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Category Archives: Investing

A ‘Black Swan’ Fund Made $1 Billion This Week | WSJ

Universa Hedge Fund, a famous ‘Black Swan’ fund, made more than $1 billion in profits in one week amid volatility. The recent market rout caught some star Wall Street traders by surprise. But not a hedge-fund firm affiliated with “The Black Swan” author Nassim Nicholas Taleb, which gained more than $1 billion on a strategy […]

I am Nassim Nicholas Taleb Ask Me Anything on Options and other Nonlinear Derivatives 6/5/15

NNT did an AMA on Reddit yesterday. I’ve collected his responses in this post. You can see the entire exchange here. [–]nntaleb   Indeed. ATM drops faster, OTM rises. The same idea of shadow theta. Also project that the delta will go lower over time. [–]nntaleb   I wish you both luck and patience. [–]nntaleb   1) These […]

A Dozen Things I’ve Learned from Nassim Taleb about Optionality/Investing | 25iq

Excellent! See the entire list, link below. A Dozen Things I’ve Learned from Nassim Taleb about Optionality/Investing 1. ”Optionality is the property of asymmetric upside (preferably unlimited) with correspondingly limited downside (preferably tiny).”  Venture capital, when practiced properly by a top tier firm, is a classic example of a business that benefits from optionality. All […]

Risk Control: Nassim Taleb Versus Reality

What do you mean by “fake low volatility? You know the funds of Bear Stearns that blew up in the subprime crisis? They were funds that never had a down month. A lot of people who blew up in subprime did not have a down month—ever. And people rushed to invest in them because they […]

When Smart Investors Do Stupid Things

The article closes by asking, “how long can they produce those kinds of returns before suffering some spectacular crash?” We now know the answer: about a year. LTCM was a glaring reminder that past volatility is a terrible measure of future risk. Yet we still obsess over volatility, convinced that it tells us how safe […]