Taleb employed a “barbell strategy”—that is, two risk extremes with no medium level. He put a big majority of his money in the safest assets he could find, such as treasury bills or cash. The rest he put into what are called way out of the money options—put options that are massively below the current market price of the stock, or call options that are massively above, and are priced as being extremely improbable events. The strategy is to make sure you could lose all of your money each time without getting wiped out, because you only need to be right once. And indeed, in the 1987 crash Taleb made tens of millions of dollars, and in the 2008 crash he did it again.

There is a similar strategy available to those who would devote themselves to a craft. The heart of Taleb’s philosophy is that you should minimize the downside risk to yourself, while maximizing the potential upside. When it comes to a craft, the best way to accomplish this is to prepare yourself for the possibility that all you will get out of it is the enjoyment of doing something well. Meanwhile, you should be putting your work out on the public web in order to make it possible for it to get a lot of attention—but again, only if you can emotionally prepare yourself for the fact that it probably won’t.

By Adam Gurri over at The Umlaut. Lots of good advice within, the economic lens being a fresh one on the truism to follow one's passion.

A corollary is not living too far beyond one's means so far that you can't even purchase some options. I'm not sure I agree with Gurri that "modern levels of affluence allows people to work a job the market will pay them for and still have time left over to devote to something they genuinely love," at least not as a rule rather than a privileged exception.

When I left my job at Amazon to go to film school, I was starting over, from the bottom rung, but I had the luxury of some savings from having worked a while to allow me to focus on filmmaking without having to take out exorbitant loans or work a side job waiting tables.

But many of my classmates graduated with a crippling debt overhang, and that comes with a real cost, both physical and mental. To be, as Taleb put it, antifragile, you need, as a budding filmmaker, to be able to pay your rent and buy enough ramen to keep yourself somewhat healthy, you need health insurance, you need those things that limit your you from catastrophic downside while allowing you some freedom to work on your craft, to purchase those options which might, though the odds are long, cash in.

It sounds so sensible: limit your downside, give yourself a chance at massive upside. And yet we romanticize the story of the long shot who puts it all on the line, has everything to lose, and against the longest of odds achieves massive prosperity. This is, depending on how you look at it, a good thing, giving hope to those who face the longest of odds, or dangerous mythology.