A four-letter word

“Risk is what’s left over after you think you’ve thought of everything.”

  • Carl Richards.


What is risk ? James Ball in his piece ‘Anatomy of a fiasco: how Britain’s pandemic defences failed’ for The Spectator offers, essentially, one currently relevant practical example:

“In October, a panel of 21 experts from across the world gathered for the first of what promised to be a series of reports assessing readiness for pandemics. ‘Infectious diseases know no borders,’ warned the Global Health Security Index. ‘So all countries must prioritise and exercise the capabilities required to prevent, detect and rapidly respond to public health emergencies.’ Every country was called to be transparent about its capabilities ‘to assure neighbours it can stop an outbreak from becoming an international catastrophe’. Two countries were held up as the best examples: Britain and the United States.

“If a league table were drawn up of countries that most failed to contain Covid deaths, the US and the UK would be pretty near the top. Yet both spent huge amounts of money on their pandemic preparedness and flattered themselves that their experts had built the strongest defence. The UK was ranked best in the world for its ability to stage ‘rapid response to and mitigation of the spread of an epidemic’. It was given 92 points out of 100. Six weeks later, the first Covid-19 case was recorded in China and the real test began.”

That is to say, one instance of risk is a wildly inflated and wholly unjustified sense of overconfidence. Overconfidence is not exactly unheard of in fund management circles either.

A four-letter word