Readings: Wall Street marriage valuation, Worldly Investor, Power Laws
Via InfoProc, a Bloomberg piece on Pricing a Wall Street Marriage
Of course, it’s possible that Wall Street Man isn’t nearly as shrewd and calculating in his private life as he is in his professional one. It’s possible that, just like ordinary folk, he forgets his narrow financial interests when he falls in love, and only later, when he falls out, appreciates the value of what he has sold: a call option on half of whatever financial fortune he’s made. (Obtaining in the bargain, a put option on his soft, aging, hairy body.)
Laurel Kenner & Vic Niederhoffer’s Worldly Investor articles
Compiled into PDF files; challenging commonly accepted notions of the markets, permabears, and such.
John Hagel: The Power of Power Laws
In a world of power law or Pareto distributions, extreme events become much more prominent. Extreme events can take many forms. They can be sudden and severe disturbances like a class 9 earthquake or a financial meltdown like the one that occurred in US stock markets in 1987.
. . . “the lesson that we can draw is that extreme events, which in a Gaussian world could be safely ignored, are not only more common than expected but also of vastly larger magnitude and far more consequential.”
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