u/greyenlightenment

https://x.com/nntaleb/status/2087895871807422612

what was he wrong about?

https://x.com/nntaleb/status/2076269932694655106

Wealth is modeled as a power law, whereas the bench press is normally distributed

I'm sure many can relate to missing out on memory/NAND sector. The surge in NAND in late 2025/2026 came as a surprise, at least to me.

Recall from 2023-2024 NVDA was "the hottest AI play," and the assumption was it would continue. It was constantly in the news and in discussions.

Then around mid 2025-present NVDA and related AVGO stalled . But this also saw the surge in memory stocks, without any forewarning. Just "BOOM"!

The weird thing was, these memory stocks were flat from 2022-2025 despite the huge popularity and growth of AMD/NVDA and LLMs. Open AI and Anthropic were already worth hundreds of billions in 2025. SanDisk was not on the radar.

But in late 2025 and early 2026 something flipped and suddenly there was a "memory shortage" when somehow this wasn't a concern from 2022-2025.

What is the next stocks or sector to suddenly surge as downstream or secondary consequence of AI despite hibernating from 2022-2025?

I'm sure many can relate to missing out on memory/NAND sector. The surge in NAND in late 2025/2026 came as a surprise , at least to me.

Recall from 2023-2024 NVDA was "the hottest AI play," and the assumption was it would continue. It was constantly in the news and in discussions.

Then around mid 2025-present NVDA and related AVGO stalled . But this also saw the surge in memory stocks, without any forewarning. Just "BOOM"!

The weird thing was, these memory stocks were flat from 2022-2025 despite the huge popularity and growth of AMD/NVDA and LLMs. Open AI and Anthropic were already worth hundreds of in 2025.

But in late 2025 and early 2026 something flipped and suddenly there was a "memory shortage" when somehow this wasn't a concern from 2022-2025.

What is the next stocks or sector to suddenly surge as downstream or secondary consequence of AI despite hibernating from 2022-2025?

Based on my experience, selling long-dated (6+ months) at the money options is optimal for this market. These are calls where I also own the underlying.

So I may own 100 shares of NVDA and sell an ATM call that expires in 6 months. The net delta is around +.4 . I am doing this for several tech stocks.

Since 2024 there has tons of short-term whipsaw due to headline risk. This include tariffs, iran, china , inflation, Ai...whatever. So selling short-dated means a high risk of being forced out of position too soon.

There will be these 3-7 week stretches where the market rapidly falls 3-5% and then bounces. If you're selling long-dated options you will make money on the roll yield on the completion of these cycles.

Plus, a big premium means you make more $ from small percentage changes of the premium falling if sold ATM.

When done 2-3 years out (the maximum duration), you lock in the high interest rate. Based on the premium of the ATM call relative to the put, the implied interest rate is 4%, which you lock in when you sell the call (whilst owning the underlying). It's much more likely interest rates will fall due to recession or other problems, than rise above 4%, as that is the upper-end of the range since 1990 or so.

Position opened in SPCX

Yesterday I made a thread detailing my theta strategy for SPCX. I have now opened the position with SPCX trading at $155. I am selling covered calls , all positions expiring 12/18/2026. This means my breakeven is pretty low, around $110-120. I am hoping for a quick bounce, maybe to $180, and then I will transition to a delta neutral strategy.

Total capital at risk: 3% of "net worth," so if it was to go to $0, including premium, i would lose 3% of my account. It's part of a general bullish tech strategy. $11,000 per contract at risk and ~ $3500 premium gives a ~ yield of 66% on the position for any close above 155, assuming I do not sell it sooner.

SPCX has an IV of 80, which is among the highest of any individual stock

But it's worth $2 trillion, so this means it's probably more stable than the majority of small companies. $2 trillion is a huge market cap , so there is a lot of inertia keep it propped up. I am planning on selling straddle that expire in 6 months, with some of the underlying to keep the delta positive a bit . This takes advantage of what I expect rangebound trading. At $2 trillion SPCX is too big to go up much more, but also will not fall much either, similar to NVDA which has been in a $40 range for the past 2 years.

https://x.com/nntaleb/status/2065338362882322584

>There is a historical constant: no amount of wealth can liberate a third-rate thinker from intellectual envy or from the deeply degrading sense of scholarly inferiority -- that feeling of impoverished erudition. No amount of wealth.

I think this is the greatest fear Taleb has. He's projecting his own fear onto him.

What is considered a binge? 2000 calories? For me, it means eating until total fullness and the possibility of any more food is disgusting.

Including dividends, BITI has tracked the inverse of bitcoin perfectly. BITI is the best hedge against a market correction.

Bitcoin is much weaker than tech stocks on the upside and falls much more on downside. So if QQQ was to to rise 5% , bitcoin would maybe only go up 1%. OTOH, if QQQ falls 1% bitcoin easily falls 5%. Bitcoin also dumps really hard on bad geopolitical news, whereas QQQ falls much less, and QQQ rebounds much faster. This makes BITI better than TMF, because it hedges everything much more reliably, whereas TMF has inflation risk.

So I would do something like:

66% QQQ and 34% BITI

I am running something similar to this now.

go ahead and backtest. worked great in 2025-2026

Bitcoin is dying due to AI being much more profitable and better and threat of quantum computer. Plus, no Bitcoin reserve and Trump abandoned support for Bitcoin after taking donor money. Finally, Saylor announced he will sell Bitcoin to prop up his ponzi scheme, putting more pressure on BTC. All of these factors make bitcoin a great short as a hedge.

STRC pays out a 11% yield. Unlike bonds or yeildmax ETFs, it has much less economic/inflation risk. Of course, its risk is tied with MSTR/Bitcoin.

So combine STRC with bitcoin puts, BITI, or MSTR puts. The trade can be structured in such a way that you can profit if Bitcoin falls , but otherwise the downside of the puts is negated by the STRC payouts.

Saylor has said he will sell BTC to fund STRC dividends. So this puts downward pressure on both BTC and MSTR. MSTR falls as the value of BTC holdings falls, due to Saylor selling BTC to fund STRC.

So let's say you put 1/3 of your account in STRC and then some in Bitcoin/MSTR puts . You are getting free hedging , pretty much. If the market falls even a little bit, like 2025 or early 2026, Bitcoin will get clobbered, but STRC will be unaffected.

For example, let's say you have $216,000. You put $70,000 to buy STRC and $140,000 in SPY. The at-the-money IBIT put which expires in ~330 days costs ~$6.5. So you can buy 10 of these ($6,500) and this is covered by the yield on STRC. Regression analysis shows that a 10% decline in the SPY equals a 30-40% decline in BTC. So if IBIT is trading at $45 today, you will make ~$14k with this , which will hedge the $14k lost with the long SPY position, for free. This can be modified for leveraged products, too.

Even if inflation was to surge, which is bad for fixed income, Bitcoin will crash, as seen in 2022, so you will make money anyway. This method is a hedge against inflation , geopolitical uncertainty (e.g. China, Iran), tariffs, or recession. It also takes advantage Bitcoin being persistently weaker than tech stocks and capturing the downside by a factor of 3-5x when shorting to hedge, and much less or none of the upside, as seen in 2025 and first half of 2026.

Today this is paying off , as Bitcoin is down a lot and stocks are only down/flat. I am running something similar to this now by shorting bitcoin/mstr to hedge a tech portfolio.

STRC pays out a 11% yield. Unlike bonds or yeildmax ETFs, it has much less economic/inflation risk. Of course, its risk is tied with MSTR/Bitcoin.

So combine STRC with bitcoin puts, BITI, or MSTR puts. The trade can be structured in such a way that you can profit if Bitcoin falls , but otherwise the downside of the puts is negated by the STRC payouts.

Saylor has said he will sell BTC to fund STRC dividends. So this puts downward pressure on both BTC and MSTR. MSTR falls as the value of BTC holdings falls, due to Saylor selling BTC to fund STRC.

So let's say you put 25% of your account in STRC and then some in Bitcoin/MSTR puts . You are getting free hedging , pretty much. If the market falls even a little bit, like 2025 or early 2026, Bitcoin will get clobbered, but STRC will be unaffected.