Positive skew: lots of little losses but when you win you win big.
- Positive skew: lots of little losses but when you win you win big.
- Negative skew: make money consistently but when you lose you lose big.
- The former is lottery tickets.
- The latter is fire insurance.
- In the latter, you don't know if your financial model actually works until the big fire.
- You can think you're in the best business ever… until your business explodes.