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Tag Archive: Taleb


Now that Modi is having the last laugh, here’s the list of Taleb’s aphorisms that he needs to dish out to the pseudo intellectuals and the snake oil salesmen who argued that his demonetization policy move would spell death-knell for him in electoral politics:

  1. People feel totally lost (& deep anxiety) finding out that someone they held for stupid is actually more intelligent than they are.
  2. Risk takers never complain. They do.
  3. The ultimate freedom lies in not having to explain “why” you did something.
  4. Nit-picking is the unmistakable mark of cluelessness.
  5. Never rid anyone of an illusion unless you can replace it in his mind with Continue reading
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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

Antifragile

Side view of mature adult showing characterist...

In economic life and history more generally, just about everything of consequence comes from black swans; ordinary events have paltry effects in the long term.” –Nassim Nicholas Taleb

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

A spurious tail is the performance of a certain number of operators that is entirely caused by luck, what is called the AxeJUpmCQAAIYe9“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

Learning to Love Volatility

The nastiest thing I’ve ever told anyone(a finance fellow angry with me): “When you have absolute intellectual and more disrespect for someone, the only real compliment you can possible get from his in making him angry”

“In economic life and history more generally, just about everything of consequence comes from black swans; ordinary events have paltry effects in the long-term.”    –Nassim Nicholas Taleb

Nassim Taleb’s contribution to the world of finance are two fascinating concepts Continue reading

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