Hedge fund risk: courage is irrelevant, math dictates optimal risk, says Numerai founder
johncoogan · x · 2026-08-01
Numerai founder Richard Craib argues that praising risk-takers like Leopold is misguided, comparing it to going all-in with pocket sevens and doubling up—it reveals nothing about courage or skill. He once thought big hedge funds were overly risk-averse, but learned they take nearly optimal risk. Risk-taking is mathematical, based on Sharpe ratio, and optimal levels are smaller than expected.
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