Could you expand a bit further on what you think the OP's misunderstanding of the market is?

One huge example is an assumption that portfolio returns are normally distributed. That’s not a minor nitpick, this invalidates every formula that goes after.

OP does address this near the end of the post.

Well, you did say you didn't finish it. So would it surprise you to learn that topic is addressed directly?

Thats a fair assumption. But I did skim to the part that attempted to address non-normality—it doesn’t. Under non-normality, not a single formula in this post holds (“standard deviation” does not exist).

Hi, I wrote the post. I discussed the problem of non-normality in the post. Moreover, if non-normality is the problem, then pretty much all of modern finance is invalidated. Instead of saying its all bullshit, a better approach is to realize the assumptions of the model and use some discretion in trading based on its output.

> Moreover, if non-normality is the problem, then pretty much all of modern finance is invalidated.

I’d say, finance from the 70s is invalidated. And it has been invalidated countless times with all the major mutual funds going bust.

I’d love to encourage you to read more on this topic. Taleb’s “The Black Swan” is a good start, his other books are also good.

Black Scholes, VaR, factor models, CAPM, modern portfolio theory, etc are all based on the normal distribution and are all still used in industry today. Every quant fund in the world is using models that assume a log normal distribution of returns. Moreover, Taleb certainly used models based on log normal distributions at his hedge funds.

I wrote the article and I'm not offering advice, I'm delving into the mathematical implications of leverage on portfolio returns and volatility. I think you're deliberately being dismissive and rude without really offering any advice or constructive criticism. Moreover, I don't believe you actually understood the post, which isn't surprising, as you weren't even willing to read it.

I am sorry for being rude and dismissive.

My goal was not to hurt you (you are obviously learning, and I respect you for that), but to warn others who might think these ideas are reasonable and lose money as a result.