I could be completely off here, but my understanding of the bet example was if y...

lilyball on July 2, 2013 | parent | context | favorite | on: Normal vs. Fat-tailed Distributions

I could be completely off here, but my understanding of the bet example was if you make bets assuming normal distribution, the worst-case situation you're prepared to handle is going to be different than the worst-case situation that's actually going to happen.