"costs real money year by year for several years but then pays off hugely at a sudden moment, has just the characteristics of an insurance policy with generous

"costs real money year by year for several years but then pays off hugely at a sudden moment, has just the characteristics of an insurance policy with generous policy benefits." Sounds more like playing the lottery to me. It could work reasonably well provided:1) the small losses don't add up to more than the payoffs, and 2) the payoffs aren't so far a part you go broke waiting for them. By Taleb's own arguments (in Fooled by Randomness, I haven't read The Black Swan), the unexpected events are too unpredictable to count on even that much. Most likely he's just been lucky with the timing.