My general observation is that people tend to underestimate the likelihood of black swan events (covid, financial crisis) even as it's pretty obvious they're happening. And then when they do accept it, they react too far the other way and assume it's never going to end.

I've had success playing the markets in these specific cases. I did fritter away a lot of my gains from the financial crisis thinking I was a genius market timer. But I learned my lesson and didn't waver once I jumped back in after covid.

In both cases I got out before a bulk of the crash and timed the bottom almost to the day. Lucky I know, but I had reasons for both. For the financial crisis it was when Bill Fleckenstein closed his bear fund and put it all in MSFT. For covid it was when it looked like the lockdown was working and NYC hospitals weren't going to completely fall over like Northern Italy or Wuhan.

For any non black-swan scenarios, I assume I'll never get one up on the masters of the universe and just leave everything in blended age-appropriate funds.

I'm very concerned about an AI crash and the future of white collar work in general. But it feels more like a slow death to me than a black swan. So I'm just hedging with bonds and cash and stocks that hopefully don't crash as hard in a recession.

The problem with that thesis is that this doesn't seem to actually work as a strategy

This makes sense to me, but isn't there a risk of increasing the potential payoff high enough that someone is motivated to go out and make the yes side happen?

Consider this bot running on us military outcomes or something.

Well, that's why things aren't priced uniformly, isn't it?