druck on risk mgmt via P&L watching...discretionary, tape feel, doesn't trust quant models "So my risk management system has always been what I've described, that knowledge, and then my gut, and watching my daily PnL. And if the daily PnL starts acting in a way it shouldn't, instead of going to some quantitative VAR or beta model, go, Oh, I'm okay, the model says I'm okay." -- full quote "And my risk management system is, and I believe this is true with George although we never talked about it: If I own, let's say, in today's world, the last 10 years at least, if you own stocks and you're short bonds, that most of those 10 years has been the same bet. And if you're long the Euro, that's probably a long risk bet. And you just kind of get a feel in your head of where your matrix is. And I can go in the gym and watch CNBC at 11 o'clock, and I have probably, if you include the whole firm, hundreds of positions on, and all I see on that stupid little ticker is what the S&P is doing, and I can probably tell you our PnL within $2mn. Just because my head knows what my Pound or my Euro position will be doing, and my gold position, based on that. And so I sort of have this internal thing where I'm watching everything. But the reason I love the human side as opposed to the quantitative side is there's nothing like my PnL--and you will pick up, Oh, C is not acting the way it was with A the last eight years, and there's something funny. And then you'll start seeing more funniness going on. And I have always thought that if my PnL acts--if things went well that day, and I'm losing money, and I examine what went on, and if that continues, something is really starting to go haywire in the system. So my risk management system has always been what I've described, that knowledge, and then my gut, and watching my daily PnL. And if the daily PnL starts acting in a way it shouldn't, instead of going to some quantitative VAR or beta model, go, Oh, I'm okay, the model says I'm okay. To me, these models are not only okay, they can get you in huge trouble by causing you a false sense of security when things start going awry, because the model will tell you you're okay, and you will see things happen you've never seen before, whereas if you are a intuitive human trader, you should be able to use your instinct to just start cutting when things aren't acting right."