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1) Risk is weird! It's hard to think about well. But it's really important to.

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Lost me at tweet 8

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yeah tweet 8 is weird and fucked up and also true If you flip 1 coin your EV is 0.5 and your risk is 0.5 (H=1, T=0) If you flip 100 coins your EV is 50, but your risk isn't 50--it's really unlikely you'll win all of them or lose all of them! Prob 45-55; your volatility is ~5.

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But if it was a large number like 10000 flips? The volatility would near zero to reflect the supposed 50/50 probability in the physics of a coin

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that's right, it would be 50%*sqrt(10000) = 50; so it'd be 5000 +- 50, which means within ~1% of 50/50

4:20 AM · Aug 29, 2020Twitter Web App