The death of a friend playing Russian Roulette shaped the life of the author of the fun eccentric little book Fooled by Randomness.  Nassim Nicholas Taleb is a mathematically inclined option trader who would like us all to realized that when you encounter a wildly successful individual you should pause and consider, was he lucky or was he skillful? He points out that the world is quick
to offer you bets in the form of Russian Roulette you get a 1 in 6 chance at a million dollars, but the sixth time you die. Assuming your life is worth more than million dollars then the house wins
these bets on average.

Unlike Russian Roulette the terms of these bets are rarely so obviously presented. The house, or the Gods in this case, can offer you quite a spectrum of deals. First there is the subtlety of computing your chances in more complex games. If the Gods let you double your money, or die, on each bet and play with a gun that has 100 cylinders and one bullet how many rounds, on average, do you get to play? Second the Gods rarely give you terms that straight forward.

Taleb’s approach to this is to assume that people are way to optimistic and then use option trading to bet against them. Of course that requires a sufficiently mature and liquid market; one
that can support options trading. It’s unlikely you could use his approach to bet against the optimists that trade on eBay. Most forums that life is played out in lack the market mechanisms of Taleb’s scheme depend upon.

This is a great strategy to adopt when a Bull market transforms into a Bear market. So it’s not surprising that these days a publisher decided he ought to invite Taleb to write a book.

There is a story in Jane Jacob’s book about French Canadian separatism.  She argues that the reason that Toronto grew larger than Montreal was that the after the second world war Toronto was much more aggressive in taking risks. Meanwhile Montreal, an older wiser city, was more
conservative. Montreal had seen many a fad and so guarded it’s resources more carefully. Meanwhile the Gods arranged that for the 30 years following the second world war the games of Russian Roulette offered were very generous. Toronto thrived. Montreal fell to second rate and with it many of the hopes of French Canadians for independence.