Veles
@velesxbt • 7,329 subscribers
Quant, math & AI. Studying the patterns that survive the noise.
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A billionaire trader has spent 40 years trying to delete a one-hour documentary. It shows him making $100 million in a single afternoon. He predicted the crash that made it possible three months in advance. He has never explained why he wants the film gone. His name is Paul Tudor Jones. The film is on YouTube. The documentary is called "Trader." PBS filmed it in 1987, three months before Black Monday. Jones was 32 years old, working from a small New York office, wearing shorts and a t-shirt, yelling at his phones, throwing paper across the room, and sleeping under his desk. The film captures him and his research partner Peter Borish overlaying a chart of the 1929 market on 1987, month by month. The two charts tracked within one percent. Borish said this is exactly what happened in 1929. Jones said if the analog holds, October is when it breaks. On October 19, 1987, the Dow fell 22.6 percent in a single day. It remains the largest one-day percentage loss in stock market history. That afternoon, Tudor Jones covered his shorts and made roughly $100 million. He was 33 years old. He was one of the very few traders on the street who came out ahead. He tried to bury the tape because it made him look reckless in a professional world that punished swagger. Twenty years of legal effort did not delete it. Someone kept a copy. It is on YouTube. It has fewer views than most makeup tutorials. The film is not really about a crash. It is about a specific philosophy of trading. Jones is shown building conviction slowly, sizing carefully, then striking hard when the setup arrives. He is never once shown making a random bet. He is shown doing the same thing five times a day, every day, for three months. His signature line, repeated across a 45-year career: "The most important rule of trading is to play great defense, not great offense." He does not try to be right. He tries not to lose. He sets stops tight, cuts positions fast, and never averages down on a loser. Every trade in the film follows this template. Tudor Investment Corp, the fund he founded in 1980, has compounded at roughly 19 percent a year for 45 years. He is 71 years old and still trading. His method has not changed since the film. The lesson: greatness in markets is a refusal, not a talent. Refusal to be reckless. Refusal to be certain. Refusal to average down. Refusal to trust yourself in a drawdown. Tudor Jones has refused those refusals for 45 years. The tape is free. The philosophy is repeated in every trade. Most traders will never watch it.
Veles3,650,573 görüntüleme • 2 ay önce
A Stanford mathematician who spent 10 years as a professional magician just described the market in one sentence: "I've spent my life on two tricks: making a rigged deck look random, and making a random one look rigged. The market is the first trick, and almost nobody catches it." That's Persi Diaconis. He has a free lecture that asks one question: does anything actually happen at random? The answer is: far less than you think. The market is his first trick in the wild. It looks like pure chance. Buried inside is a faint rig, a 50.75% tilt no eye can see. Your gut reads a losing week as a broken system and a hot streak as skill. Wrong both times. The tilt is invisible to human intuition, which is exactly why funds hand the decision to the math. None of it is hidden. Diaconis has taught it for decades. The probability goes back to 1713. The lecture is free. Here's the trap: you feel every win and every loss, but you cannot feel the average. And the average is the only thing that pays. It takes thousands of trades for a 51% edge to separate from luck, and almost everyone quits long before then. The math is free. The patience to trust it past your own eyes is the edge.
Veles2,190,136 görüntüleme • 2 ay önce
In 1984 a guy got kicked out of every casino in Vegas for counting cards. So he flew to Hong Kong with $150,000 and started betting on horses instead. He walked away with almost a billion dollars. It's Bill Benter. He figured horse racing was just another counting problem. Same math, more moving parts. He and a partner showed up with $150k and a computer. Benter spent years teaching that computer to guess one thing: the real chance each horse had to win. If his number was better than the odds the bookies gave, he bet. If not, he skipped it. That's the whole trick. Expected value: EV = p · b - (1 - p) Only bet when your win chance p, at odds b, is worth more than your chance of losing. That's it. None of this was secret. What Benter used is the first probability lecture at MIT - the clip here, Professor Tsitsiklis writing the basic rules on the board. Freshman stuff. Now people call it a "one-person hedge fund" and sell you a bot to run it. Same edge. It was always just the math nobody bothered to learn.
Veles499,937 görüntüleme • 1 ay önce
Flip a coin. Heads, your account goes up 50 percent. Tails, it goes down 40 percent. Expected value is plus 5 percent a flip, so you take the bet a hundred times. Expected value says your $10,000 becomes $1.3 million. The most likely path leaves you with $52. An MIT professor explains the entire gap in one sentence, in a free undergraduate lecture, then moves on like it was nothing. His name is John Tsitsiklis. He teaches undergraduate probability at MIT. He also proved in 1994 that Q-learning converges, the result that says the algorithm under modern reinforcement learning does not merely happen to work, it has to. INFORMS gave him the von Neumann Theory Prize for that line of work in 2018. He runs the lecture on the students for an hour. First he takes the average apart. A random variable is not a number, it is a function. A bar graph of probabilities is a PMF. Expectation is the center of gravity of that bar graph, the single point where you slide a pen underneath and the thing balances. He is slow and patient about it. By minute 35 you trust the average completely. Then he stops and says he wants to give "one general word of caution." "The average of a function of a random variable, in general, is not the same as the function of the average... in general, you can not reason on the average." Everything before that sentence was the trap. Go back to the coin. Compounding is not addition. Up 50 then down 40 is not plus 10. It is 1.5 times 0.6, which is 0.9. You are down 10 percent. Do that 50 times each way and you have 0.9 to the fiftieth power. Fifty-two dollars. So where did the $1.3 million go? It is real. It is parked at the very top of the distribution. Run the hundred flips and only about one path in seven finishes above where you started. Only about one in a hundred ever reaches that $1.3 million. Those few runs are gigantic, and they carry the average for everybody else. You will not be in them. In February 2018 that trade had a ticker. XIV, short volatility, $1.9 billion in it. It had paid on the average day for seven years. On February 5 the VIX rose 115.6 percent, the biggest one-day jump ever recorded. XIV went from $115.55 to $4.22 overnight. Credit Suisse shut the note two weeks later. Nobody in it was wrong about the average. They were wrong about which path they were standing on. The usable version: your compound return is your average return minus roughly half your variance. A system averaging 20 percent a year at 40 percent vol does not compound at 20. It compounds at 12. That missing 8 is not fees or slippage. Tsitsiklis delivers the most expensive sentence in finance, finishes the variance section, and ends with "see you on Wednesday." The lecture is free. The average is free. Knowing which path you are standing on is the trade.
Veles630,438 görüntüleme • 2 ay önce
Ed Thorp beat blackjack. Caught Madoff seventeen years before the SEC. Predicted Buffett would be the richest man in America. Compounded twenty years without a losing quarter. He is 93. Everything he did came from one paper written in 1956. The paper is still free. Almost nobody has read it. Vegas, 1961. Thorp is 28. He walks into Claude Shannon's MIT office asking for five minutes. Shannon, famously impossible to see, gives him the five minutes and stays for two years. Together they build the world's first wearable computer to beat roulette. It works. 9:58 The Buffett lunch, 1968. Thorp reads John Kelly's 1956 sizing paper. Meets Warren Buffett once. Walks away and tells his wife Buffett will one day be the richest in America. Sixty years later, exactly that. Thorp did the math on a person applying compounding to time. Same math as Kelly. 31:20 The one thing Thorp added. Kelly's paper gives you the mathematical maximum bet. Bet Kelly, optimal growth. Bet more, you die. Thorp bet half. Half Kelly gives up a fraction of growth for a huge cut in drawdown. Full Kelly routinely produces 40-60% drawdowns. Half Kelly usually keeps them under 20%. Same edge. A fraction of the pain. Every serious quant who survives uses half Kelly or less. The ones who don't are the blowup stories. Princeton Newport, 1969-1988. Nineteen straight years. 19-20% a year. Not one losing quarter. Kelly's paper, Shannon's math, half Kelly's number, and discipline nobody else could imitate. Madoff, 1991. An investor asks Thorp to check Madoff's returns. Days later, he has proof of fraud. He hands the SEC a memo. They file it. Seventeen years later Madoff collapses. Sixty-five billion in losses. The memo had been on someone's desk since 1991. 48:10 Enough. Thorp shut down Princeton Newport at its peak in 1988. Still compounding 19% a year. He walked away. "You can have enough. And it's better than not having enough." This is the layer nobody sells. Every course, every AI swarm is built to make you want more. Thorp read Kelly, sized his bets, made his money, and stopped. Almost nobody in his field ever has. Half Kelly on the size. Full self-awareness on when to walk. That is the formula. 2026. Thorp is 93. He still writes. He still teaches. The math was the easy part, he'll tell you. The signal was never the edge. The sizing was. Half of it. The paper has been in the Bell Labs library since 1956. It's still there. It's still free. Madoff was the loudest receipt. The stack takes new tuition every quarter.
Veles637,153 görüntüleme • 2 ay önce
Every financial crisis of the last 25 years has been the same math mistake. A British mathematician explains it in 60 seconds using 100 bottles of beer. He has been trying to tell Wall Street for 30 years. Nobody has moved. You need 100 bottles of beer for a party. One bottle costs £1. What do you pay for 100? If you said £100, you just made the mistake that has crashed Wall Street four times since 1998. The real answer is: you have no idea. Depending on where you buy, it could be £80 for a bulk discount. Or £200 at the only shop still open. Almost never exactly £100. His name is Paul Wilmott. He is 66. Oxford math PhD. He wrote the textbook every serious quant reads. He founded the Certificate in Quantitative Finance program in 2003 and has trained thousands of the people now working at the biggest banks in the world. He said it out loud in a 2010 documentary. The film is called "Quants: The Alchemists of Wall Street." VPRO in the Netherlands made it. It runs 50 minutes. It is on YouTube. The industry ignored the film for 15 years and counting. The specific mistake Wilmott keeps warning about has a name. It is called linearity. Almost every financial model assumes doubling the input doubles the output. Twice the leverage, twice the return. Half the risk, half the loss. The real world does not work that way. The market really does not. Long-Term Capital Management figured this out in September 1998. Two Nobel Prize winners were on its board. Their model assumed correlations between markets would stay stable. In August, Russia defaulted. Correlations went to one. Every position moved against them at the same time. They lost $4.6 billion in six weeks. The Fed had to organize a bailout. The same failure has repeated every 8 to 10 years since. Subprime CDOs in 2008. Volatility funds in 2018. Silicon Valley Bank in 2023. Different math. Same mistake. Wilmott called it in 2010 with beer. He is still writing. He is still teaching. His students still get hired. Nothing has changed.
Veles215,457 görüntüleme • 2 ay önce
There's a formula that turns the worst hand in poker into a winning one. Doyle Brunson ran it in his head and won two world championships with a ten-deuce. Computers didn't confirm he was right until 40 years later. He did it in 1976 and 1977, back to back. Same two cards - the worst hand in poker, the one every amateur throws away. Same full house both times. They called it the luckiest run alive. It wasn't. Brunson had boiled the game down to one number: how often the other guy folds. Push it high enough and the cards in your hand stop mattering. He was running expected value in his head before anyone had a name for it. Then he wrote it down. His 1970s book turned poker from a gambler's game into a math problem, and every solver built since has proved him right. He breaks down the hands himself below.
Veles128,215 görüntüleme • 1 ay önce
Claude Shannon ran his personal stock account at 28% a year for 30 years. He's also the man who mathematically proved the ceiling above every filter the thread above is selling. Both facts have been sitting in the same library since 1948. Shannon didn't beat the market with a smarter moving average. He didn't beat it with a swarm, a neural net, or the sharpest filter of his generation, and he could have built any of them in an afternoon. He beat it because he understood the one thing the industry has been quietly ignoring for 78 years: no filter, no matter how clever, can pull more signal from a channel than the channel actually holds. The market channel is almost pure noise by design. Every real edge gets arbitraged toward zero the moment enough people find it. A better filter doesn't create signal that wasn't there - it rounds noise into a shape that fools you into betting on it. Shannon compounded like that because he was ruthless about which channels still had signal left, and disciplined about how much to bet when they did. The filter came last. It always comes last. Build the filter. It's a fine tool. Just remember there's a ceiling above it no engineering can lift, and the part that finds signal before it decays - that part, you still have to bring yourself. Shannon wrote it down in 1948. It's still free. The lesson has been sitting there for 78 years.
Veles208,830 görüntüleme • 2 ay önce
In 1961, two MIT professors beat roulette in Las Vegas. Not by counting. Not by luck. With a shoebox of transistors taped to their stomachs. Their edge was 44 percent over the house. The casino never figured out how. One of them invented the mathematics behind the internet. The other invented the modern hedge fund. His name was Claude Shannon. Yes, that Claude Shannon. In the summer of 1961 he built the world's first wearable computer in his basement in Cambridge. He wore it into a Nevada casino under his shirt. His partner was a 28-year-old math professor named Ed Thorp. Thorp tapped his toe when the ball passed a mark. Shannon's computer did the physics. It sang the answer into Thorp's ear as one of eight musical tones. Which quarter of the wheel the ball would land in. It worked. They tested it in Reno, then took it into the pit. The edge held. The device is now in a glass case at the MIT Museum. Credited as the first wearable computer in history. They quit after a few trips. The earpiece wire kept breaking. And in 1961 the wrong pit boss noticed and things got physical. Shannon wanted no part of that. He was a professor. Thorp had no such problem. He took the math to blackjack, wrote Beat the Dealer in 1962, and by 1964 every casino in Nevada had rewritten the rules to stop him. In 1969 he opened Princeton Newport Partners. Nineteen years. 20 percent a year. No losing quarter. Shannon went back to Cambridge and ran his own money. His personal portfolio compounded at 28 percent a year for 30 years. Better than any fund manager alive at the time. Nobody knew until his wife opened his books after he died. Two MIT professors. One shoebox. One summer in Nevada. The blueprint for the entire hedge fund industry. Thorp is 93. Shannon died in 2001. The shoebox is behind glass in Cambridge. Vegas learned to change the rules. Wall Street never did.
Veles141,490 görüntüleme • 2 ay önce
The Bank of England spent every foreign reserve it had trying to defend the pound on September 16, 1992. One hedge fund broke it by tea time. The fund made about $1 billion in a single afternoon. UK taxpayers lost £3.3 billion. Most people credit George Soros. The man who actually built the trade was 39 and had been working on it for six months. His name is Stanley Druckenmiller. He was Soros's lead portfolio manager at Quantum Fund. He is 73 now and still trading. Druckenmiller had been watching the pound since spring. Britain had joined the European Exchange Rate Mechanism in 1990. The rules were simple. The pound had to stay pegged inside a fixed band against the German mark. If it slipped, the Bank of England had to buy pounds and raise rates to defend it. Druckenmiller saw the flaw. Britain was in recession. Germany was booming after reunification and had raised rates to fight inflation. The pound needed to fall against the mark to help the British economy. The ERM said it could not. The Bank of England was defending a peg that fundamentals said should not exist. He built a short position through the summer. Around $1.5 billion at first. Big but not enormous. On the evening of September 15, Helmut Schlesinger of the Bundesbank made comments to journalists suggesting the pound was weak. The wire hit Druckenmiller's desk. He walked into Soros's office and said this was the moment to press. Soros told him to go for the jugular. He wanted the trade sized to $10 billion. Then $15 billion. The next morning the Bank of England started buying pounds and selling marks to defend the peg. It raised rates from 10 to 12 percent at 11am. Raised again to 15 percent at 2:15pm. Neither move stopped the selling. By early evening the government announced Britain was leaving the ERM. The pound crashed. Quantum closed the trade over the next few days. Total profit around $1 billion. The Bank of England was gutted. Druckenmiller went on to compound at over 30 percent a year for 30 years and never had a losing year. The BBC documentary about the day, made in 1997, is on YouTube. The story is not really about Soros. It is about correct analysis, patience through the summer, and having a boss who tells you to size up when the setup arrives. Every trader who has read it since 1992 has looked for their version of it. Nobody has found one that big.
Veles138,041 görüntüleme • 2 ay önce
The most valuable stock tip in Wall Street history was given for free in June 1983, in a tent in Aspen, by a 28-year-old founder whose flagship product was seven months from launch. His name was Steve Jobs. Nobody in finance was in the audience. Warren Buffett did not buy the stock for another 33 years. A $1,000 position that day is worth over $2 million now. The venue was the International Design Conference. Theme that year: "The Future Isn't What It Used to Be." Jobs waited at the back of a big canvas tent on the morning of his talk, holding a stack of slides, listening to the crowd file in. He walked to the mic and spoke for an hour to a few hundred designers. Most of them had never touched a computer. He read them a list of things that did not exist yet. Networks that let a computer in California send software to a buyer in Nebraska. Radio waves so any device could talk to any other without a cable. A computer light enough to carry in a briefcase and cheap enough that a family bought one instead of a second car. Voices for input. Screens for storage. Objects on desks in every home. The web was six years away. WiFi was 16. The App Store was 25. He described all of them in one hour. The Macintosh was seven months from launch. IBM ran the industry. Retail chains had started throwing Apple boxes into the back room. Wall Street analysts were writing that Apple would not survive the decade. Jobs told the designers to build the thing anyway. "We have an opportunity to do it great or to do it so-so. And what a lot of us at Apple are working on is trying to do it great." Apple stock that morning traded at roughly 10 cents on a split-adjusted basis. It sits above 200 dollars now. That is a two-thousand-bagger. The roadmap was already read out loud in a tent, in front of a crowd that had no idea what to do with it. None of them wrote it up. No one on Wall Street picked it up. The cassette recording sat in a designer's moving box for decades before it surfaced online. Warren Buffett bought his first Apple share in 2016. Thirty-three years after Jobs told the room what he was building. The trade was not the stock. The trade was believing a 28-year-old with the Mac still unshipped when he described the next 40 years. Every generational winner sounds like a crank until the proof arrives. The market pays whoever can tell a crank from a builder before the ticker moves. Jobs is dead. Apple is worth over three trillion dollars. The tape is free. The vision was free. The patience to trust it before the tape leaks is the edge.
Veles95,205 görüntüleme • 2 ay önce
On February 5, 2018, a fund called XIV lost $2 billion in fifteen minutes. Retail owned it. A Yale Nobel laureate had explained the exact trade that killed it on YouTube seven years earlier. Nobody watched. Nobody warned them. Every option seller alive is still running a version of the same trade. The Nobel laureate is Robert Shiller. He won in 2013. His Yale course is ECON 252, Financial Markets. Lecture 17 is on options and runs 71 minutes. Shiller walks through the Black-Scholes derivation, then does something no other professor does. He puts implied volatility next to realized volatility on the same chart. The gap is obvious. The gap is the trade. Implied vol is what people pay for options. Realized vol is what actually happens. For 30 years the VIX has averaged 4 points higher than realized S&P vol. That gap is called the variance risk premium. It means the average put buyer pays a 4 vol overcharge above what the market actually does. Selling that overcharge is one of the most persistent edges in finance. It works for years. Until it does not. XIV was that trade in a ticker. It compounded 40 percent a year from 2011 to early 2018. Retail piled in. Assets crossed $2 billion. On February 5, 2018, spot VIX doubled in a single session. XIV lost 96 percent between 4pm and after-hours. Credit Suisse pulled the plug two weeks later. Holders got pennies. Shiller had drawn the tail seven years earlier. He named it. He told a room of Yale undergrads that anyone selling this without a hedge would eventually give it all back. The section is six minutes long. It is on YouTube. Shiller is 80. He still teaches at Yale. ECON 252 has been free since 2008. The lecture is free. The trade is real. The tail is what killed them.
Veles84,823 görüntüleme • 2 ay önce
In 1991 a mathematician looked at Bernie Madoff's returns and said they were mathematically impossible. Everyone else took 17 years and 65 billion dollars to agree. His name is Edward Thorp, and by then he had already broken three systems the world called unbeatable. He started with blackjack. Working on an IBM computer, he proved the deck has a memory - as cards leave the shoe the odds shift, and a player who counts can turn the house edge into his own. He published it in 1962. The book sold over a million copies and forced casinos across Las Vegas to change their rules within a year. Then he beat roulette with a timing computer hidden inside his shoe, built with Claude Shannon in 1961. The first wearable computer ever made. Then Wall Street. His fund compounded around 20% a year for 19 years with not one losing year. So when Thorp said a number was fake, it was not an opinion. It was arithmetic. Madoff was simply the one nobody else wanted to check.
Veles32,318 görüntüleme • 24 gün önce
Paul Tudor Jones predicted the 1987 crash and made $100 million shorting Black Monday. He is 71 years old and still trading. He just gave a new interview where he names the two things that will trigger the next 1987-scale event. Most traders are watching neither. Tudor Investment Corp, the fund he founded in 1980, has compounded at roughly 19 percent a year for 45 years. He is one of the four or five people alive who have done that continuously. The interview is with Patrick O'Shaughnessy. Jones's two warnings: One, the U.S. debt bubble. The government is running fiscal deficits at a pace historically reserved for wartime. He has seen bubbles before. He has never seen a debt structure that could not be reversed by a rate cut. This one, he says, is not reversible without pain that voters will not accept. It ends the same way every debt bubble in history has ended. Not this year. Not next. But it ends. Two, unregulated AI. He has been early on every major macro move for 45 years, and he says he has never been more concerned about a single technology in his career. He is not worried about AI taking jobs. He is worried about AI making mistakes at speeds no human can supervise. He has publicly called for regulation because he believes the alternative is a market event that makes 1987 look modest. His trading rule has not changed in five decades: "The most important rule of trading is to play great defense, not great offense." He does not try to be right. He tries not to lose. He sets stops tight. He cuts positions fast. He never averages down on a loser. His return record is not built on being clever. It is built on refusing to be dead. He also spent much of the interview talking about the Robin Hood Foundation, which he co-founded in 1988 to reduce poverty in New York. His advice for the next generation was to find significance outside of money. The last words of the interview are: kill them with kindness. A man who has shorted markets for 45 years ends every conversation with an argument for kindness. That contrast is the whole post. Greatness in markets is not a talent. It is a refusal. Refusal to be reckless. Refusal to be certain. Refusal to be indifferent. Tudor Jones has refused all three for half a century. The interview is free. The warnings are specific. Most people will scroll past both
Veles91,408 görüntüleme • 2 ay önce
In 1988, Jim Simons flew to Berkeley to beg a math professor to fix his hedge fund. The professor had never traded a stock. He had spent his career on coding theory and mathematical board games. He agreed to help on the condition he could leave when he wanted. He delivered 55 percent net in his full year running it. Then he handed the whole thing back and went home to teach undergraduates. His name was Elwyn Berlekamp. He is one of two people who ever ran what would become the most profitable trading operation in history. Simons was the other one. MIT math PhD, 1964. Berlekamp wrote foundational papers in coding theory that still run every CD, DVD, satellite link, and QR code on Earth. The Berlekamp-Massey algorithm, published 1968, is why every scratched CD you owned still played through to the end. He also co-wrote "Winning Ways for Your Mathematical Plays" with John Conway and Richard Guy. Four volumes. It became the foundational text of combinatorial game theory. Berlekamp thought about board games the way most mathematicians think about theorems. He proved endgame results in Go that professional masters had assumed were unprovable. His 1994 book "Mathematical Go" reduced the last moves of a Go game to a formula. Top-ranked professionals started studying it. Simons had a problem in the late 1980s. His trading partnership was falling apart. The fund was losing money. He flew west to see the game theorist. Berlekamp bought a controlling stake, cut what was not working, and rebuilt the trading logic from combinatorial game theory principles. The fund returned 55 percent net after fees in his full year running it. In December 1990, Berlekamp sold his stake back to Simons and walked out. He wanted to go back to Berkeley. In interviews he said the same thing many times, in different words: Berkeley was where he belonged. Simons kept building on the system Berlekamp rebuilt. It became the Medallion Fund. Over the next 30 years, Medallion compounded at roughly 66 percent gross per year. It is the most profitable trading strategy in the history of finance. Berlekamp took his cut in 1990 and never went back. He spent the rest of his life at UC Berkeley. He gave a lecture called "Mathematics and Go" that is on YouTube. He died in 2019, aged 78. The paradox is not that Berlekamp made a fortune. It is that he had the door to the biggest fortune in trading history held open for him and walked out. The math was fun. The billions were not.
Veles73,226 görüntüleme • 2 ay önce
A man who has made 19% a year for forty-five years spent most of them telling people Warren Buffett was just lucky. Then he listened to a podcast and apologised on air. "Wow, this guy is a genius, and I've been the biggest fool all along." That is Paul Tudor Jones. His original argument was never stupid, which is the part worth staying for. Buffett, he thought, was in the right place at the right time, riding the longest bull market in history. Put the same man in Japan starting in 1989 and see how well the genius holds up. It is a real objection. The Nikkei peaked in December 1989 and did not get back there until February 2024. Thirty-four years underwater. Buy and hold would have ruined you. He changed his mind anyway. He now calls Buffett the OG of compound interest, and then he says the line that should stop you. "He understood the power of compound interest at age nine, while I brilliantly avoided it throughout my entire career." That is not a man who failed at anything. So what exactly did he avoid? Selling. Run the same 19% two ways. Hold everything and pay capital gains once at the end, and forty years turns a dollar into 842. Realise your gains every year and pay tax as you go, and the same 19% turns a dollar into 287. Identical returns. Roughly three times the money, purely from not touching it. That is the price of being right often instead of being right once and then waiting. And here is what makes this honest rather than a lecture. Jones knows all of it now and still cannot do it. He says plainly he could not sit through a 50% drawdown, that his own wiring will not permit it. He wondered aloud why he couldn't just believe in America and ride it out. He can't. Fifty years of reflexes do not get argued away by arithmetic. So the lesson is not to go and be Buffett. It is to work out which one you actually are before the market tells you, because the two strategies are not interchangeable and neither are the people who run them. He is 71. He apologised to a man he had doubted for decades, and then admitted he would probably do it the same way again.
Veles48,073 görüntüleme • 2 ay önce
The most expensive sentence in history was written in a book margin in 1637. "I have a truly marvelous proof, which this margin is too narrow to contain." Nobody found that proof for 358 years. Fermat's claim was so simple a kid gets it: no three whole numbers solve xⁿ + yⁿ = zⁿ once n passes 2. That one line beat every genius who touched it for three centuries. Andrew Wiles finally closed it in 1994. But he never attacked Fermat directly. He proved something stranger and much bigger - that two fields nobody thought were related are secretly the same field. y² = x³ + ax + b That's an elliptic curve, from number theory. A modular form comes from the opposite end of math - symmetry, complex analysis. For a century the two were studied by separate people who never spoke. Wiles proved they're the same object in two disguises. Fermat just fell off the bridge on the way. Now the part the documentary skips. Those same elliptic curves guard your bank login, your messages, every Bitcoin wallet alive. The famous problem was never where the treasure sat. Wiles on the seven years it took him to see it: "You enter the first room of the mansion and it's completely dark... after six months or so, you find the light switch, you turn it on, and suddenly it's all illuminated."
Veles22,649 görüntüleme • 29 gün önce
In 1963, Benoit Mandelbrot showed that cotton prices don't follow a bell curve. He showed it again with wheat, interest rates, stocks, and indices. Wall Street thanked him, gave him a medal, and kept using the bell curve. Every fund blowup since has been the invoice. Mandelbrot wasn't a Wall Street insider. He was a mathematician at IBM, an outsider the economics establishment spent 40 years trying to bury. Most of his career, mainstream finance journals wouldn't touch him. He was right anyway. The graveyard of blown-up funds keeps proving it. The thread above sells you a better filter. Mandelbrot spent his life on the assumption underneath every filter, the one every filter salesman needs you not to question. The assumption is that price moves cluster near the average and big moves are almost impossible. Every Sharpe ratio, every VaR, every risk model in every fund quietly runs on it. Mandelbrot proved for four decades, in papers Wall Street chose not to read, that real markets have fat tails, wild variance, and rough repeating patterns at every scale. The 10-sigma move isn't once in a hundred lifetimes. In markets, it shows up on a Tuesday. The self-similarity part is the tell. Take a crypto chart and cover the axis labels. You cannot tell if you're looking at a one-minute or a one-year timeframe. The roughness looks the same because the underlying process is the same. It does not average out at longer horizons. It just repeats. This is why every model that promises the tail is 1-in-10,000 blows up on schedule. LTCM died in 1998 and the industry called it once-a-millennium. 2008 repeated it a decade later. Crypto compresses the same lesson into weeks. 3AC, Luna, FTX, every leveraged desk that went to zero on a weekend was running on the bell curve Mandelbrot buried in 1963. The takeaway isn't that filters are useless. It's that no filter tells you how much to bet when it's right. Sizing is what survives the tail. The filter tells you where to look. Sizing decides whether you're still alive to look tomorrow. Build the filter. Build the swarm. Build the sharpest model of your generation. Just remember they're all fitting a world that doesn't exist, and the part that survives the tail, that part, you still have to bring yourself. His TED talk is from 2010. It's free. It was free in 1963 too.
Veles44,581 görüntüleme • 2 ay önce
Persi Diaconis walked into a lecture at the University of Washington, held up a coin, and told a room of physicists that Richard Feynman was fooled by it his entire life. He was right. In 2007, Diaconis proved a coin flip is not 50/50. It lands on the side it started on about 51 percent of the time. The bias comes from the physics of rotation under gravity. Every physicist since Newton had assumed 50/50 without ever testing it. Every trading model built on that assumption is running on the same lie. The lecture was on Feynman's book "The Meaning of it All." Diaconis quoted the most famous line in it: "the first principle is that you must not fool yourself, and you are the easiest person to fool." Then he pointed out that Feynman himself was fooled by every coin he ever flipped. Feynman's own rule would have killed the 50/50 assumption on day one. The market is the same setup at scale. Every model that assumes independent 50/50 outcomes at the base layer is built on a physical impossibility. Order flow, positioning, forced flows, expiries all leave biases larger than 1 percent. Your gut cannot see them. The math already knows they are there. Diaconis's rule: before you trust a random process, check it. Actually check it. Not with a simulation. With a proof or an experiment. The coin is where you start. The chart is where the same rule pays. The only random thing about markets is how thoroughly you refuse to check them.
veles18,798 görüntüleme • 2 ay önce
A hedge fund returned over 4,000 percent in a single month during the COVID crash. It made no calls. It held the same tail-risk position it had held for 13 years. The strategy was designed by a former options trader who wrote three books arguing that almost every Wall Street success is luck. His argument has not changed since 2001. Wall Street still has not read it. The trader is Nassim Taleb. The fund is Universa. Their entire business model is losing small amounts of money on 99 percent of days in order to make catastrophic amounts on the 1 percent day everyone else is dying. Taleb learned the trade himself in October 1987. He was 27, long thousands of out-of-the-money puts nobody else wanted. When the Dow fell 22.6 percent on Black Monday, those puts paid a hundred times their cost. He walked away rich enough to never need a paycheck again. He has said publicly that the entire arc of his career was paid for on a single afternoon. He drew the wrong conclusion from it. Instead of writing "How I Beat Wall Street," he wrote "Fooled by Randomness" in 2001. The thesis: most traders who look brilliant are lucky, and the ones who blow up are the ones who confused a streak with a skill. Six years later, "The Black Swan" hit shelves in April 2007. It described the mechanism of a credit-driven collapse in plain English. Fifteen months later, Lehman went bankrupt exactly as described. Wall Street bought half a million copies. Not one desk changed how it sized risk. In 2012 came "Antifragile." His Stanford talk on it is on YouTube. 45 minutes. Some systems break under stress. Some hold. A rare few grow stronger. Muscles. Immune systems. Options portfolios. The trader who sizes small and holds long-tail exposure gains from the same crashes that kill everyone else. His most repeated line from Fooled by Randomness, printed 24 years ago: "Mild success can be explainable by skills and labor. Wild success is attributable to variance." That sentence is the whole book. It is also the exact argument in Rossst's article on telling a real edge from luck. The idea is not new. Taleb wrote it in 2001. Rossst wrote it again this week because nobody listened the first time. He wrote it in 2001. Rossst wrote it in 2026. Somebody will write it again in 2049.
Veles11,602 görüntüleme • 2 ay önce