This clip from The Daily Show is described as:

Is Fox News evil, or just plain stupid, to imply that its second-largest shareholder is a terrorist for donating to the so-called “Ground Zero Mosque”? The Daily Show attempts to settle the debate in last night’s episode.

I don’t usually link to articles in The Wall Street Journal, but I will make an exception this time.

The article Preparing for the Next ‘Black Swan’ by Jane J. Kim describes how other investors are adopting the strategy that Nassim Nicholas Taleb uses.

Darn, just as I read about how that strategy is implemented, there will be so many adopters of the strategy that it will no longer work.

In the article, Jane J. Kim does note:

Just because an approach worked last time doesn’t mean it will work in the future. Some of the new products launched in the past two years might not perform well under duress.

It seems rather obvious why this approach will no longer work now that the world has discovered it.  The approach used out of the money options way out on the tail end of the distribution of expected future prices. The reason the strategy could work so well was that these options were badly mispriced because other people badly estimated the probability of the “Black Swan” events.

Now that more people try to take advantage of mispriced options, the price will correct itself to correctly estimate the probability of these unusual events.  Thus the end of the outsized profits that can be made by the strategy.

This is what always happens to investing strategies that are suddenly discovered and are shown to have worked historically.  When everybody finds out about them, they no longer work.

plus ça change, plus c'est la même chose