We always enjoy Deborah Solomon’s prickly interviews in the NYT Sunday Magazine, and this week’s with Myron Scholes of Black-Scholes and Long Term Capital Management fame is no exception.
The takeaway, you can think whatever you want about Scholes and his role in certain calamities. He doesn’t give a damn.
You’re known as the “intellectual father of the credit-default swap.” Do you accept that label?
Let’s see. If it’s good, yes. If not, no.
The writer Nassim Nicholas Taleb contends that instead of giving advice on managing risk, you “should be in a retirement home doing sudoku.”
If someone says to you, “Go to an old-folks’ home,” that’s kind of ridiculous, because a lot of old people are doing terrific things for society. I never tried sudoku. Maybe he spends his time doing sudoku.
After leaving academia, you helped found Long-Term Capital Management, a hedge fund that lost $4 billion in four months and became a symbol of ’90s-style financial failure.
Obviously, you prefer not to have lost money for investors.
Update: Looks like Scholes is making the Q&A rounds. Mahalanobis translates this amusing bit from an Austrian interview:
Die Presse: Is this your first stay in Vienna?
Myron Scholes: No, I’ve been here a couple of years ago. Got invited by a private euqity manager, Mr. Grasser [Austrian Minister of Finance from Feb 00 to Jan 07; couple of years?]. What is he doing now?
Die Presse: He is married to a rich woman…
Myron Scholes: See, that’s the best way to reduce risk.