A spurious tail is the performance of a certain number of operators that is entirely caused by luck, what is called the “lucky fool” in Taleb (2001). Because of winner-take-all-effects (from globalization),spurious performance increases with timeand explodes under fat tails in alarming proportions. An operator starting today, no matter his skill level, and ability to predict prices, will be outcompeted by the spurious tail. He published a paper shows the effect of powerlaw distributions on such spurious tail.
Taleb’s maverick thoughts became more famous from the The Bed of Procrustes – Here are some of them that I could recall :
The three most harmful addictions are heroin, Continue reading “Most harmful addictions are heroin, carbohydrates and a monthly salary.”