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Outliers, by Malcolm Gladwell

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chin:

--- Quote from: kido on 28 September 2009, 18:23:15 ---Haven't read the book, but because of this thread, I wiki the book and read the sort of preface.  Later I encounter this article which seems telling the same story as "why elite hockey player born in the first few month of the calendar".

It seems the more we dug from the statistical data, the more inclined in believing to the Chinese ancient wisdom 風水/命運.
--- End quote ---

Depending on what you mean by 風水/命運 and how people relate & react to 風水/命運 as told by the 'masters'.

It's one thing to appreciate & accept the randomness in life, it's different story to resign one's fortune entirely to 風水/命運, especially the more superstitious, deterministic view of life.

In the former case, you will still need to prepare yourself to take advantage of the opportunity arised. You still need to be smart, work hard, and willing to take risk. At the same time, you need to fully prepare for failure even though you are smart, worked very hard and took risk, simply because of wrong timing or a bad sequency of event happened. 

wongyan:
there is a book called "Good Luck".  A tale written by two Spanish that really gave me a different aspect on "good luck" versus "luckiness". 

kido:

--- Quote from: wongyan on 28 September 2009, 23:18:20 ---there is a book called "Good Luck".  A tale written by two Spanish that really gave me a different aspect on "good luck" versus "luckiness". 

--- End quote ---

Any explanation? 試舉例加以說明之。

wongyan:
as it is written in a tale format, it is hard to explain as different people may have different interpretations.   I can borrow the book to you if you like. It is also very light that you can finish it 1-2 nights.

chin:
My daughter really liked this book that she subsequently purchased all the other Gladwell books.

The latest one is What the Dag Saw. It's a collection of his essays, instead of a specially written book with a coherent theme. I am reading the part about minor heros - people who are obsessed with what they do and innovated greatly in their little corner of the world.

Since the book is really just a collection of unrelated essays, they can be read in a piece meal fashion without much problem. I am most fascinated sofar by the interview with Nassim Taleb, the author of Black Swan. I have read two of Taleb's books and knew that he's a fund manager. But he never talked about his exact strategies in his books, but hinted that he's not predicting the market, and cashing in one extreme events.

In this interview, it was revealed that the trading strategy involves buying (and only buying, not writing, or selling in layman term) varies out-of-money extreme event puts and calls. The basic idea is that other option traders are presumably pricing options contracts using normal distribution to predict extreme events. Whilst Taleb believes black swan events happen far more frequent than what normal distribution predicts - the tails are much fatter than assumed. With this strategy, which I assume the extreme event options are dirty cheap, he will constantly losing small amount of money every single day, hoping to make a killing in the extreme events.

If the financial markets are getting more and more volatile, which seems to be the case with more frequent market crashes, this strategy could work well. (It did worked well reportedly for Telab.)

The question on the option pricing is how cheap is cheap enough? And if he's not predicting the market, how does he assign probabilities to the extreme events and size his bets?

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