The Black Swan

When you have ADHD, you should always try to be "long optionality". And try not to be "short optionality".

Opening Note: Recently, my wife wrote about what it’s like to be married to someone with ADHD. I urge you to go and read that.

Now, back to regular programming - though this post might be a bit too technical for some readers, and a little arbitrary as well

When I read Nassim Nicholas Taleb’s The Black Swan way back in 2007-8 (when it first came out), my main takeaway from the book was that you are always better off being on the long side of an option rather than the short side. Thinking about the same concept fifteen years later, I think this concept is doubly important for someone with ADHD.

Taleb, who some of you might know through twitter, was an options trader on Wall Street in the 1980s. He made his big windfall during "Black Monday” in 1987, when the Dow crashed 20%. For a long time, he had bet that the financial markets had grossly underpriced the probability of a large move in asset prices, and he had been buying options that would let him profit in the wake of a large move.

For years, nothing happened and he kept losing small amounts of money on each trade (while traders on the other side kept making seemingly steady small profits as they collected his option premiums, and saw them expire worthless). And then, when the big move in stock prices happened, he made his windfall. This made him rich enough to call people imbeciles, generally be a jerk on twitter, and write books where the first 50 pages are unreadable but people read them anyway.

Some of his counterparties who had been “short optionality” (where they would lose money in case of a large move in asset prices) ended up jumping out of their office buildings on Black Monday.

That is a very long preamble of this post that is supposed to be about ADHD, so let me get to the point now.

When you have ADHD, you are “volatile”. In the eyes of a lot of neurotypical people, your behaviour is unpredictable. You do “random things”. You are hyperactive (the H in ADHD).

Related to this, you need control. You need “optionality” in life - flexible working hours are useful (for you don’t know when you’re able to hyperfocus on work); you need slack (you never know when you might tire of running fast and want to “take a nap”); you don’t want to overcommit (for you might get bored). And so on.

So if you are “long optionality”, you are good.

On the other hand, being “short optionality” can be a disaster. If you are “on call” for something, the knowledge that you “might be disturbed” means you can’t do anything else (the other day I had to call a shop and couldn’t get through. Until I finally successfully connected I couldn’t do anything else). If people around you are being unpredictable - in terms of what they want from you, or just in terms of their sheer movement - you can feel massively unsettled and unable to focus on anything.

If someone tries to control you in any way, it can be an absolute and unmitigated disaster - and there is a very good chance that you might feel violated and lash out.

All this put together means that short optionality is a disaster. So, if you have ADHD, you need to trade like Nassim Taleb. You need to take the long side of optionality, not the short side. You need to design your life such that you are allowed to show your volatility, but are not subject to other people’s volatilities.

Then again - life is not simple. If you want to show volatility but don’t want to be subject to others’ volatilities, that means you shouldn’t hang out with other people with ADHD. However, that is easier said than done.

For starters, there is a genetic component to ADHD - if you have ADHD, your parents and siblings and children are MORE LIKELY than normal to have ADHD. These are relationships you need to live with. Then, certain kinds of jobs are likely to attract people with ADHD, so you might end up working with other people with ADHD, and there is no easy way out there.

It is easy to talk about all this in the limited construct of financial markets, but life itself isn’t simple. Then again, to the extent possible, you need to increase your slack and reduce the optionality you give to people around you.