Quotes About Risk

Whatever may need to be bailed out should be nationalized; whatever does not need a bailout should be free, small, and risk-bearing. We got ourselves into the worst of capitalism and socialism. In France, in the 1980s, the socialists took over the banks. In the United States in the 2000s, the banks took over the government. This is surreal.

in the event of its going down, it could go down a lot. Suddenly

Whenever your survival is in play, don't immediately look for causes and effects.

how rich you'd be today had you liquidated your portfolio at the height of the NASDAQ bubble).

with unknown side effects

try to benefit from rare events, events that do not tend to repeat themselves frequently, but, accordingly, present a large payoff when they occur.

the Black Swan is what we leave out of simplification.

Capitalism cannot avoid fads and bubbles. Equity bubbles (as in 2000) have proved to be mild; debt bubbles are vicious.

randomness, in practice, is what we don't know; to invoke randomness is to plead ignorance).

la acción del Cisne Negro se sitúa en Extremistán, no es más que una mera aproximación; les ruego que no la platonifiquen, no la simplifiquemos más de lo que sea necesario.

skin in the game is necessary to understand the world.

90 percent of all options expire as losses.

In the end this is a trivial decision making rule: I am very aggressive when I can gain exposure to positive Black Swans -- when a failure would be of small moment -- and very conservative when I am under threat from a negative Black Swan. I am very aggressive when an error in a model can benefit me, and paranoid when an error can hurt.

that meant that 90 percent of all short option positions make money. If I want to use options to be bearish, I sell calls.

investors are led to overestimate their chances of success.

George Soros, a complex man who thrived on rare events

One needs to go out and buy a lottery ticket in order to win. Does it mean that the work involved in the trip to the store caused the winning?

Knowing that you cannot predict does not mean that you cannot benefit from unpredictability.

which condition preceded the other.

In other words, I aim at profiting from the rare event, with my asymmetric bets.

It is more difficult to be a loser in a game you set up yourself.

Someone who predicts will be fragile to prediction errors.

And numerical prediction leads people to take more risks.

We have always been crazy but weren't skilled enough to destroy the world. Now we can.