I've never found a way to articulate it cleanly, but this is a really important point from Taleb's work (and others) that goes underappreciated.
If an environment is becoming more fat tailed, we would actually expect less variance in the short-term.
If an environment is becoming more fat tailed, we would actually expect less variance in the short-term.
https://twitter.com/10kdiver/status/1393636865811435521
It's got a Minsky-esque quality to it that more stability can actually suggest greater future instability.
If you remove all the stressors from an environment by delaying risk, you not only make the eventual collapse worse, you make people less prepared for it.
https://twitter.com/IRunWithBulls/status/1391893699999764481
Of course, it's impossible to know this beforehand.
It's entirely possible that less variance in the short term does mean that the system dynamics have changed in some way that make it more stable.
But, still, very interesting and counterintuitive point worth considering.
It's entirely possible that less variance in the short term does mean that the system dynamics have changed in some way that make it more stable.
But, still, very interesting and counterintuitive point worth considering.
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