tag:blogger.com,1999:blog-816559531110064247.post5425737755736525115..comments2024-03-08T01:03:44.522-08:00Comments on Humble Student of the Markets: Another front page sell signal?Cam Hui, CFAhttp://www.blogger.com/profile/09672203690656029787noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-816559531110064247.post-22131149530223577392013-02-04T05:56:29.905-08:002013-02-04T05:56:29.905-08:00A "tall and skinny" distribution, like &...A "tall and skinny" distribution, like "B", simply say that variables are scattered closely around the mean and the tails are thin (K>0).<br /><br />"The higher the kurtosis, the fatter the tails"<br /><br />I believe those two statements are contradictory.<br /><br />High kurtosis, or low historic volatility, could also mean that investors are lulled into complacency, as the volatile and risky times are long forgotten. Leverage increases.<br /><br />You could turn the argument around by saying that it is in highly volatile times that risk is overpriced and you get rewarded for assuming that risk from other market participants.Gloeschihttps://www.blogger.com/profile/10705125909506053628noreply@blogger.com