Government makes the best cheese in the world.

Look, I hate to be that guy, but I've got a PhD in Mathematical Statistics. This stuff is my bread and butter. If you've got questions I'll be happy to try and answer them. But I'm not going to argue about basic definitions.

The definition of risk in finance is and always has been the expected loss with regard to some measure, or in other words: the expected value (or integral) of some loss function that is defined by your strategy. This is not a probability, it's a value. A value which can be positive, negative or zero to indicate respectively the average loss, profit or no change over many repetitions of the same strategy.

The probability that returns deviate from expectation can be measured in different ways, but none of those is what is understood as "risk" in this field.

No, they do not. Risk exclusively a measure of your proposed strategy. Volatility is a market phenomenon that does not in any way depend on your strategy.




No, I'm still not talking about moving averages and you are still completely misrepresenting what I've said.

To cut it short, it was probably my bad for assuming you weren't, but you're clearly just using terms very loosely and with a naive colloquial understanding as opposed to their actual definitions.

If you're not going to do anything with these things that's fine I suppose. But you should still be aware of your misunderstanding of the subject.

No, they still aren't strongly correlated. The level of correlation depends exclusively on your strategy, capacity, and infrastructure and not on the volatility. They have virtually nothing to do with each other.

You can by the way have two different definitions or objects that are equivalent to each other.

It's called an academic example. Which is more than fit to illustrate points about an already abstract field like finance.

No, I'm not. Risk and volatility are not equivalent and in fact not even correlated until an individual, specific strategy introduces correlation.

Yes, you can. You can have a company that doesn't ever grow, returns the same dividends and keeps the same asset value. Until an asteroid wipes it out of existence and reduces it to zero.

As I've already said, in finance the risk of a strategy (e.g. "buy Bitcoin") is the expected loss of that strategy. This is a statistical measure. And because Bitcoin's potential returns are so extreme this becomes an example of an asset with negative risk, e.g. expected returns, despite not guaranteeing any profit.

Good, that's why this makes a perfect example if you actually want to understand what's going on.

See the dice example. I'm not. Risk is a "before-the-fact" measure.

Depends on how good/bad it would be for my back.

I am not talking about any moving averages. You could compute them for my example, but they're not relevant to the argument.

Your argument was that volatility is equivalent to risk, which is generally wrong. Neither contains much, if any, information about the other.

To show to you that this is not the case I've tried to give you examples of assets that directly contradict your assertion.

In the 'basket of all stocks' you have no risk in the long-term, because your expected loss (= risk) is strictly negative and hence your expected return is strictly positive, because the realized total return converges towards 10% p.a. (in the case of the US stock market) over time.
Despite that, the asset itself has been volatile. Hence, volatility does not imply anything about risk nor vice versa. The only thing that matters for risk is your strategy and nothing else.

You can have a perpetually flat asset with high risk, or you can have highly volatile assets without any risk (Bitcoin - which does not mean that you are guaranteed to make money).

You can get volatility and risk in any combination and neither implies the other.

You are probably conflating risk and actual returns. Risk is a statistical measure, e.g. the expected loss of a strategy, asset or portfolio.
Just like the expected value of a dice roll is 3.5 = 1/6 times sum of all potential results.
With risk the results are potential price trajectories in the market and the probabilities are obviously different and depend on all sorts of parameters.
Realized returns on the other hand are what you end up with in reality, and while risk can give you an idea of a region that you'll land in, it'll never tell you what will really happen for individual 'games'.


Here's another attempt to make the point clear.
Assume you have volatility but it's always the same. Basically, your price follows a 100% predictable pattern no matter how many people buy or sell. In that case you have volatility, but 100% insight and hence can generate profits without any risk whatsoever.
Obviously this isn't going to happen in real markets (though it does in many games), but it should be sufficiently illustrative to show that volatility and risk aren't related.

Thanks!

I'm starting to feel like you're trolling me now. What part about "a constant trajectory around which the price oscillates" do you not understand?

Not even going to address the rest of the post until we've established why you refuse to understand this and keep repeating the same wrong thing over and over even when it's pointed out to you.

"Volatility, in essence, is nothing but a random oscillation around a potentially unknown trajectory."

Irrelevant to the argument. I was giving you an example of a volatile investment with negative risk to show to you that your understanding of volatility is wrong.

Reading comprehension.
I was never talking about "constant upward trajectory", but about "constant upward trajectory with volatility around the trajectory"; or in other words random deviations from the trajectory. In the long-term volatility is very often irrelevant, in the short term it may, but need not necessarily increase risk.

Volatility, in essence, is nothing but a random oscillation around a potentially unknown trajectory.
This, again, means that you can have assets of arbitrary volatility that fall into all three categories of: 1.) negative risk 2.) positive risk and 3.) neutral risk.

Bitcoin is just one of a countless number of assets and has no relevance to the definition of volatility.
It may serve as an example for an asset with high volatility and negative risk (e.g. an expected long-term return greater zero) that may, despite having a positive expected return, still reduce your capital to ashes; which makes it a rather interesting case.
But that does not imply that all volatile assets are risky.

A brief history lesson. Hitler and Stalin breathed oxygen.
Trump breathes oxygen. Want to guess what happens next?

In other words, this is retarded.

All I want is a massive crypto bull run parallel to a massive stock crash. Then flip things around shortly after.

No, it most certainly does not.
If you had a constant upward trajectory with a slope of p, then any "constant" (e.g. predictable) form of volatility around that trajectory would provide a 100% risk-free and arbitrarily volatile long-term investment with an expected positive annual return of p.

In other words, volatility can but need not be a factor in risk.

So who else thinks markets (stocks) might be crashing more because of the election than because of corona, with corona just sparking the sell-off?
If Trump somehow did not manage to get re-elected things would be looking pretty bad for the economy.

Not that Sanders would manage to get anything passed that would raise spending by $100 Trillion USD, which by the way is way more than the $83 Trillion of the M3 supply of the entire planet, but he'd still be a significant downgrade that would devastate the markets.

Potential long opportunity come November?


Next year looks more than reasonable, this year not impossible.

You're putting an irrational amount of weight on peer review and science.
Lots of science today is just career academia and not science whatsoever. It's also a highly indisputable fact that you have to tickle the right balls to get funding in academia, unless you're doing basic research that can't in any way be used to drive political or corporate narratives.

Furthermore, it's also a well established fact that Physics has only access to some 95% of what they currently believe to be making up the universe.
And even the remaining 5% is quite poorly understood.

Hence, any argument asserting that "X is a fairy tale/conspiracy/whatever because there's no peer reviewed paper" is inherently unscientific, irrational, and in fact deeply dangerous to actual progress. Indeed it is no more than religious dogma in a different form.

God bless. Or spaghetti. Same difference. Either way, the only right move by any standard.

You can actually shuffle a deck of 52 cards into 53 cards. It's called Banach Tarski's Paradox.

Assuming your cards are null sets that is.

Keep in mind that Youtube is crap for hifi.

I have a lossless version that sounds stellar with decent headphones and a headphone amp. Can easily discern all instruments and effects with no effort and can properly sense the spatial placements of the sounds as well.

Though of course if your stereo setup beats your headphone setup you'll enjoy it through that much more. I'd recommend getting the album or checking out TPB for flacs.


Definitely second listening through the whole album in one go though. That's how prog rock albums are meant to be listened to anyways, for a good reason.

They're more like movies for your ears than songs.

What an album.

https://www.youtube.com/watch?v=LTYZVgSrQJs

You could probably also use it to make your own edibles (depending on what exactly your oil contains). Concentrates make for fairly easy pinpoint dosing.


Also, lol at Satoshi plagiarizing TheRealSatoshiTM.

The hypocrisy in the comments is quite astounding, although not at all surprising.

Marrying within a group is a common theme among many demographics, including (parts of) Jews, Muslims and Mormons among others.

Just goes to show how many people on all sides just want to hate more than anything else. The more I watch people's behaviours the more just the world appears.

I would agree with your position if it was as you described. In reality however, that gibbering dementia patient is highly calculated and is stealing your money, rather than just trying to.

The US taxes global income.