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Monthly Archives: May 2013

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 […]

THE PERFECT TEMPERATURE IS CONVEX….

THE PERFECT TEMPERATURE IS CONVEX. Recall that pulmonary ventilators (for patients with weak or sick lungs) are more effective if one varies the intensity (x+dx, x-dx instead of the constant previously assumed optimal x). Also recall that convexity (Jensen’s inequality, antifragility) is a general rule in natural settings rather than the exception. It just hit […]

When one measures “80/20” in data it is…

When one measures “80/20” in data it is likely to be 01/99 or even .0001/99.9999 (REVISED w/explanations) https://dl.dropboxusercontent.com/u/50282823/8020.pdf via When one measures “80/20” in data it is… – Nassim Nicholas Taleb | Facebook.

When one measures “80/20” in data it is…

When one measures “80/20” in data it is likely to be 01/99 or even .0001/99.9999 https://dl.dropboxusercontent.com/u/50282823/8020.pdf via When one measures “80/20” in data it is… – Nassim Nicholas Taleb | Facebook.

A sketch of why regression analyses..

A sketch of why regression analyses don’t work under fat tails.https://dl.dropboxusercontent.com/u/50282823/regression.pdf via A sketch of why regression analyses… – Nassim Nicholas Taleb | Facebook.