This argument is equivalent to saying "Someone told me that Russian Roulette is dangerous, but I didn't die when I played it, so they're wrong."
Systematic risks are still risks even if they don't manifest and if you want to argue Paul Graham is wrong you have to argue why the risks aren't risks.
(I don't know what risks he pointed out, so I don't know whether I think he's right or not)
In your view, in what sense are alternative outcomes are actually statistically probably. It sounds to me like you're saying:
when the tweet was made the universe was about to make a dice roll. There was a probability that bitcoin went down and a probability that bitcoin went to the current price, and the universe rolled and happened to land on the current state, but the others could also have happened if luck had gone another way?
I'm not sure why you're trying to pigeonhole my world view into a dice roll example. The core point I'm making is that something doesn't become "not a risk" just because you didn't fail.
If we're talking about the dice roll example, just because your rolled a six, it doesn't mean that rolling specifically a six wasn't more unlikely than rolling a number from 1 to 5. Which means that if you planned (either explicitly or implicitly) on things working out in a way equivalent to rolling a 6, then your plan was risky.
Yes, I am doubting that big events in the economy function like dice rolls. When you say it's a tail risk, you're talking as if that outcome is actually realizable.
This viewpoint renders the word "risk" meaningless. Something isn't a risk if there isn't some sequence of events that can cause it to happen.
And even if we lived in a deterministic universe, we don't have perfect information, so we cannot know the outcome of big events. Our best way to deal with them is to model things probabilistically based on what we do know and make our choices based on based on risk/reward.
I'm also not sure where you're getting the phrase "tail risk", I didn't even know what the term meant much less used it.
I agree that risk is about lack of information. So I don't think PG could have been right. He has his view of the market, and other people have theirs. Turns out, he was missing a lot of information.
I guess I can see some crazy combination of physical objects colliding and nobody being able to predict where they land, I'm just not sure thats the right model for valuation of an asset.
> tail risk
Sorry if I introduced that. I just meant that it's occurrence far outside of the regular distribution.
The point about systemic risks is they don’t go away just because they haven’t happened yet.
For example, Bitcoin is up, as are most investments. It’s unfortunately also correlated in the other direction with the stock market so if the market tanks next month so does Bitcoin. But the link doesn’t go away if the stock market is fine, so Bitcoin could also crash in 2 months when the market tanks, or in X months… aka the risk is from the correlation not the short term outcome.
As to predictions, the best evidence we have is the universe isn’t deterministic. Quantium mechanics has everything rolling dice. So saying X didn’t happen therefore X couldn’t have happened appears to be inconsistent with how reality actually operates.
The quantum mechanics is a cop out, since everything observable at the scale of our lives is compatible with a determinism. Only experiments at microscopic level can falsify it.
> The point about systemic risks is they don’t go away just because they haven’t happened yet.
I agree. But observing a state of instability or unpredictability is different than saying "X economic event a 10% chance of happening".
The smarter the people, the bigger the ego and limited the vision.
Between ArsTechnica, HN and reddit and you can bet against popular opinions on this. You can also identify cult formation too.