Nasim Taleb Speaks Wednesday

[ByLoSellHi]

Quote from g poole:

The comment below was made my a reviewer of the book "The Black Swan":

"As per 'The Black Swan', the idea that unimportant events are routinely underanticipated, I would argue the latter. You make more money selling insurance for extreme events playing on overblown fears, as evidenced by the success of insurance, and reinsurance companies, or the success of selling out-of-the-money put options."

Since this message board is comprised of elite traders, I am curious as to how an elite trader reacts to this comment.

Hogwash.

Buying insurance is a net loss activity, knowing it's a net loss activity, to prevent greater net losses in the event of catastrophe.

Taleb is not buying insurance to prevent net losses in the event of a catastrophe.

The philosophy and strategy he is endorsing is to engage in buying options to profit from those risks, however remote, that manifest themselves every so often, even if he bleeds in the interim period.

 

[TraderMojo]

Live webcast of Nassim Taleb's lecture/book launch at the RSA in London today:

http://www.rsa.org.uk/audio/

 

[domestic]

Quote from ByLoSellHi:

Hogwash.

Buying insurance is a net loss activity, knowing it's a net loss activity, to prevent greater net losses in the event of catastrophe.

Taleb is not buying insurance to prevent net losses in the event of a catastrophe.

The philosophy and strategy he is endorsing is to engage in buying options to profit from those risks, however remote, that manifest themselves every so often, even if he bleeds in the interim period.

i have read both books. some of my interpretation is taleb also sells premium too. there are direct quotes out there that are not in the book.