Can we control rare events?

Controlling rare events is a complex task, according to Brett Harrison, who was discussing probabilities and risk assessments on The Lunar Society. He suggests that while working in finance might improve one's ability to estimate the probability of rare events, this does not necessarily translate into effective solutions for such occurrences outside of financial contexts.

The skills developed in finance, like modeling and hedging against risks, operate within a closed system with quantifiable variables. However, when it comes to broader risks, such as pandemics or geopolitical threats, the solutions require a deeper understanding of the specific field and collective action, which traders might not be equipped to handle. Hence, the trader mentality in predicting and managing these events can sometimes lead to hubris rather than practical solutions 1.