From http://www.gladwell.com/2002/2002_04_29_a_blowingup.htm:
Taleb, by contrast, has constructed a trading philosophy predicated entirely on the existence of black swans. on the possibility of some random, unexpected event sweeping the markets. He never sells options, then. He only buys them. He's never the one who can lose a great deal of money if G.M. stock suddenly plunges. Nor does he ever bet on the market moving in one direction or another. That would require Taleb to assume that he understands the market, and he doesn't. He hasn't Warren Buffett's confidence. So he buys options on both sides, on the possibility of the market moving both up and down. And he doesn't bet on minor fluctuations in the market. Why bother? If everyone else is vastly underestimating the possibility of rare events, then an option on G.M. at, say, forty dollars is going to be undervalued. So Taleb buys out-of-the-money options by the truckload. He buys them for hundreds of different stocks, and if they expire before he gets to use them he simply buys more. Taleb doesn't even invest in stocks, not for Empirica and not for his own personal account. Buying a stock, unlike buying an option, is a gamble that the future will represent an improved version of the past. And who knows whether that will be true? So all of Taleb's personal wealth, and the hundreds of millions that Empirica has in reserve, is in Treasury bills. Few on Wall Street have taken the practice of buying options to such extremes. But if anything completely out of the ordinary happens to the stock market, if some random event sends a jolt through all of Wall Street and pushes G.M. to, say, twenty dollars, Nassim Taleb will not end up in a dowdy apartment in Athens. He will be rich.
16 April 2008
Security
Wow, this is quite the security break. It breaks Flash.
Ruby/Rails/Web
I've spent a lot of time looking at ruby and rails this past few weeks. Looks interesting, but not for spare time. I think for spare time I'll go for SeaSide on Squeak.
Mac
XQuartz 2.2.0 released.
Chumby
It's meant to be Hacked.
6 April 2008
Infrastructure
Back to Debian, this time with Squid as a proxy for the kids web access. Works well.
Squeak
A port of Squeak to the Nintendo DS
Bruce O'Neel
Last modified: Thu Apr 5 13:42:07 MET 2007