[Twitter | X] Nassim Nicholas Taleb Conjecture Tested: Experiment Shows Results of Trading with News in Advance

Link to paper – papers.ssrn.com/sol3/papers.cfm?abstract_id=4965616

The Fourth Quadrant: a Map of the Limits of Statistics

Statistical and applied probabilistic knowledge is the core of knowledge; statistics is what tells you if something is true, false, or merely anecdotal; it is the “logic of science”; it is the instrument of risk-taking; it is the applied tools of epistemology; you can’t be a modern intellectual and not think probabilistically—but… let’s not be suckers. The problem is much more complicated than it seems to the casual, mechanistic user who picked it up in graduate school. Statistics can fool you. In fact it is fooling your government right now. It can even bankrupt the system (let’s face it: use of probabilistic methods for the estimation of risks did just blow up the banking system).

Link to essay – www.edge.org/conversation/the-fourth-quadrant-a-map-of-the-limits-of-statistics

[YouTube] Universa’s Bernoulli for Portfolio Simulation: Correcting the Empirical Distribution

The empirical distribution is not empirical, full of Turkey problems. “Real tails” do not show in past samples because of their property under fat tails. Empirical distributions are, by design, interpolating; we fix by extrapolating and extending the tails. Note the dispute: In French, Bernoulli is pronounced “Ber-noo-yi” not “Ber-noo-li”, much like consigliere is pronounced “consiyyere”.

[Twitter | X] ECONOMIC DISCUSSION: where does inflation come from when raw materials are roughly unchanged?

[Twitter | X] Nassim Nicholas Taleb on the Kelly Criterion and Mutual Information in Investment Settings