The Black Swan Bet
He allocates three percent of the fund every year,
To options that pay off in the catastrophic event,
The market crash, the credit crisis, the atomic fear,
The tail risk that the normal distribution has not spent.
The black swan bet, the insurance on the impossible,
The black swan bet, the tail risk and the possible,
The black swan bet loses money every ordinary year,
The black swan bet pays for the catastrophic fear.
His investors complain about the three percent drag,
On the annual return in the normal market years,
They ask him why he holds the portfolio lag,
Of options that expire worthless in the cheers.
He tells them the three percent is the premium paid,
For protection against the event that ends the fund,
He tells them that the crisis of two thousand eight displayed,
The exact scenario his portfolio was designed for and found.
In two thousand eight his fund gained forty percent,
While the average fund lost thirty on the year,
The investors who had complained about the bent,
Drag of the insurance suddenly found it dear.
He allocates three percent of the fund every year,
To options that pay off in the catastrophic event,
The market crash, the credit crisis, the atomic fear,
The tail risk that the normal distribution has not spent.
The black swan bet, the insurance on the impossible,
The black swan bet, the tail risk and the possible,
The black swan bet loses money every ordinary year,
The black swan bet pays for the catastrophic fear.
His investors complain about the three percent drag,
On the annual return in the normal market years,
They ask him why he holds the portfolio lag,
Of options that expire worthless in the cheers.
He tells them the three percent is the premium paid,
For protection against the event that ends the fund,
He tells them that the crisis of two thousand eight displayed,
The exact scenario his portfolio was designed for and found.
In two thousand eight his fund gained forty percent,
While the average fund lost thirty on the year,
The investors who had complained about the bent,
Drag of the insurance suddenly found it dear.