Nonlinearity
Power laws. Pareto Principle. Tipping point. Critical mass. Exponential. Compounding Effect.
(Extracted from Fooled by Randomness by Nassim Taleb) There is another type of satisfaction provided by the option seller. It is the steady return and the steady feeling of reward—what psychologists call flow. It...
September 20, 2019|
Inversion, Investing, Nonlinearity
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(Extracted from Barking Up the Wrong Tree by Eric Barker) … there’s an 80/20 rule of sorts in networking. You probably met the vast majority of your friends through a handful of “superfriends”—the...
September 20, 2019|
Life, Nonlinearity
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(Excerpt from A Man for All Markets by Ed Thorp) Kelly’s criterion is not limited to two-value payoffs but applies generally to any gambling or investing situation in which the probabilities are known or can be...
September 19, 2019|
Investing, Kelly Criterion, Nonlinearity
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(Extracted from A Man for All Markets by Ed Thorp) The defect of VaR alone is that it doesn’t fully account for the worst 5 percent of expected cases. But these extreme events are where ruin is to be found. It’s...
September 19, 2019|
Investing, Nonlinearity
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(Extracted from Fooled by Randomness by Nassim Taleb) The best description of my lifelong business in the market is “skewed bets,” that is, I try to benefit from rare events, events that do not tend to repeat...
September 19, 2019|
Investing, Nonlinearity
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(Extracted from Atomic Habits by James Clear) Habits often appear to make no difference until you cross a critical threshold and unlock a new level of performance. In the early and middle stages of any quest, there is...
September 17, 2019|
Life, Nonlinearity
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(Extracted from Fooled by Randomness by Nassim Taleb) Our brain is not cut out for nonlinearities. People think that if, say, two variables are causally linked, then a steady input in one variable should always...
September 15, 2019|
Investing, Nonlinearity
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(Extracted from Antifragile by Nassim Taleb) If you put 90 percent of your funds in boring cash (assuming you are protected from inflation) or something called a “numeraire repository of value,” and 10 percent...
September 8, 2019|
Investing, Nonlinearity
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“It’s not whether you’re right or wrong, but how much money you make when you’re right and how much you lose when you’re wrong.” George Soros...
September 8, 2019|
Investing, Nonlinearity
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If you took our top fifteen decisions out, we’d have a pretty average record. It wasn’t hyperactivity, but a hell of a lot of patience. You stuck to your principles and when opportunities came along, you pounced on...
September 8, 2019|
Investing, Nonlinearity
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