There is something inherently wrong with the excessive risk taking: financial markets go through fashions, moods, and phases. If a manager's particular risk tak

There is something inherently wrong with the excessive risk taking: financial markets go through fashions, moods, and phases. If a manager's particular risk taking style fits the current moods of the markets, this manager will seem like a genius. Once the moods changes and the manager start taking massive losses, oh, seems like this guy should be fired. But his replacement will be just someone kinda aligned to the current moods. Once they change, this one will also be fired. The financial system is unpredictable. Even the best and most refined models fall apart. Excessive risk taking must be curbed because regularly taking losses due to flawed predictions is not a professional way of managing money.