3 ms·

And yet companies make a fortune betting on markets or sports using those exact "Ludic Fallacy" models - like linear regressions, probability etc. They know it'

And yet companies make a fortune betting on markets or sports using those exact "Ludic Fallacy" models - like linear regressions, probability etc. They know it's real life, and many someone else is fixing the coin toss, but they can still get an advantage. In any real casino, 99 blacks in a row and they'd shut down the table.

Reimersholme 6y ago
...and then a financial crisis hits and suddenly they expect the government to bail them out because they didn't account for that risk in their models.
- Ambol 6y ago
  Or they knew all along that the government would bail them out, so they were playing a very different game than everybody else.
- quickthrower2 6y ago
  Ha ha well that’s a different story more to do with bonus culture. An example of where the street smarts might come into play in modelling the modellers and predicting 2008
PhantomGremlin 6y ago
And yet companies make a fortune betting on markets Until they don't. This happened in March, and I just love the Reddit headline: Someone yolo’d a pension fund The trade was easy money until fat tails caught up with it. I think Matt Levine also discussed this, as did HN. https://old.reddit.com/r/wallstreetbets/comments/g5r5n6/someone_yolod_a_pension_fund/ https://old.reddit.com/r/wallstreetbets/comments/g5r5n6/some...
- everybodyknows 6y ago
  Ah ha! Thank you so much -- been wondering for months who might have been on the other side of this trade: https://www.forbes.com/sites/antoinegara/2020/03/25/billionaire-bill-ackman-100-fold-return-on-coronavirus-hedge-2-billion/ https://www.forbes.com/sites/antoinegara/2020/03/25/billiona... The tragedy of it of course is that the incompetent pension managers will keep their last ten years of performance bonuses, and the citizens of Alberta will get ... tax increases.

3 ms·

And yet companies make a fortune betting on markets or sports using those exact "Ludic Fallacy" models - like linear regressions, probability etc. They know it'

by quickthrower2 6y ago

Reimersholme 6y ago
...and then a financial crisis hits and suddenly they expect the government to bail them out because they didn't account for that risk in their models.
- Ambol 6y ago
  Or they knew all along that the government would bail them out, so they were playing a very different game than everybody else.
- quickthrower2 6y ago
  Ha ha well that’s a different story more to do with bonus culture. An example of where the street smarts might come into play in modelling the modellers and predicting 2008
PhantomGremlin 6y ago
And yet companies make a fortune betting on markets Until they don't. This happened in March, and I just love the Reddit headline: Someone yolo’d a pension fund The trade was easy money until fat tails caught up with it. I think Matt Levine also discussed this, as did HN. https://old.reddit.com/r/wallstreetbets/comments/g5r5n6/someone_yolod_a_pension_fund/ https://old.reddit.com/r/wallstreetbets/comments/g5r5n6/some...
- everybodyknows 6y ago
  Ah ha! Thank you so much -- been wondering for months who might have been on the other side of this trade: https://www.forbes.com/sites/antoinegara/2020/03/25/billionaire-bill-ackman-100-fold-return-on-coronavirus-hedge-2-billion/ https://www.forbes.com/sites/antoinegara/2020/03/25/billiona... The tragedy of it of course is that the incompetent pension managers will keep their last ten years of performance bonuses, and the citizens of Alberta will get ... tax increases.