I read that he's into equity options.
Then again, you can't believe everything you read.
Nassim Taleb makes the rounds again
- Thread starter Maverick74
- Start date
I read that he's into equity options.
Then again, you can't believe everything you read.
He makes a sh*tload of money. After the bubble bust, his next big score was being long crude volty, he was carrying tons of upside exposure. That turned out...tolerably well.
And in the article he never stated he was buying 10 sigma puts - 3rd grade reading skills are enough to see the sentence is a hypothetical. It's also a myth he primarily looks for downside equity damage - especially in low volatility situations, he also looks for *upside* dislocations. He has gone so far as to point out that looking for downside dislocations (in equities) in periods of low volty is generally (paraphrasing) a suckers bet.
It appears Maverick is the only guy here paying attention.
Is Taleb making money from returns or fees? What are his latest returns?
Vic and NNT both seem to be walking, talking contradictions of themselves. After seeing a number of interviews with both of them over the years, I think they just say whatever to throw people off of what they are really doing. In live interviews, Vic rambles on about 100 year commodity charts and regressive non-linear distributions and other musings, but in reality he is mostly selling S&P puts as he always has. Just take a look at his fund. Whenever the S&P takes it on the chin, Vic is down a decent amount. The next month after a rebound, he gets it all back and more - which probably means he is doubling down and rolling out.
So for all the 50 cent talk, he's doing something pretty simple. I don't know what Taleb is really doing, but it's hard to believe he could be bleeding money for too awful long and still have people throwing more his way.
Vic and NNT both seem to be walking, talking contradictions of themselves. After seeing a number of interviews with both of them over the years, I think they just say whatever to throw people off of what they are really doing. In live interviews, Vic rambles on about 100 year commodity charts and regressive non-linear distributions and other musings, but in reality he is mostly selling S&P puts as he always has. Just take a look at his fund. Whenever the S&P takes it on the chin, Vic is down a decent amount. The next month after a rebound, he gets it all back and more - which probably means he is doubling down and rolling out.
So for all the 50 cent talk, he's doing something pretty simple. I don't know what Taleb is really doing, but it's hard to believe he could be bleeding money for too awful long and still have people throwing more his way.
Luck or skill, the guy who ran Harvard's endowment just raised $6 billion for a new hedge fund...... $6 @#$%ing billion!!!!!!
This guy can dump it into treasuries, charge .005% for 2 years, apologize for the fact that despite the returns being positive he lagged the market and never do anything again for life!
This guy can dump it into treasuries, charge .005% for 2 years, apologize for the fact that despite the returns being positive he lagged the market and never do anything again for life!
I feel theres a misunderstanding about what Nassim really believes in.
He is saying that unexpected events will happen unexpectedly, and people tend to underestimate this possibility.
An example will be a writer of a far OTM option. When an unexpected event happen, this writer will be in deep sh*t. But when will this happen? Who knows, it's supposed to be unexpected. As a result of this people underestimate this risk.
Nassim says due to options pricing, far OTM are actually undervalued because it can never be correctly priced because risk can happen unexpectedly, outside any statistical analysis. It is not factored in inside the pricing. Therefore if you write habitually, u will gain consistently until a crap thing happen. And if you buy habitually, u will bleed continually until a miraculously crap thing happen.
This isnt some luck, he is very right in every sense. Random risk can never ever be measured or priced-in. How to do that?
He is doing it in reverse order. Instead of winning small gains and have rare big meltdowns, he is losing small losses and have rare big explosions. Except that in netto if you compare the two, he should gain better than the first guy because of the impossibility or underestimation of accurately pricing-in random risk.
That Nassim is an interesting genius. He's nuts to go so contrarian. But he is a damn genius alright.
He is saying that unexpected events will happen unexpectedly, and people tend to underestimate this possibility.
An example will be a writer of a far OTM option. When an unexpected event happen, this writer will be in deep sh*t. But when will this happen? Who knows, it's supposed to be unexpected. As a result of this people underestimate this risk.
Nassim says due to options pricing, far OTM are actually undervalued because it can never be correctly priced because risk can happen unexpectedly, outside any statistical analysis. It is not factored in inside the pricing. Therefore if you write habitually, u will gain consistently until a crap thing happen. And if you buy habitually, u will bleed continually until a miraculously crap thing happen.
This isnt some luck, he is very right in every sense. Random risk can never ever be measured or priced-in. How to do that?
He is doing it in reverse order. Instead of winning small gains and have rare big meltdowns, he is losing small losses and have rare big explosions. Except that in netto if you compare the two, he should gain better than the first guy because of the impossibility or underestimation of accurately pricing-in random risk.
That Nassim is an interesting genius. He's nuts to go so contrarian. But he is a damn genius alright.
Mr. Randomness just fills a void. Nobody else out there bets on the big event. If he started out in the 30's, he would've waited until 1987 to make some coin? I don't recall any major crashes from '29 to '87. Thats an awful long time to a model to be a success.