Diego Espinosa runs Sistema Research, a consulting firm that applies a complex systems approach to strategic uncertainty. He also teaches security analysis at the University of San Diego, and he authored a chapter for a book on the US Federal Reserve’s role in the 2008 crisis. Espinosa formerly managed a hedge fund, was a portfolio manager of a global equity fund at Scudder, ran European research for Sanford Bernstein, and was a top-ranked analyst at Morgan Stanley. He started his career at the Boston Consulting Group. Espinosa holds an MBA from the Wharton School at the University of Pennsylvania.
Today, strategy adds value when it understands and exploits uncertainty better than the competition. Pure efficiency can no longer be the only way.
An approach called complex systems can help analysts get a better handle on investment uncertainty. It does so by providing a means of pattern recognition that picks up where statistics and finance leave off.
Imagine we are sometime in the distant future. A company has suffered years of declining earnings, and the dividend is at risk. Then, through a stroke of luck, people come to covet the company’s bonds as wallpaper material.