Thread by @trengriffin

Charlie Munger:

"He said, 'Well, it’s a two-sigma event.' And then he said we were a three-sigma event. And then he said we were a four-sigma event. And he finally got up to six sigmas, better to add a sigma than change a theory, just because the evidence comes in differently."

The Munger citation from the previous tweet is from: jamesclear.com/great-speeches…

Nigel: "You see, most blokes will be trading stonks and options assuming 10 sigma. Where can you go from there? Nowhere. What we do, is if we need that extra push over the cliff, 11 Sigma. One higher."

3/ “The thing that really destroys people are what the academics would call six-sigma, or five-sigma, or seven-sigma events, which are things that are never supposed to happen, basically." Warren Buffett

4/ "Sigma is a method of describing the probabilities that they will happen in any given period — the number of sigmas. Financial markets don’t lend themselves well to modeling based on that. You know, they do most of the time, until it doesn’t work." Warren Buffett

5/ "And when it doesn’t work, you know, chaos reigns. And there are more six-sigma events that happen in financial markets — or theoretical six- sigma events — than any study of probability curves would ever come up with.” Warren Buffett

6/ "Investors should be skeptical of history-based models. Constructed by a nerdy-sounding priesthood using esoteric terms such as beta, gamma, sigma and the like. Too often investors forget to examine the assumptions behind the symbols. Beware of geeks bearing formulas." WB

7/ At the hearing, Robinhood's CEO said stock volatility leading to Robinhood's restriction was a "five sigma event."

"In the context of tens of thousands of days in the history of US stock market, a 1 in 3.5 million event is basically unmodelable." arstechnica.com/tech-policy/20…