rethinking risk
"In every crisis lies danger and opportunity — just as the Chinese word 危机 combines 危 (danger) and 机 (opportunity). True risk lives in the tails, and only those with skin in the game can seize it.”
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At Codevo, we transform bold gaming concepts into fully playable realities. From casual mobile games to complex 3D experiences, our team blends storytelling, visual design, and smooth gameplay mechanics to craft games that entertain, inspire, and captivate. We cover every stage—from concept art and level design to physics, animation, and cross-platform development.
In the realm of investing, traditional portfolio management often relies on models that assume a normal distribution of returns—bell curves, standard deviations, and the like. These models work well under typical conditions but falter when faced with tail-risk events—rare, extreme occurrences that fall outside the realm of regular expectations. Consider the Global Financial Crisis (GFC) of 2008, when the S&P 500 plunged by more than 57% from its peak in October 2007 to the trough in March 2009—a move far beyond what a normal distribution would predict. Or more recently, the COVID-19 crash of March 2020, when the S&P 500 dropped nearly 34% in just over a month. Both episodes illustrate how catastrophic losses can emerge suddenly, exposing the fragility of portfolios built on the illusion of stability.
Nassim Taleb, in his seminal work Antifragile, critiques the overreliance on Gaussian models in finance. He argues that such models underestimate the probability and impact of rare events, leading to a false sense of security. Taleb introduces the concept of antifragility, where certain systems thrive and grow when exposed to volatility and disorder.
In contrast, fragile systems break down under stress.
Bitcoin, often criticized for its volatility, exemplifies an asset that benefits from tail-risk events. Its price movements are not normally distributed; instead, they exhibit "fat tails," meaning extreme price changes occur more frequently than traditional models predict. This characteristic allows Bitcoin to outperform many diversified funds.
Understanding and acknowledging the presence of fat tails in financial markets is crucial. By doing so, investors can better prepare for and potentially capitalize on extreme events. Ignoring these outliers can lead to significant underperformance and missed opportunities.
Just as Jeff Park noted, markets ultimately reward those who recognize that value is not determined solely by cash flows or cost of capital, but by the frameworks—legal, technological, and cultural—through which societies allocate trust and power. This lens reframes investing as more than a numbers game; it is about understanding the deep structures that survive crises and paradigm shifts. For the Ideological Investor, Bitcoin stands as both the ultimate horse and the ultimate hedge: an asset born from distrust of fragile systems, designed to endure volatility, and aligned with the antifragile principle of benefiting from disorder. In an era defined by tail-risk events, Bitcoin embodies a worldview where capital is allocated not just for stability, but for survival and long-term outperformance.
Where the Newtonian Investor sought certainty through equations, the Ideological Investor seeks to embrace uncertainty through epistemics, thriving amid volatility and fat-tailed events, using judgment, adaptability, and contextual awareness to navigate what traditional models cannot capture.
source: jeff park's substack: The Fall of the Intelligent Investor and the Rise of the Ideological Investor
allocate capital based on conviction and risk tolerance to minimize outsize losses.
stress-test portfolios across potential outcomes to anticipate risks and uncover hidden opportunities.
protect digital assets with best practices in wallet management, hardware security and redundancy.
Balancing long and short exposures to neutralize market direction, while capturing returns from volatility and relative value.
