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Tag Archive: Nassim Nicholas Taleb


I am personally inclined towards behavioral finance, as it has continuously challenged the conventional financialblog theory of rational wealth maximizers.

The irrational financial decisions, emotions and psychology have taken over the field of finance.

The very famous Aswath Damodaran says, the equity risk premium is the key to investing & valuation.

Ben Graham told once Mr. Market is there to serve you, not to guide you.

In the Taleb’s language you buy – sell or you make omelette out of it depends upon your luck, randomness, Probability, Belief, conjecture, Theory, Forecast and Anecdote.

The most crucial investing question that I have noticed is: Do you know your time frame? Continue reading

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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

Nassim Taleb’s contribution to the world of finance are two fascinating concepts — essays really — subsequently expanded into book length. The imagesfirst 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.

His second book is a corollary of sorts, almost the inverse to Fooled by Randomness: The Black Swan:

He’s vocal about his displeasure with most economists, academics and journalists. He’s usually wearing black. And he’s usually seen not smiling.

His latest status fascinated most of the people tricks to have a great day :

1) Smile at a stranger,  Continue reading

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