There is a fairly well known discussion point in quant trading circles that says you should always bet against the end of the world. If the logic is not immediately obvious to you, it goes something like this: if the world doesn’t end, I make money, and if the world does end, it won’t matter that I lost money.
I don’t know what the conditional probability of the world being “destroyed” is (defined here loosely as lots more nuclear weapons detonate, massive environmental damage, all world governments collapse, money is worthless) if one major city is destroyed by a nuclear weapon, but I would think its at least 25%.
All this to say, if you are making any decisions based on the implied odds of that market, its probably rational to consider them as higher, since we are really looking at the odds of [nuclear weapon goes off AND the world doesn’t end].
There is a fairly well known discussion point in quant trading circles that says you should always bet against the end of the world. If the logic is not immediately obvious to you, it goes something like this: if the world doesn’t end, I make money, and if the world does end, it won’t matter that I lost money.
I don’t know what the conditional probability of the world being “destroyed” is (defined here loosely as lots more nuclear weapons detonate, massive environmental damage, all world governments collapse, money is worthless) if one major city is destroyed by a nuclear weapon, but I would think its at least 25%.
All this to say, if you are making any decisions based on the implied odds of that market, its probably rational to consider them as higher, since we are really looking at the odds of [nuclear weapon goes off AND the world doesn’t end].