TIP 047 : The Black Swan (Investing Podcast)
We Study Billionaires - The Investor’s Podcast Network
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Diving into Non-Normal Distribution and Black Swan Theory
This chapter explores the prevalence of non-normal distribution in the real world, contrasting it with the educational focus on normal distribution. It discusses the Black Swan phenomenon and references the example of the Amaranth investment fund's failure despite having multiple risk managers. The importance of balancing book-smart and street-smart approaches in financial decision-making is emphasized, drawing on the author's Wall Street experiences and the critique of academia's reliance on traditional models.
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