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“The hassle is that convexity entails an entire bunch of significantly geeky math and laptop fashions and regular people in all probability don’t wish to go there. He also avoids selling shares, as a substitute takes loans and use them as collateral. Elon occasionally doubles the ante by shopping for extra shares and utilizing the remainder as collateral. But speaking of those banks, I'll wager they made him pledge his shares in other firms (Tesla, SpaceX) as collateral for the loans, as a result of the Twitter inventory wasn't worth the amount he was borrowing. In the event you overpay for an investment which has convexity you are not making a guess with constructive expected value. Once you encounter a convex financial or other opportunity with little downside and really huge upside, it's with your circle of competence and it's under-priced, it is best to guess Big. However, there's an unlimited alternative for surgical modifications without theatrical drama, extra like a sniper shot, like laying off a crew to switch from a homegrown resolution to a SaaS solution.

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