Tag: tail risk
15 posts tagged "tail risk".
The danger posed by rare, extreme events at the far ends of a probability distribution — the outcomes that conventional bell-curve thinking treats as negligible but which dominate real-world consequences. Nassim Taleb made it central to his work, arguing that black swans in the fat tails matter far more than the comfortable average, a view informed by Benoit Mandelbrot's fractal mathematics. On the blog, managing tail risk is the flip side of pursuing optionality: the barbell strategy and asymmetric bets are both ways of capping catastrophic downside while staying exposed to enormous upside. The practical upshot is to survive first — avoid ruin — then let favourable tails do the rest.
Posts:
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I Miss You
We don't talk much these days but we go way back. So I'm feeling kinda bummed about how I permanently and irrevocably lost any way of contacting you. Whoops!
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10 Principles of Optionality For an Uncertain World
What is optionality? If you want a thorough answer, check out the big juicy book I spent the last couple of years writing.
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Getting Hacked and Getting Hard
CLEARANCE SALE! VANS SHOES CHEAP! I was as surprised as anyone to hear that I'd pivoted from blogging to hawking knock-off footwear on Facebook.
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Inevitable Coronavirus Post
If it costs nothing at all to mitigate a small chance of a big risk, then do it! Ignore anyone who makes fun of you for being 'paranoid', and don't wait for permission.
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The Optionality Approach to Getting Lucky
What is optionality? My favourite tool for finding juicy asymmetries between risk and reward, and creating your own luck.
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Beware of Geeks Bearing Formulas
The history of finance is a history of brains splattered on the pavement. Just how safe is the buy-and-hold index funds orthodoxy?
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The Barbell Strategy for Buying Quality Stuff
The idea that buying high-quality stuff saves you money in the long run is overrated, but there's a way to get the best of both worlds.
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Advanced Investing: The Barbell Strategy for Bastards
"Marry an accountant, but have occasional flings with rock stars." Nassim Taleb's barbell strategy won't improve marital harmony, but it's smart investing.
Also mentioned in:
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Highlights From the Comments on AI Doom
My coming-out post on why I'm no longer an AI doomer seems to have struck a nerve.
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The ‘Bias’ Bias: No, Your Brain is Not Made of Swiss Cheese
Most apparent biases are, in fact, perfectly good heuristics, and people are far more rational than we have been led to believe.
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The Self-Experimentation Guide
A self-experiment that doesn't generate obvious results, like taking tiny, sub-threshold doses of LSD, crosses the line into fiddling on the margin.
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How to Profit From Coronavirus
A black swan event unleashes destruction, but also opportunity. What would it take to not only weather this situation, but profit from it?
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2019 Spending Breakdown: The Year of Becoming a Fancy Bitch
After tracking all my expenses, I calculate that my lifestyle has inflated by 1.25x this year. Honestly... I’m kind of into it.
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Bali on a Budget: Living on Less Than $800 a Month
After four trips in as many years, I’ve got enough spending data for a detailed breakdown on the delightfully low cost of living that Bali has to offer.
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The Barbell Strategy: How Not to Be a Starving Artist
Living off ramen in your mom's basement while you wait for your genius business idea or novel to hit the big time is a dead end. It's time to get strategic.
