One of two follow-ups to that Wilmott article. Note this intro from Wilmott’s article:
I’M fairly risk-averse by nature and so have always ignored the offers from my bank to help me “manage my money more successfully.” Put the money in a savings account, earn a bit of interest, but mainly work hard, that’s been my philosophy. Like everyone else, though, I’ve been looking into the small print lately to see just how safe my safe-as-houses account really is.
This is a man who is probably one of the smartest experts in various derivative techniques and hedge fund plays. And you get the impression that he takes no risks whatsoever with his own money. “A bit of interest.” I always make a note of this whenever I hear it – I know a few finance professors who work for hedge funds, with incredibly complicated models of behavioral overreaction, options markets, and mean reversion, who when asked about their own money, say they simply put their money in a market 401(k) fund with the lowest fees. Which is, to say, they really like testing our their models with other people’s money.