I want to start this review with 2 stories
- I read Nicholas Nassim Taleb’s Black Swan maybe 15 years ago and the premise was so powerful, it made a mark: you can’t prove some affirmations (everybody was certain there were absolutely no black swans, until there was a black swan)
- During a time of my life, I earned my living partly by preparing 3/5 years financial projections, using assumptions and past behavior as proxies: i don’t remember any of those projections ever behaving the way we predicted, the market always found a way to do its own thing
This book dwells into those subjects, narrating the events that transpired during some of the biggest market disruptions after the big bust of 2008.
Taleb is front and center with the Universa hedge fund (actually founded by a friend, Spitznagel), where they apply antifragile concepts to manage billions of dollars.
And this is what caught my attention: their strategy basically boils down to offering insurance premium to guard against catastrophic events, mostly market crashes.
So they lose money day after day, year after year, but not in huge quantities, until there’s a big market blowout, where not only they recover previous losses, they actually make some serious bucks.
There are other topics such as the pandemic, climate change, wars, gmo, always in the context of how to be prepared for these events.
Finally, and to my complete surprise, this book is about options trading, a topic that i’ve been exposed to, quite a lot lately.
Excerpt
Healthy investments are those that produce goods that humans need to consume, not flat-screen TVs,” he told the Wall Street Journal from near his family’s ancestral home in Amioun. “Stocks are not a robust investment. Make sure you have a garden that bears fruits.
