: Realized returns exhibit "fat tails" (kurtosis). Extreme market events happen far more frequently than standard models predict. Power Laws & Extremes
Seneca, a Stoic philosopher and one of the richest men in Rome, wrote extensively about fortune's volatility. His advice maps perfectly to trading. unperturbed by volatility pdf
In finance, volatility is measured by the standard deviation of returns—a statistical proxy for risk. In life, volatility is the chaos of a market crash, a sudden layoff, a geopolitical shock, or a personal crisis. : Realized returns exhibit "fat tails" (kurtosis)
If your self-worth is tied to portfolio returns, volatility will torture you. If your identity is tied to your process—to executing a systematic strategy regardless of noise—volatility becomes mere weather. a sudden layoff