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Tag Archive: BLACK SWAN


Alternative Investments

Alternative investments is not a new concept but seems to be gaining momentum, I did a story in back in 2012 under the CDSDEFAULT-1-1heading ART TREATED AS AN ALTERNATIVE INVESTMENT .Would like to evolve on those terms, Let’s face it : The financial crisis & the European crisis that seemed to mark a turning point in the spectacular growth of alternative investments, such as managed investments in hedge funds, private equity, real estate, commodities, and infrastructure. Poor performance and liquidity problems led to massive redemption in several categories. By now, however, those problems have subsided, and alternatives are back on track.

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Back from the memorable holidays had great fun. Now rebooting from the famous Nassim Nicholas Taleb . He might have blogsound repetitive in his interviews but his Contribution in the world of financial markets can not be ignored, sharing some quotes from his book “The Bed of Procrustes”.

  • The three most harmful addictions are heroin, carbohydrates and a monthly salary.
  •  To bankrupt a fool give him information.
  •  Education makes the wise slightly wiser, but it makes the fool vastly more dangerous. Continue reading

Market Efficiency

I dare to write on this topic as it is the most intense and debatable topic in the financial markets over the years.blog

The author of “Fooled by Randomness” and “The Black Swan” Nassim Taleb became the anti-theorist in finance arguing that the Nobel committee should be sued for awarding Harry Markowitz, Bill Sharpe and Merton Miller http://www.bloomberg.com/news/2010-10-08/taleb-says-crisis-makes-nobel-panel-liable-for-legitimizing-economists.html

But the Guru of Corporate finance Aswath Damodaran did a posting replying to him on the market efficiency models. http://aswathdamodaran.blogspot.com/2010/10/nassim-taleb-and-nobel-committee.html Continue reading

It’s always difficult to post the latest event and findings, just to put it in prospective. Is there anything in the Indian papers worth blogreading today? Or shall wait 4 the outrage to surface it?

Sharing two of the contrary indicators and psychology of Efficient Market Hypothesis and Black Swan that I have taken from the reformed broker and Hedgeye blog.

Sometimes it can be the Black duck

 “The trouble with the Recency Effect is that everyone all of a sudden thought they were Nassim Taleb, ornithological experts on the spotting of Black Swans. Every blip on the screen or blurb in the newspaper was fresh evidence of the next hundred years’ storm. Forget being fooled by randomness, people have become obsessed with randomness. Continue reading

Nassim Taleb’s contribution to the world of finance are two fascinating concepts — essays really — subsequently expanded into book length. 813530The first is Fooled By Randomness: The Hidden Role of Chance in Life and in the Markets, which describes the tendency of investors to find patterns where none exist, and to attribute to skill that which might be better credited to luck.

In one of his interview to Financial Times Taleb talks about how fragile we are. Five years on from the Lehman Brothers collapse, political and regulatory errors have made the world’s financial system even more fragile.This alarming line of thought comes from Nassim Nicholas Taleb, best known for The Black Swan, which explained markets’ difficulties in pricing extreme events for which they had no precedent.

He argues first that natural systems work by allowing things that do not work to break. This did not happen after the Lehman bankruptcy. True, letting Lehman fail was an attempt to instil discipline in the banking system, but it came too late.   Continue reading

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