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You are here: Home / Archives for precautionary principle

Tail Events and Tail Risk

What is tail risk and how do you protect against it? ARTICLE TABLE OF CONTENTS (Skip to Section) Tail RiskHow to Manage Tail RiskProtecting Against Stock Market LossesSelf Insurance Against Tail Risk Selling Tail Risk ProtectionReserves to Protect Against UncertaintyTail Risk Podcast Tail Risk Tail events are rare occurrences that are well outside of the norm. Tail risk is the personal harm caused by these tail events. In the worst case, tail risk can ruin us. We … [Read more...]

324: 2020—The Year We Will Never Forget

December 9, 2020 by David Stein · Updated December 3, 2024

A review of how the pandemic, financial markets, and government policy evolved in 2020 to make for an unforgettable year. Topics covered include: Why the Covid-19 pandemic ranks as the second worst in modern history What is the difference between risk and uncertainty and how our investing should be different when dealing with uncertainty What portfolio changes did David make in 2020 and how should he have invested if he had perfect foresight Why speculative assets such as … [Read more...]

Filed Under: Podcast Tagged With: central banks, COVID-19, pandemics, precautionary principle, risk, uncertainty

310: Why the Stock Market and Economy Are Rebounding So Quickly

August 19, 2020 by David Stein · Updated July 30, 2022

How the current global recession differs from the Great Financial Crisis and why the recession is probably over. Topics covered include: Why the current recession has no debt and banking crisisWhy lower-income workers are disproportionally harmed by the current recessionHow the federal government and central bank responses differed between the current recession and the 2008–09 recession.Do increased unemployment benefits disincentivize workersWhy the recession is probably over but it … [Read more...]

Filed Under: Podcast Tagged With: central banks, COVID-19, pandemics, precautionary principle, recessions, vaccine

294: How Stories Go Viral and Drive Economic Events

April 15, 2020 by David Stein · Updated April 4, 2022

How the stories we tell ourselves lead to economic change. What are current pandemic related narratives that are impacting financial markets and the economy. Topics covered include: Examples of mathematical models for epidemics.What are the risks when the global economy is opened again.Under what circumstances do individuals rely on anecdotal evidence rather than statistics.What are some propositions that underly how economic narratives spread.What are some examples of major narratives … [Read more...]

Filed Under: Podcast Tagged With: COVID-19, economic narratives, pandemics, precautionary principle, Shiller (Robert), stories, viral

291: How To Survive the Coronavirus (COVID-19) Shutdown

March 20, 2020 by David Stein · Updated May 19, 2021

How to avoid ruin and help others avoid ruin as the economy shuts down to slow the spread of the coronavirus. Topics covered include: What is the precautionary principle and how can it help us make important decisions with regards to the coronavirus pandemic.How many people could be infected with COVID-19 in the next 30 to 60 days at the current daily growth rate.Why investment managers are selling assets to reduce their market exposure.Should individual investors be increasing or … [Read more...]

Filed Under: Podcast Tagged With: COVID-19, pandemics, precautionary principle, risk management, ruin

197: The Power of Less and Local

March 21, 2018 by David Stein · Updated May 27, 2021

Why having less things and activities gives us more freedom and happiness. Why low probability risks are unacceptable if the consequences affect all of us. In this episode you’ll learn: Why removing things can be more powerful then adding things, especially when it comes to happiness.Why we should avoid actions that can have systemic consequences and instead focus on more localized actions.Why we should take bounded risks like starting a business. Show Notes Skin … [Read more...]

Filed Under: Podcast Tagged With: impact investing, local, precautionary principle, Taleb (Nassim Nicholas), via negativa, wabi sabi

MNY029 Plus: Quantitative Easing

November 7, 2014 by David Stein · Updated April 29, 2021

In this week's Money For the Rest of Us Plus episode, I discuss: Quantitative easing as it pertains to repurchase agreement collateral and its impact on interest rates. Will the Federal Reserve sell its holdings of bonds? The Fed's reverse repo program. Nassim Nicholas Taleb's precautionary principle as it applies to QE and GMOs. Karl Popper's concept of the piecemeal engineer. Feedback from listeners on the interlude music experiment. The episode length is 17 minutes. … [Read more...]

Filed Under: Money Plus Tagged With: precautionary principle, quantitative easing, repurchase agreements, reverse repos

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