RealSurf Surfers' Forum

It was actually the first paragraph after several pages that I thought I understood.

Yeah, his Black Swan Theory is a classic. Been around for many years. The change from stable societies with little risk and little preparation for risk to unstable societies where risk is everywhere. Opportunities for great luck and great misfortune. Sport is a good example. The change from sporting prowess being largely amateur and widespread to professional and highly elitist with massive monetary reward for success.

Surfing and footy. Intellectual pursuits. Probably not.

“An alternative suggestion is to engage in highly speculative bets with a limited downside”

Let’s examine that.

Spend 100 a month on lottery tickets and don’t buy real estate or BBB rated bonds, a medium risk investment. Guys clearly an idiot.

You should have a read, Thudster.

Nah. I’m more of a pick your own adventure type of guy.

And besides Beans I’m actually a believer in the Black and Scholes pricing model as a hedging tool.

Any thoughts on that statement from anyone talking about this Taleb fella and his philosophy on risk?

Happy to hear it. Critical thinkers only, cut and paste slabs of text or introduction book review opinions not welcome.

Just trying to get you on the page Thudster.
Don’t think you will get many takers for in-depth analysis of equations on investment risk around here.

Thud wrote: ↑

Sat Jul 16, 2022 3:53 pm

Happy to hear it. Critical thinkers only, cut and paste slabs of text or introduction book review opinions not welcome.

Well off you go, Steve. Thudster “believes in” this particular calculus. What’s your opinion of it?

Wasn’t a criticism of anyone Beans. I’m genuinely interested.

Well I'm out then!

Tell me about this Black and Scholes pricing model Thud.

And I'll give you my honest opinion on if there is any common ground with Taleb or they are diametrically opposed.

A question with a question. We playing this game.

Thud wrote: ↑

Sat Jul 16, 2022 3:40 pm

Surfing and footy. Intellectual pursuits. Probably not.

“An alternative suggestion is to engage in highly speculative bets with a limited downside”

Let’s examine that.

Spend 100 a month on lottery tickets and don’t buy real estate or BBB rated bonds, a medium risk investment. Guys clearly an idiot.

LOL, obviously you didn't read my quote

I cut and pasted from your cut and paste.

Why are you guys getting so bent out of shape?

Thud wrote: ↑

Sat Jul 16, 2022 5:27 pm

A question with a question. We playing this game.

….or are we?

Thud wrote: ↑

Sat Jul 16, 2022 6:44 pm

I cut and pasted from your cut and paste.

Why are you guys getting so bent out of shape?

I googled it.

Very good.

Black and Scholes is an options pricing model. Makes a few assumptions to arrive at a price for the option to allow suitable hedging for the underlying asset e.g. shares. You use it for Euro call options. It’s generally the accepted calculation for pricing and has proven to be accurate. Of course you can make incorrect assumptions like any business case and your pricing will be wrong. Back in the day when I worked on the trading floor in London (I wasn’t a trader I’m terrible at math) software like Muex etc utilised B&S.So it’s the accepted standard.

I’m interested in this Tabet guy as he doesn’t believe in B&S as a hedging strategy, even though it’s proven and the guys behind it given noble peace prizes. He also doesn’t use academic references to support his own papers. So as a few of you guys are supporting his theories (don’t know if they have been peer reviewed) I’m interested to understand why his Black Swan book etc is so informative

A Black Swan Event Concept is based on what happened when Early European Explorers discovered black swans in Australia. In classic philosophy the concept of a black swan had been used as an impossible anomaly. Swans were always white. A priori ideals. After that the concept had exactly the opposite meaning.
It’s all about being ready for the last war and not being ready for the next curved ball that uproots the foundations.
In relation to technologies for example you can look at what is suddenly superseded but also at what old technologies or practices may suddenly become relevant again.
Not particularly useful for assessing minor variations.

I’m sure Steve can give you a definitive summary.