Eumaeus. Please show some respect. [1] Most actuaries have degrees in mathematics/ statistics and then put themselves through countless hours of additional studying to ensure they are well placed to make these judgements. [2] I have read your articles where you make us out to be misleading shareholders and jeopardising customers for profit and it’s frankly offensive. [3] I’ve also repeatedly seen you mocking actuaries such as with your title and picture caption in the article just linked. As an actuary I follow your work out of professional curiosity; if someone thinks we are making miscalculations then I’m listening. [3] My request is just this: keep it to the maths please. (My numbering)
Taking the points in turn.
[1] Correct, most actuaries have some sort of qualification in mathematics and statistics. But in my experience that is their only relevant qualification, and many of them lack even a basic understanding of finance. Mathematics is fine to take you from a set of quantitative assumptions to a quantitative conclusion. It doesn’t help you tease out the problems with the assumptions themselves. In an earlier post I identified one such problematic assumption, namely that the price of a forward contract should be the price that the underlying asset will have (future tense) in the future, rather than the price that the forward contract has (present tense) now.
[2] In my view, the actuarial profession is complicit in misleading shareholders and jeopardising customers for profit. Sorry if anyone feels offended.
[3] “Keep to the maths please”. See point [1] above. The problem is not to do with the maths, but rather a failure to engage with ‘modern’ (50 years old) financial theory.
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