Richard Zeckhauser's important paper “Investing in the Unknown and Unknowable” provides a very different perspective on the investment process than the approach taken in either standard treatments of financial economics or more recent behavioral finance approaches. He focuses attention on...

From David Ricardo making a fortune buying British government bonds on the eve of the Battle of Waterloo to Warren Buffett selling insurance to the California earthquake authority, the wisest investors have earned extraordinary returns by investing in the unknown and the unknowable (UU). But...