Home

Fat Tail Finance

In finance, a “fat tail” refers to a statistical property of a distribution in which the probability of certain events occurring is higher than expected. In the stock market, a fat tail might refer to the greater-than-expected likelihood of large price moves in a particular stock or index, or of extreme events such as stock market crashes. The term is often used in the context of risk analysis and portfolio management, as investors may need to take into account the potential for fat tails when evaluating the risk of their investments. We here at Fat Tail Finance look to avoid normalcy bias and avoid getting flattened in fat tail events.

News