Sunday, August 13, 2017

US Navy and risk management - follow the ABCD process

The US Navy has an structured approach to risk management which is slightly different than the Marine Corps and US Army. (See our posts on US Marine Corps and US Army risk management.) The US Navy actually has a trifold brochure for Time Critical Risk Management. Would you ever expect to see this from a money manager? Certainly, the ABCD process is a loop for determining any trade or portfolio action.

One of the key problems with risk management is not conceptual. We have theory and knowledge of what is required for good risk management. The issue is the decision-making process and implementation. This can be achieved through following the Navy trifold.
Money management has not cornered the market on good risk management processes. In fact, there may be a lot to learn from other disciplines that have to face significant uncertainty. 

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