--- topic: [[Deciding]] people: created: 2023-01-31 --- *Anything that is hugely profitable, famous, or important is rare.* This reminds me of [[black swan events]], It's kind of like how large events in the [[Barbells make you stronger]] model have outsized impacts what is it “Anything that is huge, profitable, famous, or influential is the result of a [[Tail-Event]] —an outlying one-in-thousands or millions event.” - This is the venture capital model: If a fund makes 100 investments, they expect 80% to fail, a handful to do reasonably well and 1-2 to drive the funds returns. - Consider the distribution of winners and losers in the stock market: most public companies fail, a few do ok and a few generate extraordinary returns. - “When you accept that tails drive everything in business, investing, and finance you realize that it’s normal for lots of things to go wrong, break, fail, and fall.” why does it matter ##### What would the opposite argument be? Somehow this is a paradox, because you have these rare episodes but they are enormous in their impact, and you plan for these by just being very broad and allowing many things to not succeed. %% tags: #note/idea %% ##### Sources: [[The Psychology of Money]]