Convexity Made Simple

Convexity is a concept that all traders and investors must understand. While it can be complex, it isn’t difficult to grasp; at its core, convexity is simply an expression of non-linearity. What makes it so important is that it applies outside of finance, to life itself – as a philosophy of making small sacrifices for large potential returns.

Why Convexity Is Important In Choosing Your Career 2

Convexity also applies to our career choices

At the extreme end of career choices lies entrepreneurship, the polar opposite to the public sector job.

Entrepreneurship is the ultimate long convexity bet, and holds the greatest risk, but also offers the greatest rewards.

Read Article

Why Traders Need To Focus on Asymmetric Returns 1

I can calculate the motion of heavenly bodies, but not the madness of people, Sir Isaac Newton Quote

Hang around traders or investors long enough and you will hear the phrase “asymmetric returns”.

While it sounds suspiciously sophisticated and impressive, “asymmetric returns” aren’t, like a lot of other financial jargon, pure marketing guff. They are, in fact, a reflection of not just how markets distribute outcomes (returns), but also how we can best profit from them. 

Which begs the question, what exactly are asymmetric returns, and why are they so important?

Read Article

Why Traders Need To Focus on Asymmetric Returns 2

I can calculate the motion of heavenly bodies, but not the madness of people, Sir Isaac Newton Quote

Understanding how to go about making asymmetric returns is simple enough, but actually being able to do it is not.

Read Article

Why Traders Need To Focus on Asymmetric Returns 3

I can calculate the motion of heavenly bodies, but not the madness of people, Sir Isaac Newton Quote

For a modern parallel to Newton’s misadventures in financial markets, think of Bitcoin’s sharp rise, and subsequent tumble.

Read Article

the pensive nugget logo transparent background

Get a different perspective on all things trading & investing every week!

the pensive nugget blue background logo

Get a different perspective on all things trading & investing every week!