Diego Parrilla

I think fat tails is, uh, but then ultimately, and you think of a misconceptions, the other big

point that links them is risk primia, is a concept I teach to the students, is the relationship between, let's call it real-world probabilities.

If we had a crystal ball and we knew exactly what the outcome of the real probability is, which is the ludic fallacy.

As humans, we try to think that there is such thing, which it's not.

It's random.

There's an element of stochastic randomness.

But what you can do is you can go to the markets and say, OK, what is your probability distribution?

And you look at the options markets, you look at the correlation markets, and you can actually construct an extraordinarily accurate distribution.

view of what the world is predicting today and that's what i do within in you know what we do on the quant side and we're able to uh it's not that we have a crystal ball but we have a exactly access to to the crystal ball of the market to say what are you predicting and i think that's where perhaps things get disconnected so the fact that there might be uh black swans

doesn't mean they're a good investment on themselves or a bad investment.

It depends on what the market is pricing, how the market is, the supply and demand for these things.

And so there's a lot of art and science on identifying these opportunities and basically, you know, generating contractual and indirect ways in which

we achieve our objective.

You know, I think we need to fall in love with the problem, not the solution.

This is one of my motives in life.

You know, I think the biggest problems in corporate world history, the biggest blow-ups have always been people who fell in love with their product, you know, with their solution, not with the problem.

Think of

linking the story back to oil and OPEC, right?

In my book, I said, look, OPEC and oil have been extraordinarily successful.

And the misconception at the time was that, you know, the book was called Opportunities from the End of Peacoil.