Summary

This post is sort of about that battle, but more generally it's about two different forms of uncertainty for which humans have varying degrees of stomach for, and how they should be accounted for when deciding how much volatility your trading or investment portfolio should have: \"Risk\" (which we can think of as known unknowns, or at least the amount of volatility expected from a risk & return model which is calibrated on past data) and \"Uncertainty\" (which we can think of as unknown unknowns, or to be more precise the unknowability of our risk & return model).