Sentences with phrase «fat tail events»

Look at it as insurance protection against the inevitable fat tail events (1987, 2000, 2008, etc) that lurk in the future.

Not exact matches

But, historically, such busts have been «fat tail» events that rarely occur.

But if you impose a forcing (AGW) which changes the degree of independence, making the tails fatter / less Gaussian, doesn't that mean the forcing ACTUALLY makes the probability of what were once 3,4,5 sigma events MUCH higher than indicated by tamino's method of analysis, which removes these effects?

Climate change's fat tail makes the likelihood of rare events more so.

On a tangent, but still within the issues raised in the original post, this kind of thinking is useful for analyzing extreme events (the ones in the fat tails).

With the fat tail, that's admitting significant possibility of a P - Tr extinction event.

Sure, there is more evidence favoring 4C or under than there is favoring the fatter tail, but the tail has a nonzero (and unquantified) probability and that's what low - probability catastrophic events are all about.

This is similar to the argument Benoit Mandelbrot and Nassim Taleb made about Mandelbrot's observation that fluctuations in markets for shares, futures, and commodities are not normally distributed but have fat tails: this means that standard risk - management practices (e.g., stress - testing portfolios) will fail to account properly for extremely unlikely events.