[arder]

Nate Silver interviewed as SBF as part of research for his book and I think the big take away from it was basically that Sam's attitude to risk was pathological - he was willing to take any sized bet that he thought was positive expected value. The obvious problem with that is that you if you continually take higher and higher risk bets it's certain that you'll eventually lose one of them.

[UncleMeat]

SBF has been widely presented as a person who was constantly running these probabilistic computations and comparing expected values, but this strikes me as total horseshit that is a group invention of SBF himself and journalists who have a much more interesting story when he is a wunderkind.

I'll totally buy that he thinks about risk differently than other people, but not in some more mathematical sense.

[arder]

Well for a start to run an even passable market making operation and to get into the jobs Sam did you have to be atleast fairly good at the mathematics behind probability. He's definitely more able to reason about probabilities than the average person. But sure, "I'm gonna go steal all these guys deposits to go gambling" wasn't an aggressive but understandable bet, it was the act of a degenerate gambler.

[SilasX]

There were two things going on: A) Betting more aggressively than the Kelly Criterion, which indicates a bad understanding of how to reason about risk and EV[1], and, separately B) taking unnecessary, negative EV risks that have no justification beyond laziness.

B) include things like "having such sloppy accounting that you simply forget about major accounts[2] and are unintelligible to potential buyers" and "storing critical private keys in a text file that lots of people have poorly logged access to".

[1] lay explanation: https://sarahconstantin.substack.com/p/why-infinite-coin-fli...

[2] the infamous "hidden, poorly labeled fiat account" for example