Almost everyone systematically under-allocates resources to the fat tails. We tend to spend most of our time and energy thinking about the middle, because we see the world through a bell curve lens, and most of the area in a bell curve is in the middle. But in reality, we live in an 80/20 world, where the top 1% of fat tails account for 50% of the results. The people who understand this seem to attract luck, but really they’ve just adopted the 80/20 curve model.
