Accidents Quote by Michael Lewis
“The model used by Wall Street to price trillions of dollar's worth of derivatives thought of the financial world as an orderly, continuous process. But the world was not continuous; it changed discontinuously, and often by accident.”
About This Quote
Source Book: Flash Boys, 2014
He notes that financial models assumed smooth markets, but reality is abrupt and chaotic.
In simple terms: Finance models expect continuity, but markets jump unexpectedly.
Key Takeaway
Prepare for sudden market shifts.
Themes
finance
risk
uncertainty
Mood
cautionary
critical
Type
analytical
inspirational
When to use this quote
- trading
- investment strategy
- risk management
Key Concepts
modeling
systemic risk
black swan
Questions to Reflect On
- How do you hedge against unexpected events?
- What limits do your models have?
A Different Perspective
Models can’t predict all accidents; overreliance is risky.
![“Crucial decisions are made, today as thousands of years ago, in terms of the intuitive guesses and preferences of a few men in positions of authority...[it is] quite likely that the fate of entire societies may be sealed by a series of avoidable mistakes committed by their leaders.” quote by Michael Lewis](https://sms4smile.com/quotes/img-quotes/a59/michael-lewis-705_decision-making_crucial-decisions-are-made-today-as-thou_16888.jpg)
