WSJ: What Is Tail Risk?

By SIMON CONSTABLE

Bank research reports frequently refer to “tail risk” for investors, but it isn’t always clear what it means and what to do about it.

Broadly speaking, a tail risk is an event with a small probability of happening, says Bob Conroy, professor of finance at the University of Virginia Darden School of Business. “In every event there are tails; there are really, really good things that can happen and really, really bad things.”

The term comes from looking at the bell curve, or so-called normal distribution of results. The tails of the bell curve extend out to plus or minus infinity with ever-decreasing probabilities. Read more here.

WSJ: In Chaos, Small Hedge Funds Do Better

By SIMON CONSTABLE

The moment a crisis breaks out, hedge-fund investors should pray they’re in a large fund, which has the capital and market influence to survive, right? 

Just the opposite, it appears.  Read more here.

Forbes: An Antidote To The Tiger Mom? -- Book

By SIMON CONSTABLE

There is something about the sting of asphalt on the palm of your hand when you fall off your bicycle that makes you never want to let it happen again. Of course it will happen again, but you learn, you get better and so on. That is the way millions of people learned to ride. At least they did. But not so much lately.

A couple of years ago I met a woman who had never fallen from a bicycle or seemingly had any major failure in her life. Unfortunately, she wanted me to write her life story. It was unfortunate because narrative’s with no struggle don’t work so well. Obstacles overcome, after all, make a better tale. The bigger the obstacle the better the story. A story without such tension is just lacking. And now we are learning that it doesn’t really work so well in life either.

That brings me to Jessica Lahey’s recently published book, “The Gift of Failure: How the Best Parents Learn to Let Go So Their Children Can Succeed,” which addresses the issue of over protective parenting and how sometimes it’s just a better gift to let kids learn through trial and error. Lot’s of emphasis on the error, please! Read more here.

TheStreet: You Need Nerves of Steel to Make Money in the Metal Market

By SIMON CONSTABLE

NEW YORK (TheStreet)-- Steel stocks may shine soon, after losing their luster during a brutal summer, but only investors with an appetite for turbulence should consider buying them.

What makes them attractive is the relatively low prices. The Market Vectors Steel  exchange-traded fund, which holds a basket of steel stocks and iron-ore producers, is down 25% over the three months through Thursday, more than three times as much as the Standard & Poor's 500 index. U.S. Steel fared even worse, falling more than 35% over the same period. Read more here.

TheStreet: How to Make Your Big Idea the Next Facebook: Take a Break

By SIMON CONSTABLE

NEW YORK (TheStreet) -- If you want to create the next disruptive technology, it's going to take much more than a flash of inspiration during your morning shower: One vital ingredient is slack time.

Why? Because then you'll have time to do all the boring administrative work that's necessary for success. Nobody said building the next Facebook, Uber or Apple would be all glamour.

Read more here.

OZY: What Our Unemployment Rate Really Means

By SIMON CONSTABLE

Like lucky lottery numbers, few figures get as closely scrutinized every month as America’s unemployment rate. Now hovering at just 5.3 percent, down from 6.2 percent a year ago and close to half what it was five years ago, things seem to be on the up-and-up in the job market, right?

Well, turn to an elderly loved one, sitting back in a big comfy armchair sipping a mint julep, and they’ll probably tell you things just aren’t what they used to be. And they’d be right. Read more here.

Photo by Tim Mossholder on Unsplash

Forbes: Why Apple Should Steer Clear Of The Car Biz

By SIMON CONSTABLE

This is an open letter to the management of Apple.

Dear All,

If you are considering entering the car business, please reconsider. This is not something you should undertake likely. Trust me, I know from experience. I worked for years with General Motors and its subsidiary Delphi. Yes, the tech industry is brutal, but the auto business has other issues. Here are just some of the things you need to know: Read more here.

Photo by Sumudu Mohottige on Unsplash