A Man for All Markets
Institutions that are “too big to fail,” and have a significant risk of doing so, should be broken into pieces that are small enough to fail without jeopardizing the financial system. As Alan Greenspan finally admitted, “Too big to fail is too big.” This is a catchy sound bite but it misstates the real problem. It’s not the mere size of an institut
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Mnuchin was literally arguing to remove regulatory oversight for banks ($50B - $200B) at the end of January, and had no good answers to questions regarding how to assess the size of the risk this poses.https://www.thenation.com/article/here-comes-the-next-financial-crisis/
Players are confused about the inevitability of losing in the long term because they each play for a comparatively short time, which allows some of them to be lucky winners.
Edward O. Thorp • A Man for All Markets
A dealer making this hole-card check would typically bend up the corner of his two cards to see what was hidden underneath. Eventually the Aces and Tens would get slightly warped. If the dealer was especially careless or if decks weren’t changed often enough, the savvy player could spot the warps before they were dealt and know where the Aces and T
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Now that is devious.
Since I really had no predictive power, any exit strategy was as good or bad as any other.
Edward O. Thorp • A Man for All Markets
“When a lamb goes to the slaughter, the lamb might kill the butcher. But we always bet on the butcher.”
Edward O. Thorp • A Man for All Markets
The six of us left Las Vegas the next morning to drive back to Las Cruces. I was at the wheel as we went down a mountain road in northern Arizona. We were going sixty-five miles an hour when the accelerator pedal suddenly jammed. The steep downhill and the wide-open throttle were too much for the brakes. The car sped up to eighty miles an hour and
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...and even more-so to think of flying off a mountainside because your accelerator was mysteriously stuck. Yeesh.
This plan, of betting only at a level at which I was emotionally comfortable and not advancing until I was ready, enabled me to play my system with a calm and disciplined accuracy. This lesson from the blackjack tables would prove invaluable throughout my investment lifetime as the stakes grew ever larger.
Edward O. Thorp • A Man for All Markets
The threat to a buy-and-hold program is the investor himself. Following his stocks and listening to stories and advice about them can lead to trading actively, producing on average the inferior results about which I’ve warned. Buying an index avoids this trap.
Edward O. Thorp • A Man for All Markets
The #1 benefit of a good advisor is behavior modification. If you have somebody who is more disciplined than you, sitting at a level of detach meant from your finances, you think twice about discretionary purchases and trading.
In the abstract, life is a mixture of chance and choice. Chance can be thought of as the cards you are dealt in life. Choice is how you play them.