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The article misses the definition of "Black Swan" - you CANT bet on Black Swan events or farm Black Swans. If you could, it werent a Black Swan. "The dispropor

by jpdus 14y ago

The article misses the definition of "Black Swan" - you CANT bet on Black Swan events or farm Black Swans. If you could, it werent a Black Swan. "The disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology"[1] [1] http://en.wikipedia.org/wiki/Black_swan_theory http://en.wikipedia.org/wiki/Black_swan_theory

RiffMcGriff 14y ago
I don't agree with this completely. The idea that Nassim Taleb talks about in Antifragility relates to the allocation across assets of 1/n, i.e. all have a uniform probability of 'being huge', since it's impossible to know at the time of investment. You don't know which ones are going to take off, but you put yourself in a position to capture as much positive upside as possible.
SonicSoul 14y ago
there is a chance he read Nassim Talebs book and tried to apply a technique of betting on very rare and unpredictable events as a risk mitigation measure or profiting when everyone else loses. but i'm not sure how that applies to his examples.. It's seem like more of a "numbers game" with some general advice on how to be successful. Kudos on making a catchy title.
klenwell 14y ago
Malcolm Gladwell outlined the Black Swan strategy Taleb used at Empirica in this New Yorker article from way back in 2002: http://www.gladwell.com/2002/2002_04_29_a_blowingup.htm http://www.gladwell.com/2002/2002_04_29_a_blowingup.htm Here's the part that resonated with me: "We cannot blow up, we can only bleed to death," Taleb says, and bleeding to death, absorbing the pain of steady losses, is precisely what human beings are hardwired to avoid. "Say you've got a guy who is long on Russian bonds," Savery says. "He's making money every day. One day, lightning strikes and he loses five times what he made. Still, on three hundred and sixty-four out of three hundred and sixty-five days he was very happily making money. It's much harder to be the other guy, the guy losing money three hundred and sixty-four days out of three hundred and sixty-five, because you start questioning yourself. Am I ever going to make it back? Am I really right? What if it takes ten years? Will I even be sane ten years from now?" What the normal trader gets from his daily winnings is feedback, the pleasing illusion of progress. [Hmmm. Can't get italics to work on the quotation.]
- aristus 14y ago
  Ten years on Empirica is closed, and its record of returns is interestingly vague, given all the media attention at the onset. Universa Investments L.P. sprung up from the ashes in 2007. Again, the record of return is "secret", except for careful leaks in the press when things happen to pay off. But wait, there's more! They have a brand-new "Black Swan ETF" that hedges the S&P 500 and charges you 0.95% for the privilege. It looks a whole lot like the usual hedge fund bullshit play to me. Make lots of noise for a few years, get the punters to play, close down, then open up under a new name. Lather, rinse, repeat.

by jpdus 14y ago

RiffMcGriff 14y ago

I don't agree with this completely. The idea that Nassim Taleb talks about in Antifragility relates to the allocation across assets of 1/n, i.e. all have a uniform probability of 'being huge', since it's impossible to know at the time of investment. You don't know which ones are going to take off, but you put yourself in a position to capture as much positive upside as possible.

SonicSoul 14y ago

there is a chance he read Nassim Talebs book and tried to apply a technique of betting on very rare and unpredictable events as a risk mitigation measure or profiting when everyone else loses. but i'm not sure how that applies to his examples.. It's seem like more of a "numbers game" with some general advice on how to be successful. Kudos on making a catchy title.

klenwell 14y ago

Malcolm Gladwell outlined the Black Swan strategy Taleb used at Empirica in this New Yorker article from way back in 2002: http://www.gladwell.com/2002/2002_04_29_a_blowingup.htm http://www.gladwell.com/2002/2002_04_29_a_blowingup.htm Here's the part that resonated with me: "We cannot blow up, we can only bleed to death," Taleb says, and bleeding to death, absorbing the pain of steady losses, is precisely what human beings are hardwired to avoid. "Say you've got a guy who is long on Russian bonds," Savery says. "He's making money every day. One day, lightning strikes and he loses five times what he made. Still, on three hundred and sixty-four out of three hundred and sixty-five days he was very happily making money. It's much harder to be the other guy, the guy losing money three hundred and sixty-four days out of three hundred and sixty-five, because you start questioning yourself. Am I ever going to make it back? Am I really right? What if it takes ten years? Will I even be sane ten years from now?" What the normal trader gets from his daily winnings is feedback, the pleasing illusion of progress. [Hmmm. Can't get italics to work on the quotation.]

aristus 14y ago
Ten years on Empirica is closed, and its record of returns is interestingly vague, given all the media attention at the onset. Universa Investments L.P. sprung up from the ashes in 2007. Again, the record of return is "secret", except for careful leaks in the press when things happen to pay off. But wait, there's more! They have a brand-new "Black Swan ETF" that hedges the S&P 500 and charges you 0.95% for the privilege. It looks a whole lot like the usual hedge fund bullshit play to me. Make lots of noise for a few years, get the punters to play, close down, then open up under a new name. Lather, rinse, repeat.