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Yes, Taleb's entire life work is premised on the fact that people's mental models of probability distributions are not fat-tailed enough to match reality. He be
by nakedshorts 6y ago
Yes, Taleb's entire life work is premised on the fact that people's mental models of probability distributions are not fat-tailed enough to match reality. He believes that such strategies should be positive in expectation (aka, should make money over the long run).
- chosenbreed37 6y agoI'd say it's even more basic than that. What I take from it is how to avoid ruin and potentially profit from the tail event. I don't see it as a means of increasing wealth even though it can have that effect. It's about preservation first and foremost.
- chillacy 6y agoThe term I've heard used is Kurtosis Risk: https://en.wikipedia.org/wiki/Kurtosis_risk https://en.wikipedia.org/wiki/Kurtosis_risk