The Incerto Podcast Luca Dellanna | Ergodicity & It's Role In Taleb's Incerto
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Oct 4, 2023 Luca Dellanna, author and independent consultant, discusses the concept of ergodicity and its relevance in decision-making. Topics include fat tails and power laws, consultants lacking personal stakes, achieving big impacts with minimal risks, the power of compounding, collecting data, taking daily losses, and the role of serendipity in uncertain professions.
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Ergodicity and Time Horizons
- Ergodicity studies how time horizons affect decisions and strategies.
- The optimal strategy depends on the time horizon, not just the single instance.
Repeated Actions and Outcomes
- Repeating an action doesn't guarantee multiplied outcomes.
- Ergodicity helps identify actions that yield consistent returns over time.
Repeated Investments and Survival
- When investing or gambling repeatedly, consider survival.
- Avoid bankruptcy by adjusting risk based on your time horizon.