[kosievdmerwe]

This viewpoint renders the word "risk" meaningless. Something isn't a risk if there isn't some sequence of events that can cause it to happen.

And even if we lived in a deterministic universe, we don't have perfect information, so we cannot know the outcome of big events. Our best way to deal with them is to model things probabilistically based on what we do know and make our choices based on based on risk/reward.

I'm also not sure where you're getting the phrase "tail risk", I didn't even know what the term meant much less used it.

[sicp-enjoyer]

I agree that risk is about lack of information. So I don't think PG could have been right. He has his view of the market, and other people have theirs. Turns out, he was missing a lot of information.

I guess I can see some crazy combination of physical objects colliding and nobody being able to predict where they land, I'm just not sure thats the right model for valuation of an asset.

> tail risk

Sorry if I introduced that. I just meant that it's occurrence far outside of the regular distribution.

[Retric]

The point about systemic risks is they don’t go away just because they haven’t happened yet.

For example, Bitcoin is up, as are most investments. It’s unfortunately also correlated in the other direction with the stock market so if the market tanks next month so does Bitcoin. But the link doesn’t go away if the stock market is fine, so Bitcoin could also crash in 2 months when the market tanks, or in X months… aka the risk is from the correlation not the short term outcome.

As to predictions, the best evidence we have is the universe isn’t deterministic. Quantium mechanics has everything rolling dice. So saying X didn’t happen therefore X couldn’t have happened appears to be inconsistent with how reality actually operates.

[sicp-enjoyer]

The quantum mechanics is a cop out, since everything observable at the scale of our lives is compatible with a determinism. Only experiments at microscopic level can falsify it.

> The point about systemic risks is they don’t go away just because they haven’t happened yet.

I agree. But observing a state of instability or unpredictability is different than saying "X economic event a 10% chance of happening".