Thought of the day:
My friend said, "but when the time comes, can it be calculated"?
That 'it' that we were talking about was Risk.
Don't we go all-in?
or maybe when the times pushes us to the wall.
Here is the point number two in his essay Understanding Is a Poor Substitute for Convexity (Antifragility)
"2) A "1/N" strategy is almost always best with convex strategies (the dispersion property):
following point (1) and reducing the costs per attempt, compensate by multiplying the number of trials and allocating 1/N of the potential investment across N investments, and make N as large as possible. This allows us to minimize the probability of missing rather than maximize profits should one have a win, as the latter teleological strategy lowers the probability of a win. A large exposure to a single trial has lower expected return than a portfolio of small trials."
"take many small safe-to-fail bets".
In order words, avoid 'ruin'.
However, as pointed out by my friend, do we really have a choice to calculate when the testing times come?
My opinion is, difficult times do test us and when we take action; we gain with resilience.
Ruin or not, we always have a choice.
Even when the ships are burned, we have a choice. Die fighting or conquer.
My friend said, "but when the time comes, can it be calculated"?
That 'it' that we were talking about was Risk.
Don't we go all-in?
or maybe when the times pushes us to the wall.
What Daniel has been talking about in the tweet above, Taleb has termed as 'Convexity'.“Luck favors the prepared.” But what does it mean?— Daniel Vassallo (@dvassallo) June 23, 2020
I say it’s mostly about not being narrow-minded. Stop focusing on one precise grandiose ambition, and stop trying to predict what will work. Instead, inspire yourself from random things, and take many small safe-to-fail bets.
Here is the point number two in his essay Understanding Is a Poor Substitute for Convexity (Antifragility)
"2) A "1/N" strategy is almost always best with convex strategies (the dispersion property):
following point (1) and reducing the costs per attempt, compensate by multiplying the number of trials and allocating 1/N of the potential investment across N investments, and make N as large as possible. This allows us to minimize the probability of missing rather than maximize profits should one have a win, as the latter teleological strategy lowers the probability of a win. A large exposure to a single trial has lower expected return than a portfolio of small trials."
"take many small safe-to-fail bets".
In order words, avoid 'ruin'.
However, as pointed out by my friend, do we really have a choice to calculate when the testing times come?
My opinion is, difficult times do test us and when we take action; we gain with resilience.
Ruin or not, we always have a choice.
Even when the ships are burned, we have a choice. Die fighting or conquer.