Microsoft Excel on Steroids!

Black has white, bull has bear ..Any guesses on what could be the antithesis of a enterprise wide portfolio management system? well, my take is Microsoft excel. I’m not trying to take credit from excel, its probably the greatest system devised ever for number crunchers and its contribution to the development of world financial markets is probably an untold story.

However what happens when you feed steroids to Microsoft Excel, you get products (Resolver Systems Inc) like there. I was having a discussion with a friend of mine, who was partially responsible for the set up of this start up firm, and the kind of fascinating stuff they have been able to do with excel, is something beyond the realms of reality. In some ways, products like these seem to distort reality. The best systems in the world sometimes fail to help a portfolio manager calculate VaR, Black-Scholes, risk ratios, attribution analysis etc, and here was a lowly excel sheet throwing out all these numbers completely accurately.

I’m not a big fan of systems like these and believe they will always live in the fringe of the financial world, and will always only have some cowboy customers (P.S: I have nothing against the good ol folks at Resolver).

Risk is a risky subject today more than ever, people put serious money based on risk numbers which are computed; would you bet a Million George Washington's on the VaR number from an excel file or would you rather bet it based on the  numbers that come from a proven system.

I'm not trying to sell you a system here, I'm just asking you guys to give it a thought. Accuracy of data, audit issue, a bad case of fat fingers..just be aware of your risks while taking the dose of Microsoft on Steroids..you may just end up with a bad case of BenJohnsonitis!

:)