What Is Tail Risk and Are You Taking Too Much Of It?
When should you protect against rare, but extreme events? When should you self-insure? Under what circumstance should you sell tail risk protection to others?
Topics covered include:
- How tail events differ from tail risk
- Why volatility is not the best measure of risk for individuals
- What does it cost to protect against large stock market losses
- Why younger investors can take more risk due to their human capital
- How does the profit wheel options strategy work
- How the catastrophic power outage in Texas exemplifies tail risk
- Why individuals need to build more reserves because the economic system is too efficient and vulnerable to breakdowns
For more information on this episode click here.