by krashidov 4 days ago
Isn't this just picking up pennies on an active railroad track? You'll win small bets and then get run over once a long tail event completely wipes you out.
I don't think the author is trying to pretend this is some sophisticated strategy you should actually use (note the chudjak in the image on github)
If you bet it all on one event yes, otherwise long tail just loses your bet. Downside risk is limited to your bet.
If there's a consistent, sufficiently strong bias towards "yes" and you have enough capital, it doesn't matter as long as you size your bets right and you're able to survive a few train collisions.