Nassim Nicholas Taleb has sold millions of books and there are like 5 people on twitter who understand fat tail risk within context of coronavirus? He must be the most, "I pretended to have read him," author in history.
Most finance folks seem to live in a quant-bubble where they think the only fat tail risks that matter are endogenous to the economy. They seem outraged that anything from the oozy world of biology would intrude into the mathy world of economics.
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I've worked in finance and insurance, and I would say it's nearly the opposite. They believe that black swans only come from outside the economy, and that their effects will be limited to the direct impact of things like school and stadium closures. Missing second order effects.
Thanks. Twitter will use this to make your timeline better. UndoUndo
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Nope. I model portfolios and I don’t care about the source of the risk. I ask what-if questions like what happens if bonds crash or what happens if stocks crash. I don’t care why, only that they might.
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The whys are beyond my control and I can never cover all of them, no-one can. Whys don’t matter.
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