Shared by JohnH

Great find from Christopher at http://www.scalavolpe.com
From 2006.

AT: Do you just have to deal with the emotional side of trading, or is there a way to minimize it?

NNT: I have to deal with it. My strength is that I’m emotional, but that’s also my problem. I’ve always wanted to be out of the markets, but I have this love for options.

What bothers me is not the trading but what comes with it — the emotions and dealing with investors. Trading is like chocolate — a little bit is good for you, but a lot [can hurt you]. It should be done in small doses.

Shared by JohnH

Wow, great find Christopher!

This article from The Forex Village contains some rare insight by Taleb on how he approached options trading.

Of all the information in the article, I think one of the biggest takeaways is Taleb’s point about how far out-of-the-money (OTM) options are likely not to be priced accurately.  Human beings created the option pricing formula.  Human beings have a very difficult time perceiving the likelihood of rare (and often catastrophic) events.  Thus, the option pricing formula does not perform so well when assigning values to far OTM options, since these options are attempting to capture the possibility of extremely rare events.  Ultimately, this undervaluing creates the potential for massive gains, like the one Taleb had in 1987.  

Design: George Nasr (my cousin)

Wall Photos

The Great Bank Robbery

No cheese no desert and no manmade cuisine on the planet will be able to surpass in taste the simplest food we get after an episode of hunger; and no liquid will ever improve on the taste of water after a prolonged period of thirst. [Chapter 1]