April 2013


In Gregg v Scott [2005] the House of Lords gave judgment upon a medical negligence case that was judged as ‘loss of chance’. Due to medical negligence the plaintiff was mis-diagnosed, which dropped the probability of success from 42% to 25% due to the time involved in coming to the correct diagnosis.

“In order to achieve a just result in such cases the law defines the claimant’s actionable damage…by reference to the ‘opportunity’ the claimant lost, rather than by reference to the loss of the desired outcome…In adopting this approach the law does not depart from the principal that the claimant must prove actionable damage on the balance of probability. The law adheres to this principal but defines actionable damage in different, more appropriate terms.”


“Take as an example the statistical evidence that 42% of the patients suffering from the same disease as Mr Gregg achieved 10yr survival rates if treated at the stage when, but for, the negligence, Mr Gregg would have been treated, this figure dropping to 25% when the treatment was not given until the disease had reached a more advanced stage at which Mr Gregg was actually treated.

Held: Appeal denied.

Given that the mis-diagnosis was held to breach a duty of care and that it fell below the standard of care, then two questions remain: [i] was the mis-diagnosis the factual cause of the harm, viz, an increase in the severity of the disease?

The answer must be yes. The facts state that due to the mis-diagnosis and the increase in the time it took to make the diagnosis, the disease worsened. This is harm.

Is the mis-diagnosis a cause-in-fact of the harm? Notice the ‘but for’ test placed in the speech. If, ‘but for’ the negligence of the doctor[s], would the plaintiff have suffered the harm? No, the plaintiff would not have.

Thus the plaintiff fulfils all the requirements of negligence and should receive judgment and damages. The discussion around percentages relating to cures entirely misses the point. It is not the ‘loss of a chance’ to be cured or not as the case may be, rather, it is the harm inflicted via the negligence of the mis-diagnosis.


It might, however, be charged that Smith does not have the right to print such a statement, because Jones has a “right to privacy” (his “human” right) which Smith does not have the right to violate. But is there really such a right to privacy? How can there be? How can there be a right to prevent Smith from disseminating knowledge which he possesses? Surely there can be no such right. Smith owns his own body and therefore has the property right to own the knowledge he has inside his head, including his knowledge about Jones.

This is a question about where property rights originate. Property rights originate in the ownership of ones mind, extend to the ownership of ones body and thereto the ownership of ones production in the form of property rights.

If that is true [and it is] then the ownership via property of privacy is logical. Someone else cannot invade your right to privacy as it is an invasion of your bodily integrity.

To the question posed, it is not necessarily a question of rights in a utilitarian fashion that must be addressed, rather ‘just’ rights. In the question of privacy with regard to reputation, there are two preliminary questions to be asked: [i] is reputation property [ii] is the invasion of privacy to reputation ‘just’? Clearly the answer to [i] is yes, reputation is the product of labour utilising means to achieve an end, which is property. The answer to the second question is more nuanced. If the reputation is honestly earned, it is just property and an attack upon it is therefore unjust. If the reputation is unjust, then protection of it through the law is unjust. Which is pretty much where the law sits.

And therefore he has the corollary right to print and disseminate that knowledge. In short, as in the case of the “human right” to free speech, there is no such thing as a right to privacy except the right to protect one’s property from invasion.

If the printed knowledge is incorrect [unjust], there is a breach of privacy [property] and damages should be awarded.

The only right “to privacy” is the right to protect one’s property from being invaded by someone else. In brief, no one has the right to burgle someone else’s home, or to wiretap someone’s phone lines. Wiretapping is properly a crime not because of some vague and woolly “invasion of a ‘right to privacy’,” but because it is an invasion of the property right of the person being wiretapped.

Nor invade the property right held in the ownership of ones body and mind and property derived through Locke’s theory of labour.


This is being held in Auckland on 15 May.

Topics: Easy Volatility Investing

Tony is an Auckland Quantitative Analyst who specialises in market volatility. In 2010 he won the US National Association of Active Investment Managers (NAAIM, http://naaim.org) Wagner Award (a prize of $10,000) with his paper Alpha Generation and Risk Smoothing Using Managed Volatility (download from http://ssrn.com/abstract=1664823).

This year, 2013, he achieved second prize in the same competition with his paper Easy Volatility Investing (download from http://ssrn.com/abstract=2255327). It is this second paper that he will talk about at tonight’s meeting.

Market volatility is easier to predict than sharemarket returns and the returns from volatility can have a low correlation with sharemarkets. This makes volatility attractive as an investment asset.

For many decades the only way to invest in volatility has been through trading options, futures, or variance swaps. But now volatility-related Exchange Traded Notes (ETNs) exist which make volatility trading easy for the retail investor. The ETNs to be discussed are those with US tickers XIV, VXX, ZIV, and VXZ.

This presentation discusses these ETNs and shows how they work and how they can be traded to earn returns as high as 100% per year.

Topics to be discussed will be Futures pricing, Volatility Risk Premium, Roll yield, Momentum, and Steamrollers and the presentation will be aimed at beginners. No technical knowledge is required to follow the presentation and no mathematical formulas will be required.


I haven’t had too much from flippe-floppe recently, he had, until today been relatively quiet. He has returned with this:

WDAY will be trading higher for the next several years, in a very methodical, almost clandestine fashion.

I own it for some long term accounts and will not consider selling it.


As can be seen WDAY is a new stock to the market…that has gone straight up. Suddenly, with no previous mention of the name before today, my main man has a holding.



This post certainly sits with my commodities thesis currently:





Commodities [look at the highs/lows] over long periods of time provide ample buy low, sell high opportunities and every now and then, a huge bull market comes along. Apart from their lack of cash-flow in the form of dividends, although this can be corrected, they do provide a trading opportunity for the right strategy.



Infant born 3mths premature
Suffers from Retrolental fibroplasia
2 separate and distinct periods of negligence
There are in addition to high oxygen levels, 5 other aetiologies of RLF
The baby suffered from all these other conditions at some point
Of the two separate periods, one period had 5 instances of elevated O2

Duty of care: Did the hospital [doctors] create an unreasonable risk against the plaintiff, that if created could foreseeably lead to harm? Yes. They did. Therefore a duty of care due to proximity is created.

Standard of care: Did the doctors [hospital] discharge this duty to the standard under the authority of Bolam v Hospital Management Committee [1957]? No. They did not.

Breach of duty: Yes, through numerous errors, the duty of care was breached.

Factual Causation: Did the negligent behaviour cause the harm suffered by the plaintiff. It is at this point that their Lordships found that the defendant was not liable as, they were not the factual causation of the harm suffered.

They maintained that unlike McGhee v National Coal Board [1973] where a single variable, brick-dust, caused the dermatitis, here, there were a total of 6 distinct aetiologies that could have been responsible. Therefore, on the balance of probabilities, they found for the defendant.

This is clearly incorrect.

1 variable, viz, increased ppO2, occurred on at least 6 separate occasions. Calculating the probabilities via a binomial distribution, and you have a 100% probability that the increased ppO2 caused the RLF. On that basis, factual causation must be found and we move to the next stage of the test.

Cause-in-fact: This is the legal test. Here the ‘but for’ test suffices to find liability.

Defences: There are none that are relevant.

Held: That the defendants are liable for damages.



There is a clear breakout that is taking the market higher irrespective of economic fundamentals, or rather, because of them. Common stocks are as an effective hedge against inflation as are anything else asset wise. While interest rates remain zero or less, common stocks provide growth potential and dividends. For the moment at least common stocks look to continue higher.

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