[lnlyplnt]

this is really nothing other than very straight forward "Insurance". In the long run, the optimists almost always win. Keeping money sitting idle and constantly rolling short dated put options is not a particularly sophisticated trading strategy.

[dxbydt]

Why should a trading strategy be "particularly sophisticated" ? I'd settle for terribly boring and profitable.

[tedunangst]

It's unlikely that a terribly boring strategy will in fact be profitable. (Comparatively speaking.)

[jib]

I don't think there is any correlation between exciting/boring and profitable. Index funds ar one of the more profitable strategies (as they don't involve paying some guy a ton of money to play lotto for you). They are certainly boring. Taleb argues that people Investing are really bad at estimating the value of catastrophic failure (or blowout success) and invests accordingly. He is playing the other side of Y combinators strategy, very much in agreement with Fred Wilson, Y combinator etc, just the other side of the spectrum.

[tedunangst]

Er, well, sharpe ratio and all that. The existence of a risk free investment that pays better than the risk free rate would be quite the discovery (certainly not boring!).

[nosuchthing]

Sure, but the trader from the article is just a single person with millions.

How many other traders out there look forward to bubble bursting events like this? Commodity disasters? Oil disasters and shortages? The whole "dumb money" (retail trades, casual investments, passive investment funds) vs "smart money" (day traders, hedge funds, insider traders, HFT) would lead me to believe that it's beneficial to exploit the excessive pumping up and bursting of financial bubbles, as it only siphons up 'dumb money'.