met together in an effort to do something that couldn’t be done in the first place.’

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