nntaleb: Education makes the wise slightly wiser, but makes the fool vastly more dangerous. [Overconfidence, Chapt 4]
Shared by JohnH
There’s no embed code for this video so go to the site to watch. Here’s a synopsis of what NNT states (he’s the 3rd speaker in this video)
Nassim Taleb: Go no-risk with a small percent and high-risk with the rest. For the speculative component, short the S&P and be long in precious metals; bet on hyperinflation with OTM calls on gold and puts on bonds; short USTs as long as Bernanke and Summers are in office; trade on the breakup of Europe. Russia is stable.
But you should see the clip, there’s more to it than that. Some funny stuff. Would like to see his statement transcribed and then a discussion on it… If I have time.
February 5, 2010
nntaleb: We ask “why is he rich (or poor)?” not “why isn’t he richer (poorer)?”;”why is the crisis so deep?” not “why isn’t it deeper?”. [Chapter 4]
nntaleb: We ask “why is he rich (or poor)?” not “why isn’t he richer (poorer)?”;”why is the crisis so deep?” not “why isn’t it deeper?”. [Chapter 4]
Shared by JohnH
I had thought we’d see more of these. I don’t know enough about investing to determine whether this protocol accurately represents NNT’s suggestions, but it’s a lot further along than I got on my own.
(BELOW THIS POINT I BEGIN TO EXPLAIN THE THEORETICAL FINANCIAL APPROACH FOR EMPLOYING BLACK SWAN PROTOCOL.)
In deploying black swan protection protocol for my portfolio, I begin by identifying the money I have that I do not wish to subject to the risks of the marketplace; in other words, money I absolutely do not want to lose. Next, I identify the amount of money that I want to deploy for the active component of the black swan protection protocol (I’ll explain what this component is momentarily). These two figures comprise the bookends of what Taleb calls the barbell strategy: extreme conservatism at one end, extreme risk taking at the other.