Date: Sun, 17 Jul 2005 23:34:43 CST
From: "Ron Peterson" 
Newsgroups: misc.invest.financial-plan
Subject: Re: Mandelbrot Economics
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Will Trice wrote:

> Nassim Taleb is an options trader in the Mandelbrot camp
> (www.fooledbyrandomness.com).  He suggests taking measures to keep
> yourself out of the tails of the distribution, but I haven't read his
> site enough to know how one does that.  Perhaps the market circuit
> breakers do just this?

Taleb is saying that there is a higher pobability that the stock price
will collapse or skyrocket than would be predicted from the variance.
To protect against the stock prices doing that buy puts with a low
strike price and calls with a high strike price.

He claims that diversifying the portfolio doesn't protect against
disasters (e.g 9-11).

-- 
     Ron