From: Robin Lee Powell (firstname.lastname@example.org)
Date: Sun Jun 04 2006 - 22:48:51 MDT
On Sun, Jun 04, 2006 at 09:33:26AM -0700, Eliezer S. Yudkowsky wrote:
> These are drafts of my chapters for Nick Bostrom's forthcoming edited
> volume _Global Catastrophic Risks_. I may not have much time for
> further editing, but if anyone discovers any gross mistakes, then
> there's still time for me to submit changes.
> The chapters are:
> _Cognitive biases potentially affecting judgment of global risks_
Taleb (2001) gives the example of a trader whose strategy worked
consistently for six years, yielding more than $80 million -
then lost $300 million in a single catastrophe.
Long-Term Capital Management was a hedge fund whose founders
included two winners of the Nobel Prize in Economics. During the
Asian currency crisis and Russian bond default of 1998, the
markets behaved in a literally unprecedented fashion, assigned a
negligible probability by LTCM's historical model. As a result,
LTCM began to lose $100 million per day, day after day. On a
single day in 1998, LTCM lost more than $500 million. (Taleb
Those numbers (the 1st para vs. the second para) don't seem to fit.
Perhaps the first para needs to read $80/$300 billion?
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