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January 22, 2008



I hope you are wrong about 25%, but I fear there is no bottom in sight, and I'm running out of rope.

Earl Mardle

So do I mate. Its more of a stop loss; as the official family pessimist I have the job of looking down the barrel and preparing for the rainy day.

If you set the markers when you can be fairly sanguine about it, you don't have to think when all hell is breaking loose.

As I said to Linda, if we get to 25% in a week, or even look like that, we will start to hit problems like services failing because companies have to stop trading (trading while insolvent is an criminal offence) and I don't want to be 1,000 KM from home (and on the wrong side of the water) when that happens because other crap will start falling out as well.

I don't really expect to have to cancel the trip in the middle, I think we will go on unwinding for a while yet before the real panic hits, but I want to know when I should, and what we should do at that stage.

Take care with that rope my friend.


All this agitated resolve to be prepared with a strategy directly after explaining the futility of the best strategy stymied by the black swan! Not to detract from the seriousness of the current economic situation, but just to say it struck me as amusing ;-)

Earl Mardle

Ah, missalister, what makes you think that the "best" strategy failed?

What failed was the conventional strategy, one that does not, and in fact, cannot acknowledge the existence of events as disruptive as a black swan.

Talib has been a very successful trader because he bets small on the CW and covers those bets with others that will pay big time when, not if, things go wrong. What he cannot, and makes no claim to predict is the timing of those events.

Hi major focus is on weeding out any traders that claim that their system or their competence is the primary source of their success. If they can't accept the role of luck and exogenous influences on the outcomes of their business decisions, he walks.

Not only that, his assessment is that random and very disruptive events are becoming increasingly likely as the global economy becomes ever more tightly linked.

Read the books, that's why they are linked.


Good answer. You’re a sharp one!

Please know my comment was not intended to waste your time. A Networked World is the first blog I read when considering starting one of my own (I found your 8/28/03 post). And although your material is more intense than I ever get, I admire your intelligence and style, and therefore continue to "read you" on occasion. That’s the value here, further confirmation that your blog is widely read and returns value worldwide. Thanks for that!

Earl Mardle

Hi Missalister,

No fear that you are wasting time. And thanks for the compliments.

As for intensity, you are doing a fine job of that yourself. What a cool, eclectic blog.

Added to my reader, thanks.


I’m blushing and honored, both! Thank you!!!

Jon Husband

I am thinking that right about now or the next couple of days would be a pretty good time, whilst there's some pullback from oblivion because of the continued reliance on denial, etc.

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