Gustavo Ballvé on December 14th, 2010
Food for thought, Mental models, Portfolio Management, Risk management

Via Simoleon Sense: an Atlantic Monthly interview with the head of the TSA, the US agency in charge of transportation security (better known to us travelers as the people behind the annoying yet necessary airport security procedures). In a useful metaphor to risk management in investing, Mr. Pistole (yes, that’s his real name) is very frank in saying that “risk elimination” is a very different proposition from “risk mitigation” – and he would like to move in the direction of actually knowing details about the travelers instead of relying solely on material searches. Not unlike our risk-management mantra “know who you’re dealing with”.

Update (Jan. 26th, 2011): The New York Times published a similar article yesterday called “By nature, airports have risks” that gets a bit more specific about airport security. And as they say, they can make all the effort in the world and never eliminate risk, and still terrorists might just choose another large and public site to attack.

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