Taleb fund and how it profited

Butterball said:
Difficult? They bet $6bln on long vol/tail setups. Seeing +10 to 20% days happens once or twice every market cycle (5-7 years) years. It's not 'difficult' at all.
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That's wrong and exactly my point. They didn't bet $6B...nobody would invest with them if that was the case.

They are providing convexity not available in listed vanillas. That is worthwhile and impressive and people pay for it. It's that simple.
 
Maverick74 said:
His strategy has been "loosely" explained in the past. One way to do this without bleeding to death is to take your Principal and invest in FRA (forward rate agreement) for some duration. Take the net present value of that sum and aggressively invest in outliers. You only use the forward interest cash flow to do this, not the principal. If nothing ever happens, you lose nothing but opportunity cost because at maturity you get your principal back. Of course you give up what you "could" have made by simply buying bonds or stocks.

Example. I'm going to make up numbers here for simplicity. Say you could get 5% interest in a year on your capital. The present value on a million dollars is roughly 950,000. That is what you are paying for a million dollars 12 months from now. You take the 50,000 and aggressively look for opportunities. In 12 months you get your million back plus whatever you made on the 50k. If nothing, then in 12 months you have your starting capital back.

I should point out they made a killing on the bond collapse from the 156 handle down to 125 a few years back. They've also done well on some outsized currency plays. They don't just invest in downside S&P. The above strategy is just a template. Obviously you can get creative with that. But it explains how one can do very well on tails and NOT get killed in the meantime.
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what i heard .. if it doesnt work out... he gets back.. between 60% - 85% of his capital.. ie. losing 15% to 40%
so yea.. slow bleeder that is..
 
MadeMan said:
what i heard .. if it doesnt work out... he gets back.. between 60% - 85% of his capital.. ie. losing 15% to 40%
so yea.. slow bleeder that is..
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iam on an experiment which somehow fit talebs teachings .. but in a different way
but then again.. its all "cut losses short and let winners run" .. except for the last two trades which i didnt managed according to my plan.. but hey! what eva..

they are still open .. so enough time to repair ;)

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MadeMan said:
iam on an experiment which somehow fit talebs teachings .. but in a different way
but then again.. its all "cut losses short and let winners run" .. except for the last two trades which i didnt managed according to my plan.. but hey! what eva..

they are still open .. so enough time to repair ;)

View attachment 156333
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xxx1.PNG
 
cdcaveman said:
alot of haters out there... haha....
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Just to go more into details on why people don't like him (and since you asked), here is an Amazon reviewer of his book:

"The author repeatedly reminds readers that he is well traveled, is a "voracious" reader, pursues his exercise routines "assiduously", and is from upper class Mediterranean roots. Further, at some points in the book, he writes from a bitterness and contempt (which he admits) for journalists, economics, others in his profession, and generally those who are not "literate persons"."

And this was a 3 stars review... Now here is a 1 star review:

"This author should be named Narcisist, not Nassim. The rest of the book is devoted to propping himself up in his own version of an occupational caste system, where he is on some higher plain because he fancies himself to be some sort of quant jock who knows basic statistics and probabilities. In the meantime, he manages to insult MBAs, academics, specific authors, people who live provident lifestyles, successful but "non-quant" traders, scientists (those with poor social and hygene skills), dentists, and on and on. Pompus, self-serving, and hollow."

I hope that answered your question... :)
 
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