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"another 75-year economic event again" How do we know it's a 75 year event? Because it happened once 75 years before? How often should it happen? We can't hon

"another 75-year economic event again" How do we know it's a 75 year event? Because it happened once 75 years before? How often should it happen? We can't honestly answer how often it's going to or should happen. We can't honestly assess these sort of risk patterns because we don't have models that take enough of the variables into account (or even could?) Check out Taleb's Black Swan. His big thing is understanding what risks are measurable (very few), which have a bounded/estimable impact (still very few), and which are both unbounded and immeasurable or most of them.

caminante 8y ago
>How do we know it's a 75 year event? Because it happened once 75 years before? How often should it happen? We can't honestly answer... We do have models that take it into account. Taleb's argument isn't that you can't model the market, it's that most people aren't using the appropriate models [0]. [0] https://en.wikipedia.org/wiki/Fat-tailed_distribution#Fat_tails_and_risk_estimate_distortions https://en.wikipedia.org/wiki/Fat-tailed_distribution#Fat_ta...
- fromthestart 8y ago
  Interesting. The gist seems to be that we model market events with normal distributions, which is consistent with what I've seen in other "natural" and/or emergent processes, and this underestimates risk, because the true distribution is fat tailed.
  - fnord123 8y ago
    This came out in the same year as Taleb's Black Swan: https://www.springer.com/us/book/9781846284199 https://www.springer.com/us/book/9781846284199 Enjoy!
C1sc0cat 8y ago
You can have a 75 year event in successive years - the UK village I live in once had two 250 year floods inside of 5 years.
- onetimemanytime 8y ago
  >>You can have a 75 year event in successive years - the UK village I live in once had two 250 year floods inside of 5 years. Yeah but at some point the "250 year flood" might need a new name, like every other year flood or something.
ataturk 8y ago
There's a lot of negativity and agitprop on the Internet because fear sells. I've concluded that listening to all this bullcrap is a waste of my time. If and when the economy tanks, you'll know. What would you do differently anyways? Are you in over your head in debt? Over-leveraged in stocks? When is that ever a good idea?

caminante 8y ago

>How do we know it's a 75 year event? Because it happened once 75 years before? How often should it happen? We can't honestly answer... We do have models that take it into account. Taleb's argument isn't that you can't model the market, it's that most people aren't using the appropriate models [0]. [0] https://en.wikipedia.org/wiki/Fat-tailed_distribution#Fat_tails_and_risk_estimate_distortions https://en.wikipedia.org/wiki/Fat-tailed_distribution#Fat_ta...

fromthestart 8y ago
Interesting. The gist seems to be that we model market events with normal distributions, which is consistent with what I've seen in other "natural" and/or emergent processes, and this underestimates risk, because the true distribution is fat tailed.
- fnord123 8y ago
  This came out in the same year as Taleb's Black Swan: https://www.springer.com/us/book/9781846284199 https://www.springer.com/us/book/9781846284199 Enjoy!

C1sc0cat 8y ago

You can have a 75 year event in successive years - the UK village I live in once had two 250 year floods inside of 5 years.

onetimemanytime 8y ago
>>You can have a 75 year event in successive years - the UK village I live in once had two 250 year floods inside of 5 years. Yeah but at some point the "250 year flood" might need a new name, like every other year flood or something.

ataturk 8y ago

There's a lot of negativity and agitprop on the Internet because fear sells. I've concluded that listening to all this bullcrap is a waste of my time. If and when the economy tanks, you'll know. What would you do differently anyways? Are you in over your head in debt? Over-leveraged in stocks? When is that ever a good idea?