Tavakoli's smear campaign ag. Taleb

Quote from nitro:

This of course, is the correct question to ask. Mathematically, anyway.

Here is a typical options trader.

Year 1: Puts in $250k in account. Trades 2:1 and 4:1, make $250k for year. Takes out 250K.

Year 2: Has $250k in account. Trades 2:1 and 4:1, make $250k for year. Takes out 250K.

Year 3: Blows out $250k account. Goes back to Year 1. He is still ahead of game, but he blew out his account. If he lived beyond his means, he may be forced out of game completely.

And so on. People focus on the blowouts, instead of the expectancy. Does bleeding $1M for ten years, then making $20M, better, than making $1M for 20 years and then blowing out a $10M account? The expectancy is the same, but few could take year after year of losses to make it back once.
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Your option trader may well blow out in the FIRST year. There's no magic that says he will do so in, say, year 3 after having made a stash. Shortie referred to the risk adjusted return. I don't think you necessarily adjusted for risk.
 
Taleb is catering to the simple minds and below IQ-type of people looking to look smart by boasting an understanding of complexity (which they don't)
 
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