Nasim Taleb Speaks Wednesday

[annaland]

Quote from NTB:

One could make a strong case that "..the greatest risk of all is not taking risk" (AIG Commercial). In other words attempting to be overly prepared for a black swan event, or in fact prepared at all, could and in fact has lead to imminent disaster quicker than had an actual black swan event occurred.

In a black and white world:
By preparing for a black swan you're taking on as much, if not more, risk than if you were preparing for a "white swan". If that's what you meant, then I agree.

However, if there is some gray in the world, then there (to some extent) exists the option of avoiding all swans completely. If so, then the above becomes invalid and the greatest risk is no longer not taking risk.

 

[Maverick74]

Quote from NTB:

How about examining the flip side of Taleb's argument and looking at the risk of no Black Swan event. This may be more relevant to today's environment and more relevant to the money management industry. One could make a strong case that "..the greatest risk of all is not taking risk" (AIG Commercial). In other words attempting to be overly prepared for a black swan event, or in fact prepared at all, could and in fact has lead to imminent disaster quicker than had an actual black swan event occurred. Furthermore, a true black swan event might have reprecussions so far outside of the norm that current protections would seem useless (ie. capital controls/seizures, lawlessness, bailouts, currency debasement, etc.). While I am not overly familiar with Taleb's work, there seems to be many moving parts and aspects to this issue worthy of exploration. In today's forgiving money management environment, it's a wonder more aren't exercising their free OPM option in a major way.

Neal,

Taleb has never stated that he trades for the black swan event. I have no idea why ET continues to promote this idea. His comments regarding black swans are that he wishes not to be hurt by them. In fact, the way he phrases it is, traders often suffer their misfortune at the hands of bad luck. I choose to not only escape the bad luck, but to profit from it, if possible. That is not word for word, but close. It would help a little bit if those that criticized him on here would at least take the time to read his book first. These comments are not aimed at you Neal.

 

[Bernoulli]

Quote from Maverick74:

Neal,

Taleb has never stated that he trades for the black swan event. I have no idea why ET continues to promote this idea. His comments regarding black swans are that he wishes not to be hurt by them. In fact, the way he phrases it is, traders often suffer their misfortune at the hands of bad luck. I choose to not only escape the bad luck, but to profit from it, if possible. That is not word for word, but close. It would help a little bit if those that criticized him on here would at least take the time to read his book first. These comments are not aimed at you Neal.

I got the impression he does trade for the black swan event from the New Yorker article a few years ago about him and Niederhoffer (I think it was written by Malcolm Gladwell). It's been a few years since I read it but that was my impression.

 

[Maverick74]

Quote from Bernoulli:

I got the impression he does trade for the black swan event from the New Yorker article a few years ago about him and Niederhoffer (I think it was written by Malcolm Gladwell). It's been a few years since I read it but that was my impression.

I read that article. He was simply pointing out that he was frequently on the other side of Neidererhoffer's trades. For example, during the crash of 87 and on 9/11, Neiderhoffer suffered large losses while he earned phenomenal gains. He was merely making a point.

 

[Prevail]

he might not be black swan hunting but he is looking for high sigma events.

 

[late apex]

The New Yorker article

 

[paretolevi]

taleb says he does not hunt for black swans but covers them. in fact he is mostly short options/covered tails. he is like nero tulip.
he hates gladwell article but he does not want to say it because article sold a lot of books for him.

 

[marketsurfer]

Quote from paretolevi:

taleb says he does not hunt for black swans but covers them. in fact he is mostly short options/covered tails. he is like nero tulip.
he hates gladwell article but he does not want to say it because article sold a lot of books for him.

he says it. --calls the article a "narrative fallacy"--admits it sold tons of books but for the wrong reasons. however, he also states, that the right reasons are boring. complete review of launch coming soon....

surf

 

[ByLoSellHi]

Quote from late apex:

The New Yorker article

Thanks for posting that. Amazingly excellent read.

You may have made my month. Seriously.


Let's post great articles when we find them. I would never have come across this if apex didn't post it.

 

[ByLoSellHi]

Wow. This article is amazing.

I'm trying to watch the markets, even though I'm not real active today, and biz has been slow on the development side, but I can't stop reading this article.