Black Swan Investing

Nicholas Taleb, author of Fouled by Randomness and The Black Swan, was featured in a WSJ article. He helped launch a hedge fund, Universa, based on his ideas. He essentially buys puts and calls on securities, saddle option bets (or is it strangle?), that benefit from volatility. Apparently, from what I can tell, he makes a large number of bets and works the stats. He buys options that are way out of the current price so he gets them for a low price, relative to options closer to the current price. If there is little volatility, he loses the price of the option. His investors will therefore have to stomach small losses in flat years with big gains in years when the market gyrates. His approach acts as insurance against cataclysm and benefits from rallies. Not my cup of tea, especially since it isn't clear how the stocks are chosen (high betas?). Seems to me, most stocks in the investment universe don't move that much and the losses could add up. Insurance against huge market declines is buying with a large margin of safety and having some cash available to buy on the cheap.