The Fourth Quadrant: a Map of the Limits of Statistics (by Nassim Nicholas Taleb)

Re:The Fourth Quadrant: a Map of the Limits of Statistics (b... by hs on Monday September 15, 2008 @10:18PM (#305332)

this part is relevant to startups: (see figure 7)

"A biotech company (usually) faces positive uncertainty, a bank faces almost exclusively negative shocks. I call that in my new project "concave" or "convex" to model error."

concave to model error: Bank, Short volatility, security

convex to model error: Long options, biotech, technology, entrepreneurship, etc

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Re:The Fourth Quadrant: a Map of the Limits of Statistics (b... by mooneater on Tuesday September 16, 2008 @02:05AM (#305491)

I find his ideas fascinating. I also wish he had a much better editor, with good grammar.

So I guess he is saying startups have a small but real chance of massive success. True, maybe obvious, but still music to my ears!

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