Black Swan of Cairo

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Mike,

Hope this email finds you well. Just ran across a podcast by NPR Planet Money in which they talked about this one film producer whose formula is to make a lot of cheap movies, most of them losing money and a very few becoming serious block-busters like Paranormal Activity and Insidious. Its practically the exact approach you speak of with numerous losing trades but very few positive trades with huge amplitudes.

Lately I have been reading a book on the history of medicinal discoveries. There too, its the same pattern. Most random tests are useless but sometimes they find the “silver bullet” with no understanding of how or why the medicine works.

With that said, I would absolutely love to hear your thoughts on the LIMITATIONS of this one paper – Black Swan of Cairo. How do you differentiate between managed volatility vs the system shedding volatility due to structural changes in the system itself?

Your feedback in pointing me into the right direction would be immensely helpful.

Thanks again.
[Name]

I don’t see the limits. The paper is a clear view.

You might like my 2017 epic release: Trend Following: How to Make a Fortune in Bull, Bear and Black Swan Markets (Fifth Edition). Revised and extended with twice as much content. Out April 24th 2017.