probably be a good read

DSchles

Well-Known Member
#3
I dislike Taleb because a) he's a pompous ass, b) his theories are full of ****, and c) he hides under a rock for five years at a time, then resurfaces as soon as there is a market meltdown.

Everyone fawns over him like he's God's gift to mankind when, in the interim, the markets have gone up thousands of points.

He's a farce.

Don
 

sagefr0g

Well-Known Member
#4
@ XG?
it's understandable how many of those involved in academia, economic theory and finance dislike Nassim, he is critical about them in a pompous way. just mho but we all make mistakes (maybe even Taleb), and like DSchles mentioned in the
preface of his great book Blackjack Attack, he requested that, "Whereas every conceivable effort has been made to assure the accuracy of both the numerical calculations and text of this book, errors in a work of this size and complexity are, nonetheless, inevitable. Should you find any, I would be most grateful if you would convey those findings to the publisher, or to me directly." point being again, a'int nuthin perfect, academia, economists, financial advisers, physicists, you name it, just look at history. further point
being Nassim tends to call a spade a spade as he see's it. question being, how does a discipline improve if it doesn't respect and pay heed to critical thinking. like my fifth grade arithmetic teacher told me over and over and over again,
"did you check your math?" pretty much that's what Taleb is asking us all, just it's is in a pompous way.
well anyway, apparently someone in Mr. Thorp's camp respects Taleb, as Nassim's written a forward to his yet to be published book.
far as Thorp & Kelly having anything to do with blow ups in the market, just me maybe, i'd suspect it has more to do with the actions of nitwits than anything to do with Thorp or Kelly.
edit: and i guess, yes, as DSchles stated, the market has gone up thousands of points (taking his word on that) since the great blow up. gotta thank the FED for that one in great part, where they set it up so as the huge post war baby boomer population gets nothing risk free in their bank, while money hungry investors take the risk, once again in the market, driving it up. sigh.
oh, ah yea, i'm still around, sir :)

@ DSchles
with utmost respect sir, regarding your history (your writings have helped myself and doubtless a host of others immensely) , i none the less wish to venture with trepidation (out of the respect that i have for you) some counter points:

a) he's a pompous ass
we both agree regarding his pomposity. uhhmm does that mean our two fingers pointing at him equals eight fingers points at us two?:)

b) his theories are full of ****
at your leisure sir, an elaboration on that statement (rigorous but not too rigorous) would be appreciated and enlightening.

c) he hides under a rock for five years at a time, then resurfaces as soon as there is a market meltdown.
kind of like Wonging in and out, no? :)

but sir, a farce? just from my humble perspective, i see many valid points in his writings. so how a farce?

& finally, Don i apologize to you for my poor grammar, speilling, run on sentences and improper punctuation, i know you don't like that, but i had a great college english professor who got a kick out of such shenanigans.
and really i promise, finally, i promise i wont respond to any response you make regarding these matters, unless you direct a question towards me.
 
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DSchles

Well-Known Member
#5
Thanks for your reply. I'll keep it short. Don't you find it strange that in all of Fooled by Randomness and The Black Swan, there is hardly a single number or equation -- this from a man who pretends to be God's gift to financial markets? He just rambles on incessantly, preaching about how we all need to build fall-out shelters to protect us from black swans, but then, hypocritically, in his own trading, admits to selling time premium (mostly puts) -- the very antithesis of what he drones on about ("Do as I say, not as I do").

He doesn't offer a shred of numerical evidence that OTM options are actually underpriced, rather than overpriced, because he can't. They aren't. And, there are dozens of studies to prove that. He's just a blowhard with a one-track mind, and a flawed one, at that.

Don
 

sagefr0g

Well-Known Member
#6
DSchles said:
Thanks for your reply. I'll keep it short. Don't you find it strange that in all of Fooled by Randomness and The Black Swan, there is hardly a single number or equation -- this from a man who pretends to be God's gift to financial markets? He just rambles on incessantly, preaching about how we all need to build fall-out shelters to protect us from black swans, but then, hypocritically, in his own trading, admits to selling time premium (mostly puts) -- the very antithesis of what he drones on about ("Do as I say, not as I do").

He doesn't offer a shred of numerical evidence that OTM options are actually underpriced, rather than overpriced, because he can't. They aren't. And, there are dozens of studies to prove that. He's just a blowhard with a one-track mind, and a flawed one, at that.

Don
and thank you sir for your response, i'm truly honored.
answer to the question in your response. yes & no = nada
 

sagefr0g

Well-Known Member
#7
in case anyone is interested

the book Antifragile by Nassim Nicholas Taleb does have some arithmetic and the like in it, unlike The Black Swan and Fooled by Randomness.
quite a read, (lots of incessant rambling (to be sure) to the extent of boring one to tears), and still quite a read. imho, a must read for advantage players.
i say that at my twelve year point hustling casinos. i started rather late in life.
if you read all of my posts on this site you'll see i have the elements of a lost puppy in me. but, hey, i'm still here, stuffs been working for me, i've learned.
here's the main thing i like about Taleb's ideas. it's the idea of taking a position (a position of antifragility) for which you can only suffer small loss's over a period of time
while at that same time you can expect at some point to enjoy relatively large significant gains (gains that well outweigh the sum of those small loss's ,
all this while enduring a volatile environment. sound familiar? well there's more such ideas in the book as well. worth a read, i say.
 

DSchles

Well-Known Member
#8
The fundamental thesis is wrong -- namely that the small losses don't exceed the large, very infrequent gains. They do. They bleed you dry.

Don
 
#9
sagefr0g said:
the main thing i like about Taleb's ideas. it's the idea of taking a position (a position of antifragility) for which you can only suffer small loss's over a period of time
while at that same time you can expect at some point to enjoy relatively large significant gains (gains that well outweigh the sum of those small loss's ,
all this while enduring a volatile environment.
You mean he has a reverse black swan theory also?
 

sagefr0g

Well-Known Member
#11
@ XG
kind of surprised you weren't familiar with the idea of good black swans and bad black swans.
but really shouldn't come as a surprise, no? just being alive we experience ebbs and flows of all sort of stuff, no?
happens in the markets, no? what, since the great recession it's reported that the market has gone up thousands of points. like i'm sure you are aware professional financial advisers explain that historically the market has over time went up and up, sorta thing. but you should be patient and not scared out of the market as the process is slow and values go up and down but still historically the market has went up and up. that followed up by a document you sign, that has on it a warning that you could lose money.:eek:
but yes you look at the market graphs over time, lots of little loss's, lots of little gains, some big loss's, some big gains makes up that historical over time overall gain of the market. i'm sure you know that, lol.
but, this ebb and flow isn't just markets, it's all sorts of stuff in a vibrant volatile world. even if with the reign of entropy, we still enjoy such ebbs and flows.

hey, here's an example where the small losses do not exceed the large, infrequent gains, for which the small losses do not bleed you dry, an example of an antifragile position or state:
if you wong onto a blackjack table for which the true count is at an advantageous value, you may or may not win the hands you play before wonging out when the count becomes disadvantageous. this can happen repeatedly and repeatedly and repeatedly, but as you know if you keep doing this you eventually end up with big gains relative to those small loss's and to the sum of those small loss's.
meanwhile the regular players are sitting there losing money over time.
the wonger takes an antifragile position, while the regular players are in a fragile position.

there are loads of advantage plays where that antifragile, fragile relationship comes into play. positions where the small losses do not exceed the large, very infrequent gains. one example i can vividly recall was a game in which the antifragile guy only had to make 25 cent bets every 12 seconds or so over time and then would with near certainty receive a win of 200 times that 25 cent bet, but one would not have to make anyway near 200 bets. the vastly small losses did very much so not exceed the relatively large, very infrequent gains.
 

sagefr0g

Well-Known Member
#12
included with this post find a graph.
it is a graph of real world cumulative results of a series of advantage play events but with one what if caveat, the cumulative results have been sorted such that the events happened in time where wins are ordered from largest loss of an event on, and on, and on,.,.,., up to the largest win of an event. so that we have a nightmare scenario (not a black swan event, just a nightmarish order of events, sorta thing) of an AP losing, losing, seemingly nothing but losing, and then small wins, small wins, bit bigger wins, bit bigger wins, on up to largest win, sorta thing. out of nearly 1,200 events this poor whatif AP is underwater for almost 800 events. so this didn't really happen in this order (thank goodness:), it's just how it could of happened under i don't know what probability of nightmarish proportion. :eek:

so but anyway, notice the smiley face convexity of the graph. according to Taleb, that's a sign of antifragility.
so i dunno, how antifragile said play was, but it's somewhere with in the spectrum of antifragility intensity and types.
hopefully, this rant gives an idea of how i interpret Taleb's , thesis & books.

edit: also the Cubs won the series, now that is a black swan event :)
 

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sagefr0g

Well-Known Member
#13
same data, same nightmarish order, only this time the loss's are turned into wins and the wins are turned into loss's. (ie. the event values are multiplied by negative one)
resulting graph is a sad face, what Taleb would depict as a fragile state :(
 

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sagefr0g

Well-Known Member
#14
@ DSchles

the part where you stated, "namely that the small losses don't exceed the large, very infrequent gains. They do. They bleed you dry."
is absolutely correct imho. example (how the casinos keep picking away at blackjack rules, h17, no surrender, 6/5 bj, ect., ect,...) seems they just keep nickle & dimming us unto death.
thing is, we all gotta keep trying to do, is find a way to get around that fact, if we can. no?
 

sagefr0g

Well-Known Member
#15
so more on this graph stuff, starting to get interesting:
included with this post find a graph.
it is a graph of real world cumulative results of a series of advantage play events but with one what if caveat, the cumulative results have been sorted such that the events happened in time where wins are ordered from largest win of an event on down, and on down, and on down,.,.,., down to the largest loss of an event. vice-a-versa from post #12 above.
it's a kind of dreamy graph unlike the other that was nightmarish, but it does have that downward hook on the end.
here note that it's the same data, just sorted different, but it's a sad faced convexity! huh, does that mean the play wasn't antifragile after all?
so we have one extreme what if order for which the graph is convex, a happy face, denoting antifragility and a opposite extreme what if order for which the graph is concave, a sad face denoting fragility.
so what gives here? wouldn't this real deal advantage play be antifragile? :confused:
more to come..........,
going on a road trip.:cool2:
 

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sagefr0g

Well-Known Member
#16
Some more on antifrallity
here’s a bit of a definition from Wikipedia:
Antifragility is a property of systems that increase in capability, resilience, or robustness as a result of stressors, shocks, volatility, noise, mistakes, faults, attacks, or failures. It is a concept developed by Professor Nassim Nicholas Taleb in his book, Antifragile.
thing is i believe the ‘word’ defies definition. lol, after all, it’s not quite yet really a word, i don’t believe. and it may never be, may never should be. just me maybe, but i’d be willing to bet (if I weren’t so cheap and risk avers and gain crazy) that Taleb would deny the above definition. my guess is that definition is close but no cigar, sorta thing. and it should, imho be so. to me, it’s a philosophical bug one might wanna get in ones ear, sorta thing. far different than math stuff, more like philosophical stuff, more primal, like stuff that went on in our ancestors being that shaped and formed what we are at the core and separates us from other creatures, sorta thing. so moving on from there, is math stuff and concepts of advantage and the like important? well, hell yeah, so but this antifragillity thang is got almost a musical quality to it, difficult to define, but it’s for real there. perhaps, i’m wrong but I believe it has some utility. utility in the sense like what comes up out of ‘ah ha’ sorta experiences, that most likely we’ve all experienced. that sorta thing, where we are blind to something , perhaps for years and years, and then all a sudden, bingo, wowser, it pops up and there we have it, some new knowledge or trick up our sleeve that has real utility and value. so is there some math and equations hooked up with this new not a word antifragillity philosophical thang? i believe there is because Taleb messes with plenty of complex equations and maths. beyond me, i’ll just say, and frankly i for one wouldn’t much wanna go there.since there’s plenty of math stuff already hooked up with advantage play and the like. point being from Taleb’s writing, is be careful, lol. so is anything really, really antifragile? me thinks not. except perhaps for the universe or perhaps the universe plus God. but don’t worry, i won’t go there. heck guys and gals, kelly betting isn’t even antifragille, philosophically speaking, nor is the concept of advantage. lest we forget, that for example an electron can truly overcome an energy barrier that it doesn’t have enough energy to overcome, sorta thing, well, lets not fool ourselves, even the best of the best kelly bettors could blow up, and go bankrupt. there is after all still some percentage of risk of ruin there. so far as antifragillity, my take on it is things can be antifragille, up to a point.
sorry about all that rambling, bumbling blab 
all that so I can yak a bit about my graphs, I posted above, lol.
so here we go. i was bowled over by the fact that it was possible to produce a what if graph from the data of genuine advantage play that yielded a concave linearity, hence, indicator of fragility. but a bit of thought over the matter and sincerity over getting at the truth of the matter, and i believe a ‘crack in the cosmic egg’ occurred for me, i believe.. by the way, the book The Crack In The Cosmic Egg by Joseph Chilton Pearce is a great read (that said firewalking isn’t that much of a physical mystery, but the courage to do so, is ), imho. more rambling, I know, sorry. so but anyway, check the three graphs below.
so anyway, baffled, flustered, i tinkered some more, took the ‘nightmare scenario’, convex (antifragile) what if graph of cumulative win/loss data sorted so that largest loss, next largest loss,…, on up to smallest win, on up to finally the largest win was ordered as if it happened that way in real time and the ‘dreamy’, concave (fragile) what if graph of cumulative win/loss data sorted so that the largest win, next largest win,…, on downward to the smallest loss, next larger loss on downward to the largest loss was ordered as if it happened that way in real time as well, took those two graphs, merged them and made one graph, then took the cumulative win/loss data real time graph and merged it as well.
so what we have, is some insight into what didn’t happen but what could have happened, compared to what did happen, sorta thing. so what?, one might ask. well heck, i dunno. just me maybe, but it shows the spectrum of antifragility and fragility that is existent, behind the scene, the veil of what did happen, sorta thing. in other words, there are potentials beyond what we think we know as we experience our play and how we expect our play to unfold.
If you look at the final graph, it’s apparent that a huge multitude of non graphed lines could be transposed into that graph, within the bounds of the fragile and antifragile extremes. to where it’s obvious many, many kinds of potentials exist far as how things might unfold. it’s always a rosy ending far as this graph depicts, however, the fact that there is the extreme fragile element existent, it seems it would be wise that one remain critically cautious with respect to future events and consider measures to protect against sailing along oblivious to any hidden threats while all has gone so grandly in the past, sorta thing. that said, it would appear that continuously playing with the same advantage and conditions of state, given enough time (and bankroll, at least a big enough bankroll to live through that biggest dip on the graph) that one might sail around and around the outer extremes of the graph or within those extremes living life for the most part in the money. so it is, pretty much I guess how it is living within the walls of the casino, while playing with an advantage, all that said long as cracks in the casino wall don’t happen to where the world outside comes filtering in.
so anyway, just me maybe but it’s interesting how the real time events unfolded as a relatively near average of the two extreme whatif outcomes, sorta thing. one might ask, how is it i didn’t have to live in the ‘dreamy’ but fragile order of events or the ‘nightmarish’ but antifragile order of events and instead experienced the order of events such as they happened? my guess is that the ‘realm’ inside the two extremes is a probability space for which the average is pretty close to the in real time events unfolded. so in a sense the advantage drives the outcomes of each event with respect to other possible outcomes.
Apologies for any grammatical, speiling or conceptual errors, but my one eyed cat helped me type this out while he was trying to hustle a piece of my apple pie.
edit:, by the way my trip was nice, not much income, a bit, but heck a enjoyable time spent.
edit:, note: final graph looks like crack in the cosmic egg, sorta thing, lol
 

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sagefr0g

Well-Known Member
#17
more on that ‘crack in the cosmic egg’ graph, plus a generated ‘almost’ gaussian curve from the same data, and some example robust, fragile type 1 & type 2, and antifragile graphs from Nassim Taleb’s book Antifragile.

first off, notice the ‘cosmic egg’ graph has some shading (poorly done, i know) across the center of the up tilted egg. the shading represents the approximate area of the graph for which dynamically driven randomness was introduced to the event data’s order of occurrence (over thousands & thousands of perturbations). but, lemme digress, the red graph (ordered by real time order of events) pretty much within the average, shows some (i think) interesting points. notice, near the beginning the slope is rather meager, and even falls some, then there is a rather dramatic increase in the slope followed by an evening out but ever rising slope. the meager part was i believe impacted by the learning curve i endured plus the type of plays involved. the falling and flat line part involved, nature of plays, learning curve and even a bit of erroneous gambling. the dramatic increase in slope occurred when a plethora of great advantage plays and a concurrent degree of understanding of what the heck i was doing in the first place occurred simultaneously. then, the honey hole burst, those great plays disappeared followed by just what is currently the normal degree of advantage plays available, sorta thing. it’s interesting that the red real time event graph stays within the bounds of the antifragile area of the ‘cosmic egg’ graph, even with actions of ignorance, recklessness, failed experiments, just plain mistakes made and relatively low advantage at times. only thing i can come up with as a reason for this, is that apparently taking the position of truly seeking an advantage is an antifragile state and position. such a state, apparently doesn’t much care about ignorance, recklessness, failed experiments, just plain mistakes made and relatively low advantage at times. as i reckon Joseph Chilton Pearce (author of The Crack in the Cosmic Egg) might say, ‘it doesn’t so much matter what you do, as where your heart is’, sorta thing. the heart (your disposition and apparently the actual organ it’s self) is the real driving force. doesn’t hurt to have an advantage, either, i might add, lol. that said, ‘the road to hell is paved with good intentions’, so that fragile space of position and state, still is lurking, perhaps hidden in the back ground. properly understood information along with the heart being in the right place, is probably the key to gaining a antifragile position, imho.

so now end of digression and back to that shaded area in the ‘cosmic egg’ that is a what if representation of dynamically driven randomness that was artificially introduced to the event data’s order of occurrence. i don’t care how many random perturbations i allowed the graph to make, the trend line and generated what if graph would never cross the shaded area. wouldn’t even come close to the two extremes of the fragile and antifragile border of the ‘cosmic egg’. but just me maybe, i believe it could have. just it’s not probable, not enough possible combinations of the numbers to make it anywhere near likely to happen. those numbers are what they are, because of the chances taken and the advantage that was existent. actions based on whether plays were worth while, courage and conviction and information is what brought those numbers forth. but, in the what if world of the improbable but possible, is an interesting thought. that being, save for an improbable occurrence, it takes an act of non normal action (such as the act of creating an extreme what if graph) to even get into that realm. point being, you want antifragile?, well, apparently it’s necessary to impose some action or take some position to get there. ones gonna need, either a higher advantage, more plays over less time or somehow be able to get more money across the table, sorta thing, inorder to get more antifragile in a casino. so alas, it’s apparently like Taleb has written, extremistan doesn’t exist so much within the walls of the casino. hmm, tell Don Johnson that, lol.

so next this ‘almost’ gaussian curve, generated from my data. hey, look at that, which of the for graphs from Taleb’s book Antifragile does it look like? so alas, perhaps my play does fall somewhere within the spectrum of what’s antifragile. only other, point is a conjecture, not sure if i’m correct about. it just seems to me that the left tail circled in red on the ‘almost’ gaussian curve would be a representation of the extreme fragile portion of the ‘cosmic egg’ graph, while the right tail would be a representation of the extreme antifragile portion of the ‘cosmic egg’ graph.
cosmic-egg-jpg.8968
gaussian-jpg.8969
fragilityspectrum-jpg.8970
 

sagefr0g

Well-Known Member
#19
here's probably another good read:
Thinking, Fast and Slow
Book by Daniel Kahneman

ehhmm, have i read it, errr no
:rolleyes: it's on my list

edit: should be helpful regarding decision making & dealing with pit critters, competition, sorta thing.
 
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