Friends, after a lifetime of dealing with a concept called Gambler’s ruin (and refinining it dynamically in “Dynamic Hedging”), it didn’t hit me that I was talking about it here, in connection with the zero-one law.

A series of finite bets, a la binary are immune to ruin if they are done right.

Let us reformat the idea of the PRECAUTIONARY PRINCIPLE (PP) within gambler’s ruin theory. The wiki page is not good, by the way as there are plenty of interpretations. The definition we can use is as follows: there is a class of dynamic strategies that never blow up, with probability 1, but they need to consist in finite bets (like binaries). And, the bad news, is that there is that will eventually lead to ruin, here ecocide and destruction, with probability 1.

We should code ruin aversion in the constitutions.

via Friends, after a lifetime of dealing… – Nassim Nicholas Taleb | Facebook.