Apparently the Tesla Model X is fully capable of autodriving itself, including dealing with traffic lights, turns, speed limits, other cars etc but due laws and regulations Tesla has that option turned off right now. This is remarkable because they were barely able to put together the first model that was fully functional but the persistent nature of the Musk's style lead to an exponential payoff. Something that probably 99% of engineers or auto execs would say was impossible a few years ago. It looks like he wants to create an Uber competitor in the future with auto driven cars (removing a big problem that Uber has, which is dealing with labor laws), I wouldn't bet against him. His business life has been a series of exponential payoffs to stockholders, it happened in Zip2, X.com (which merged with Paypal), SpaceX, Tesla and to some extent on Solarcity. TSLA is probably a little pricey now (and even Musk says that) but its a good one to keep on watch. Also, its a good thing to monitor going forward any kind of 'this is the new Steve Jobs' talk. I mean with some other guy. TSLA was a huge buy at the IPO at $17 but you had to know a little about Musk then, I didn't. I hope I find another opportunity like this in the future
https://www.brookings.edu/wp-content/uploads/2017/05/es_20170523_bernanke_boj_remarks.pdf Bernanke Japan Deflation
Amazingly, I was able to collect Brazil monthly return data from 1968 to 2016 (BR stocks, BR fixed income, US stocks, US fixed income and Gold). Previously I only had yearly data, which smooths out the volatility of many assets. With this monthly data I will be able to get some cool approximations of the ideal allocation to EM assets for a EM resident (perhaps in the future I can do from the perspective of a US citizen). What is nice is that Brazilian stocks went down 95% (!) in real terms at the MaxDD point in the sample. BR fixed income max dd was -43% real, US stocks was -61%, UST bonds was -65%, US Bills -72%, , Gold -87% So pretty much EVERYTHING got clobbered, yet Brazilian stocks beat US stocks by a good margin. They were a lot riskier but they returned more, so simulations will help answer how much to own of volatile but higher return assets. Also, how much of FX exposure a EM resident should own, to properly hedge against turmoil I suspect this will converge to the Taleb barbell to some extent, as it usually happens
This type of thinking (not taking no as an answer) has been shown to be revoluationay in tech by Jobs, Musk and others. But it could also be applied to other areas of life, even in the public sector. Could you imagine what would a Jobs like President could do? Humans have probably only scratched the surface of what they could really do if everybody had that mindset
AMZN. I remember very well when this started trding along with Yahoo, AOL and a handful of notable losers , Excite, Infoseek, etc. Amazon was a bookseller competing with Barnes and Noble and upstart Borders Group. It is astounding what AMZN has become. Could Bezos have even envisioned crushing Walmart and bankrupting brick and mortar retailing? I believe Amazon's accomplishment are more impressive than the Home Depot and Microsoft and I was around to see what they accomplished as well. I tend to think NY like and more time has past than not. This convexity principal would be very useful to an experienced young person ... So 10k in Amazon would be 5 mil..... A generation prior to me spoke the same of Xerox and IBM.
A few notes here : I read that more advanced options are not yet switched on. The recent cars come equipped with the proper hardware and Tesla downloads worldwide updates on its Model X whose owners prepaid its latest autopilot system, but I doubt whatever is in store is yet quite as performing as they claim, so far their autopilot works but will take you right through a red light, sometime on the other side of the road and one better be ready to swerve the car out of some obstacle the autopilot system is not judging properly. Speaking from experience here with their latest available system but there are also some clips on the net from Model X users far less flattering than Tesla's official videos. I doubt they are allowed to use a crappy system while the governments force them to keep the most performing updates in store. I'm long a small position in BYD btw, rather than TSLA, BYD is the leader afaik in electric cars in China, so far they don't target the same customer base but it they can move to a more luxury market and China decides to favour them over Tesla, Tesla could be hit hard - Tesla is thriving in Chinese cities with registration restrictions, where it's much easier to register an electric car than an oil powered car. As of stocks skyrocketting and getting one extremely wealthy along the way, if you are on the long side of a stock going way up, how long do you keep you initial position ? When a stock goes up a few hundred percent it starts to look odd in a portfolio, difficult to keep the full position on if one is rebalancing regulary, and it's not too difficult to find stocks who have been up 4-500% going down that much later on.
Absolutely, that's why I believe this convexity stuff goes hand in hand with a mindset shift. If someone is a pessimist, they will have a hard time keeping a stock that is going up, they will sell bitcoin at $5 , etc etc. Is it possible to make a lot of money being a pessimist on convexity bets? Sure, but it takes a huge amount of luck. Taleb was so lucky that in 1987 the market crashed -22% in a single day. Had it crashed -22% over 4 days, he probably would have made only a fraction of what he did. But more importantly, had the 87 crashed not happened in his trading years (and it has not happened in my trading years so far) he would have wasted premiums for years and not collected much of anything. Taleb is the lucky John Hussman, Hussman is the example of what happens when you don't get lucky buying options over and over again. There was also the US Real estate bust, where a few people made huge money in mortgage related CDS, but again, such a tiny amount of people that was fortunate enough to have those bets avaliable. In general, its really tough to make a lot of cash in pessimistic convexity bets, on the positive side though, its a lot easier so it seems to me that becoming more optimistic seems a necessity. Especially because an optimist might be able to tricky its brain into negative convexity bets that can be seen as positive (Taleb Eurodollar calls were actually a bet in a bull market of eurodollars) but its hard for an pessimist to do the same. So perhaps an optimist can have it both ways I was thinking that it could perhaps help to create a separate special account for these bets, a new brokerage account for long-term convexity bets. That way, you buy a stock there and never check how its doing unless there is a new fact that devalidates your thesis. You just keep positions there forever. If you keep all positions in the same account and see the big profit everyday, at some point you will talk yourself out of it and sell. Another technique, a % trailing stop. Say you see a new IPO that has a lot of convexity, some new genius guy with a new concept that could be a gigantic bagger. You can buy and put a 60% trailing stop. If the prices pullbacks more than 60% from the all-time high, you sell, otherwise you ride it to infinty. Sometimes you will get unlucky and a nasty bear market will stop you out before a big run but in general, you will ride all these all the way to multi-bagger status even though, you will never read a single earnings release or even know much about the business other than the fact that there is a lot of convexity exposure there, you like the CEO and you want to be invested in this convexity 'asset class'. The 60% stop can be also have additional stops based on news in case the CEO is fired, goes crazy, senile, or is proven to be not a genius, etc