shminux comments on Procedural Knowledge Gaps - Less Wrong

126 Post author: Alicorn 08 February 2011 03:17AM

You are viewing a comment permalink. View the original post to see all comments and the full post content.

Comments (1477)

You are viewing a single comment's thread. Show more comments above.

Comment author: shminux 12 April 2013 04:20:09PM *  1 point [-]

Suppose (for example) that I knew with 100% certainty that the global demand for home robotics would grow tenfold in the next decade.

If you have 100% confidence in something, you then logically should go for maximum leverage, regardless of the risk, and so stock up on derivatives, like options and futures, rather than buy and hold stocks or indices.

But of course people are generally poorly calibrated, so someone who thinks they are 100% right will probably be wrong half the time.