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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (8763)	12/24/2006 2:15:31 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 24758

His strategy is dependant on things remaining pretty much the same as they have over the history of the market. to me, that sounds more like Niederhoffer's strategy. In other words, you are denigrating Taleb's strategy based on one observable outcome rather than the unobservable list of outcomes on which his strategy is based. i'm not "denigrating" his strategy. i agree with Taleb that the market underprices kurtosis. i also agree with his observation (really Kahneman & Tversky's observation) that most people are biased towards loss aversion. these two factors work in Taleb's favor and i think make his strategy intriguing. You've judged his strategy based on a single outcome rather than the validity of the "generator". btw, i myself employed a strategy akin to Taleb's, so if you knew my history you would know that i don't think his strategy is stupid and i'm not "judging" it as such. (i would not play Russian roulette with my head, but there was a time when i would play Russian roulette with a few year's savings if the upside was sufficiently attractive.) i was simply pointing out a (rather ironic) historical fact, not denigrating his theory for all time. Now Talib, having ended the torment of continual losses can live with the other torment of wondering if, on having abandoned a strategy, he left it just before it actually paid off. from what i heard, he got a pretty decent chunk of change, at least by the standards of 99% of Americans, if not the standards prevalent in Greenwich, CT. so his strategy did pay off, because the strategy itself became the thing that he sold. this paid off in the way diet books pay off for their promoters, not in the way, e.g., Buffett's strategy paid off through direct implementation. of course, if his main interest had been implementation, he would have been better off keeping his observations to himself. btw, in Houston there is an Omni Hotel that has "black swans" swimming in the pond out back. the hotel bar is called the Black Swan. i think they dye the birds as their underfeathers are rather white. don't know why he sold the fund, what most likely happened is he simply failed to attract additional capital, as capital tends to flow to those who have generated the best historical gains i don't know either, but if i had to guess i'd say it was a lifestyle choice. as a famous author, i doubt he had trouble attracting capital.