Once upon a time when I first came to work on Wall Street a young colleague of mine liked to flirt, no more, with the PAs. One day he asked me to come out after work for a drink with a couple of them, instead of going home. I didn’t go and half jokingly said that if I was going to have to lie, it’d better be for something worthwhile. He went without me, and a couple of hours later when he hadn’t come home his significant other called me at home to ask me where he was. I said I didn’t know. She said he’d told her he was going out with me. I said that wasn’t the case. Etc etc. In the end, it was me she didn’t talk to for a while.

I am reminded of this because I missed all the hubbub involving Anthony Weiner while I was in Europe, and have now been catching up. The most astonishing thing is the apparent discrepancy between the risk and reward of Weiner’s actions. His expected Sharpe ratio had a very low numerator of reward for a very big volatiity.

It looks to the outside world like he messed up a political career and perhaps his marriage for the sake of a few cheap thrills. Either he needed those cheap thrills really really badly, or else he has a very poor sense of risk.

I suspect he needed them really badly, in which case they weren’t cheap at all.