Genghis John October 9, 1998 Comment: #199 Reference: "Genghis John," Proceeding of the US Naval Institute, July 1997. Attached.It should now be clear to most readers of this list the Defense Department is not adapting to the changing conditions brought about by the end of the Cold War: We have a modernization plan that can not modernize the force structure, a readiness nose dive, and a corrupt accounting...

1. Beware of obvious rewards and excessive competition—they increase exposure to chance events and reduce the role of skill in acquiring rewards2. Watch for hidden correlations3. Be suspicious of stability or the appearance of stability—there are higher dimensions of risk lurking in the shadows4. Remember that volatility begets volatility5. Invest in preparation—insure against the worst-case-scenario6. Take a large number of risks wh...