Notes

study risk taking, not risk management

Informal. to use (one's money, talent, or other assets) to achieve a desired objective, as spectacular wealth or success: He parlayed a modest inheritance into a fortune.

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[verb] to bet or gamble (an original amount and its winnings) on a subsequent race, contest, [noun] a bet of an original sum and the subsequent winnings.

parlaying: transitive verb to increase or otherwise transform into something of much greater value She parlayed $5,000 and years of hard work into a multimillion-dollar company.

A small loss is a good loss,” and that risk mitigation and survival are everything in trading and investing. His words still ring true today: Take care of the losses; the profits will then take care of themselves. Profits matter only relative to the losses; stay in the game by protecting your capital base, your means of playing the game. Don't predict.

But they criticize what they can't understand; Examining the geometry of a die to estimate the frequency that any side will come up over repeated rolls is deductive reasoning. Reasoning in the other direction, by repeatedly rolling a die and using those results to estimate the geometry of the die, is inductive reasoning. Feynman's notable quip that “the philosophy of science is about as useful to scientists as ornithology is to birds.”

Hoe much time spend the stock in 1 standard deviation, how much in 2 etc

Unknown distribution

For stationary distributions, if the number of observations go up by N confidence grows only by the square of N. Non-stationarity distributions, like markets, have unknowable confidence.

I've never seen a rich forecaster

On the way up it’s great, but in markets, you take the escalator up and elevator down

Paying more than five times the price to sales for an investment may pose several potential problems for investors, including overvaluation risk, unstable earnings, market saturation, competitive pressure, and industry-specific factors. As such, investors must conduct thorough due diligence and consider various financial and non-financial factors before making any investment decisions

AMR funds move fast and unemotionally,” said McElligott. “They’re not parsing through earnings or taking a view on the stickiness of inflation … this is about price trends and momentum.”

Who’s Leading Who? Parag Thatte, a strategist at Deutsche, told the FT: “We do see their trading has a big impact on equities … they don’t tend to lead the market … [but] they tend to amplify moves that are already happening.” Notably, this train works in both directions, with algorithmic fund flows contributing to last year’s 19% drop in the S&P 500.

“a small loss is a good loss,” and that risk mitigation and survival are everything in trading and investing. His words still ring true today: Take care of the losses; the profits will then take care of themselves. Profits matter only relative to the losses; stay in the game by protecting your capital base, your means of playing the game. Don't predict.

Spitznagel Roundabout - Produktions Umweg. Austrian investing term

Delayed gratification or deferred gratification

victory comes not from waging the immediate decisive battle, but rather from the roundabout approach of seeking the intermediate positional advantage (what he calls shi), of aiming at the indirect means rather than directly at the ends.

roundabout investment approach, "one gains by losing and loses by gaining." This is Austrian Investing, an archetypal, counterintuitive, and proven approach, gleaned from the 150-year-old Austrian School of economics, that is both timeless and exceedingly timely.

Sensitivity & Scenario analysis Goal seek - risk asymmetric odds and asymmetric outcomes Asymmetric odds means that probabilities are not 50% for each event, but that the probability on one side is higher than the probability on the other. Asymmetric outcomes mean that the payoffs are not equal. confuse probability and expectation, that is, probability and probability times the payoff? Mainly because much of people’s schooling comes from examples in symmetric environments, like a coin toss, where such a difference does not matter. In fact, the so-called bell curve that seems to have found universal use in society is entirely symmetric. skewed bets post hoc ergo propter hoc: X happened because of Y.

Take loss when one point down, on upticks let it run

Compounding is what investors seek. Minimizing risk/volatility is wrong. Not blowing up is risk avoidances.