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| -rw-r--r-- | blog/horses.org | 33 | ||||
| -rw-r--r-- | config/emacs.org | 17 | ||||
| -rw-r--r-- | journal/20250106.org | 20 |
3 files changed, 65 insertions, 5 deletions
diff --git a/blog/horses.org b/blog/horses.org index 7c68834..3ffda71 100644 --- a/blog/horses.org +++ b/blog/horses.org @@ -46,6 +46,39 @@ the put options are priced in, in which case the fact that it's a bubble should EMH. Therefore, there's always a way to make money off of your twitter prediction! Will you? I believe that should be our measure of how much we should continue to believe in people on the internet. +** Napkin Math +Suppose we have a stock that's worth $100 and the intrinsic value is $1 (in the case of a couple +of current assets said to be bubbles, for example bitcoin, this 100x difference is /nothing/, as +people would like to believe that bitcoin is worth $0 -- just like Lehman brothers was in 2009). +The market thinks there is a 1% chance that this asset will go to $1 in the next 10 years, +whereas you, an intelligent investor, believe the real probability is 40% -- significantly higher +than the market wisdom suggests. Because we (and the market) regularly believe in the EMH, +we say that the market pricing for puts reflects the expected value of a put (in other words, +market participants cannot gain money on average by trading puts under their own assumption +that there is a 1% chance that in the next 10 years, there will be a $99 price drop). +The average amount of time that you would need to wait in order for one of the contracts to take +effect, given you're in the universe where the contract /does/ take effect would be 5 years, given +that the probability that you wait $n$ years is uniform. + +$5 \cdot 52 = 260$ weeks, so in total, this operation would cost $260x$ on average, where $x$ is the +price of the put share, given that the contract actually falls through. Your net revenue +in this situation would be $99 - 260x$ per contact. If your share doesn't fall through, +you will be paying $520x$ on average. Now to set up the expected value equation +(which, using our simplified model, our expected value should be 0): +\begin{align} +\frac{99 - 260x}{100} - \frac{99 \cdot 520x}{100} = 0 \\ +\frac{99}{100} - 2.6x - \frac{514.8x} = 0 \\ +2.6x + 514.8x = .99 \\ +517.4x = .99 \\ +x = \frac{.99}{517.4} \\ +x = 0.0019 +\end{align} +given these assumptions, put options should be priced around .2 cents per week. The rest +is left up to an exercise to the reader, but needless to say, this is a huge positive EV. Even +if it were 10 or 20 cents per week, you'd still have a huge positive EV. So even for "regular" +multimillionaires, this plan is totally feasible. If you have an idea to make money, it is +likely that at least one multimillionaire would listen to you, or is already doing exactly +this (buying puts). ** Economists as Market Participants When economists predict a recession or predict a Ponzi scheme or bubble, why don't they participate in the market place? The government has essentially infinite capital; they could roll put options diff --git a/config/emacs.org b/config/emacs.org index 64382ca..373a5e2 100644 --- a/config/emacs.org +++ b/config/emacs.org @@ -8,6 +8,13 @@ This is my Vanilla Emacs configuration, made to work with my NixOS configuration reason, you will not see :ensure t inside any use-package declaration, for emacs packages are all compiled natively and reproducibly on the NixOS side. This configuration uses the emacs-lisp language only to configure variables for said packages, for the most part. +** User +Change these variables: +#+begin_src emacs-lisp + (setq system-email "ret2pop@gmail.com") + (setq system-username "prestonpan") + (setq system-fullname "Preston Pan") +#+end_src ** UI Elements This section contains important UI elements and starting customization variables to make emacs work in a semi-sane way and make it not look ugly: @@ -437,8 +444,8 @@ Ivy is a pretty cool general program for displaying stuff: ** IRC #+begin_src emacs-lisp (setq - erc-nick "prestonpan" - erc-user-full-name "Preston Pan") + erc-nick system-username + erc-user-full-name system-fullname) (defun prestonpan () (interactive) @@ -621,8 +628,8 @@ Make LaTeX a litle better: Email in emacs can be done with Mu4e. #+begin_src emacs-lisp ;; SMTP settings: - (setq user-mail-address "ret2pop@gmail.com") - (setq user-full-name "Preston Pan") + (setq user-mail-address system-email) + (setq user-full-name system-fullname) (setq sendmail-program "msmtp" send-mail-function 'smtpmail-send-it message-sendmail-f-is-evil t @@ -644,7 +651,7 @@ Email in emacs can be done with Mu4e. (setq mu4e-compose-dont-reply-to-self t) (setq mu4e-change-filenames-when-moving t) (setq mu4e-get-mail-command "mbsync ret2pop") - (setq mu4e-compose-reply-ignore-address '("no-?reply" "ret2pop@gmail.com")) + (setq mu4e-compose-reply-ignore-address (add-to-list '("no-?reply") system-email)) (setq mu4e-html2text-command "w3m -T text/html" ; how to hanfle html-formatted emails mu4e-update-interval 300 ; seconds between each mail retrieval mu4e-headers-auto-update t ; avoid to type `g' to update diff --git a/journal/20250106.org b/journal/20250106.org new file mode 100644 index 0000000..c6be666 --- /dev/null +++ b/journal/20250106.org @@ -0,0 +1,20 @@ +#+TITLE: Daily Journal +#+STARTUP: showeverything +#+DESCRIPTION: My daily journal entry +#+AUTHOR: Preston Pan +#+HTML_HEAD: <link rel="stylesheet" type="text/css" href="../style.css" /> +#+html_head: <script src="https://polyfill.io/v3/polyfill.min.js?features=es6"></script> +#+html_head: <script id="MathJax-script" async src="https://cdn.jsdelivr.net/npm/mathjax@3/es5/tex-mml-chtml.js"></script> +#+options: broken-links:t +* Monday, 06 January 2025 +** 20:54 +Today, I'm very tired. I have a couple things that I wanted to do (i.e. update the nullring +webpage), but I'm slow at doing this, and I think I'm going to have to automate it with +Javascript. I'm not having the best day intellectually, but that's okay. + +I need to start doing other things soon. Either I will start actually programming, or I will +focus on making more music and media. Either way, I'm sure it will come, and I don't need to +think so much during bad days. My day otherwise wasn't actually that bad. I didn't feel +super terrible, but it's a struggle to be consistent. That being said, I don't think consistency +is the ultimate goal even if I want to be moreso. I just want to make sure I'm working towards +my goals at the end of the day. |