fat tails often create fat pitches
The context was in taking the other side of the new normal argument for lower returns with lower volatility. Montier cited Mandelbrot from the 1960s in noting that fat tails often create the best opportunities.
The post is chock full of jargonny buzzwords that I tend not to use in my thought process or my writing although maybe in how I invest. I think investors can make use of the concept even if they don't use words like covariance, a word I'm pretty sure I've never used before, in daily conversation.
All investors have at least occasional moments of clarity that most people otherwise miss. If you have one or two in a lifetime you are an ordinary person, nothing wrong with that, and if you have a bunch then maybe you are someone like Jeremy Grantham or Marc Faber. You should definitely read the commentary, you can decide for yourself how or if it is useful.
Merry Christmas!
3 comments:
I am sure some times fat tails are just the way things are at the time.
Other times I think fat tails are just a fancy mathematical way of say I have no earthly idea what is going to happen next :)
Merry Christmas to everyone!
"Fat tails create more opportunities" for what - to lose some of your principal, make above average returns or both? I'm guessing both and a steady hand is needed for the tiller during the next decade(ish).
Merry Christmas, Roger.
if you plan for retirement is to rely on a stream of money you have no control over and limited access to, i.e. pensions from corporate america to local or federal government pensions, better get yourself a 401k asap. 5 yrs down the road the rules will change on /how to get/how much can you can get/taxes on what you can get/ of your money out of a 401k plan, but at least it is your money in your account and you get to make some of the decisions.
pensions & social security = bernie madoff investment account (berni madoff investment account was real till it was not)
Post a Comment