Possible Insight

Posts Tagged ‘Markets

Required Reading on Financial Crisis

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Remember Liar’s Poker by Michael Lewis about 80s Wall Street excess?  Well, he has a terrific article on some guys who saw the subprime meltdown coming and bet heavily on it.  It’s great narrative and a reminder that whenever someone’s model departs substantially from reality, there is an arbitrage opportunity.  Hey, maybe we should rename this blog “Reality Arbitrage”.

Written by Kevin

November 12, 2008 at 6:54 pm

Posted in Markets, Models

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What I’m Working On: Supercharging Innovation

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[EDITED 05/08/2009: see here] If you’ve been following my posts on the financial crisis (here, here, and here) and Singularity Summit (there, there, and there), you might wonder, “Uh, but how do we get there from here?”. It’s pretty obvious to me that the the road to economic advancement is paved with innovation. So we have to innovate our way from here to there.

I’m pretty sure I’ve figured out a way to supercharge what I call the “Innovation Economy”. My thinking was catalyzed by reading Nassim Taleb‘s The Black Swan. The basic idea is simple: if we want more groundbreaking firms like Google to come out of the Innovation Economy, we have to shove more startup feedstock into it.

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Written by Kevin

October 31, 2008 at 9:33 pm

Don't Cop Out on Knightian Uncertainty

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I apologize for the posting lull. I actually spotted an issue than I wanted to address a few weeks ago, but I’ve been pondering how to approach it.  It’s pretty complicated and subtle.  I even ran a couple of drafts by Rafe to refine my thinking.  So please bear with me.

As I’ve mentioned before, I am a fan of Dave Zetland. When I saw him propagate what I think is a fundamentally false dichotomy in this post, I knew I had to take on the concept of Knightian uncertainty. It crops up rather often in discussions of forecasting complex systems and I think a lot of people use it as a cop out.

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Written by Kevin

September 19, 2008 at 7:00 pm