Nasim Taleb Speaks Wednesday
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I haven't read the swan book yet, but from what I recall of the black swan reference in his Fooled By Randomness, I think it had more to do with the greater frequency of "unexpected" meaningful events than what historical testing would have you believe. Your reference to r/r is not necessarily relevant and may be beside the point because such a measure can be materially altered with leverage, all else being equal. Of course, that is just my take on it.
I understand fat tails concept , something that should happens ones in 500 years , in reality happens much often. But what financial damage must be done ( after the fact) in dollars or r/r for ppl to go back and say this was a BS ? 20% overnite loss ? 50% ? 90? Or maybe if one loses it all and STILL owns 10 times more because of margins/leverage
it's important to remember that while The Black Swan is written for an erudite,educated, and literate audience, its still a mass market, entertaining book. its not an academic tome or a how to book .
i just completed reading The Black Swan. It contains multiple interesting insights and unique ways to view situations, comes with my highest recommendations!
enjoy!
surf
i just completed reading The Black Swan. It contains multiple interesting insights and unique ways to view situations, comes with my highest recommendations!
enjoy!
surf
This new book so far is about errors in cognition, how even experts such as statisticians, when walking about town, going shopping make huge errors in judgements that are statistical in nature.
Also the idea of developing models based on past behaviours is criticized by means of a comparison to a world war II reporter that wrote about the war in the context of "Now" rather than postfacto. The idea that their are 1000s of potential causes for events, but often after the event, we settle into a judgement about the event and draw up a conclusion because it suits the judgement or seems to answer how life is as it is after the event... he does a better job of explaining.
In general this is a great book with zero bullshit if you get past his need for intellectual prose and constant reference to other pieces of literary history. I think for traders, it is as good as something along the lines of Market Wizards, but this is a whole book devoted to Talebs life work and philosophy of these events with a definitely open concept to it.
Also the idea of developing models based on past behaviours is criticized by means of a comparison to a world war II reporter that wrote about the war in the context of "Now" rather than postfacto. The idea that their are 1000s of potential causes for events, but often after the event, we settle into a judgement about the event and draw up a conclusion because it suits the judgement or seems to answer how life is as it is after the event... he does a better job of explaining.
In general this is a great book with zero bullshit if you get past his need for intellectual prose and constant reference to other pieces of literary history. I think for traders, it is as good as something along the lines of Market Wizards, but this is a whole book devoted to Talebs life work and philosophy of these events with a definitely open concept to it.
If I am correct, then you are still missing the point. R/R is not so much event specific as it is trader specific. The same event may provide an entirely different R/R outcome even for two traders betting on the very same outcome but in a different way. So who is to say that, for the very same event, one trader's R/R is the defining measure of a "black swan" whereas the other trader's R/R is not? It is the unexpected event that is the so-called black swan, not how you played it (R/R). Again, that's just my take on the matter.
I have read the article Thunderdog posted at east 9 times since last night.
I am eccentric in that I read things that I truly enjoy over and over, even after I have already absorbed the content.
What I find brilliant is that what Taleb does is so contrary to every natural intuition AND every socially-ingrained desire I have. I want instant gratification. I want immediate results.
Like Niederhoffer, I want to observe objective and readily quantifiable measures of success, in the form of a consistent and steady stream of results, piling higher and ever higher.
But here is Taleb, with this strategy that is the antithesis of my intuitions and what I have been socially conditioned to want, willing to lose money, in the form of a consistent and steady stream of negative results, reducing his pile of wealth to a lower and ever lower...
....while knowing full well that the black swan will eventually show up, recouping all those painful losses, that may have been a decade in the making, and recoup all those losses and then some (and not just some, but 'some' by a vast amount, apparently, as long as you're positioned properly).
But there's no way to know when the next black swan will reveal itself, and it this factoid that pressures us tremendously. Unlike a laboratory rat, conditioned to receive cheese by pressing a lever, there are no levers by which to effectuate any control over our circumstances. There is no cheese or reward the overwhelming majority of the time. In fact, there are electrical jolts on a regular basis.
I don't think people should be so dismissive of the fundamental brilliance of this philosophy, because it deals not just with matters of the head/logic, but the heart/desires, too.
It forces most individuals in our society to abandon the very foundation upon which their expectations of risk and reward operate.
I know it would force me to do so.
I am eccentric in that I read things that I truly enjoy over and over, even after I have already absorbed the content.
What I find brilliant is that what Taleb does is so contrary to every natural intuition AND every socially-ingrained desire I have. I want instant gratification. I want immediate results.
Like Niederhoffer, I want to observe objective and readily quantifiable measures of success, in the form of a consistent and steady stream of results, piling higher and ever higher.
But here is Taleb, with this strategy that is the antithesis of my intuitions and what I have been socially conditioned to want, willing to lose money, in the form of a consistent and steady stream of negative results, reducing his pile of wealth to a lower and ever lower...
....while knowing full well that the black swan will eventually show up, recouping all those painful losses, that may have been a decade in the making, and recoup all those losses and then some (and not just some, but 'some' by a vast amount, apparently, as long as you're positioned properly).
But there's no way to know when the next black swan will reveal itself, and it this factoid that pressures us tremendously. Unlike a laboratory rat, conditioned to receive cheese by pressing a lever, there are no levers by which to effectuate any control over our circumstances. There is no cheese or reward the overwhelming majority of the time. In fact, there are electrical jolts on a regular basis.
I don't think people should be so dismissive of the fundamental brilliance of this philosophy, because it deals not just with matters of the head/logic, but the heart/desires, too.
It forces most individuals in our society to abandon the very foundation upon which their expectations of risk and reward operate.
I know it would force me to do so.
hmmm , without r/r ( again , looking at it AFTER the fact) is very cloudy.
I didn't read his book , but I read some posts that had few quotes from the book. Let say that events of 29 and 87 had odds of 1:200 but actually happened every 50 years. Does its means if nothing will happens in the next 300 years we will be back to normal distro and ppl stop calling 29 and 87 as a black swan ?
Can I then ask for my money back ( book) ?
ByLoSellHi,
Although I, too, enjoyed reading it, I'm afraid that I can't take credit for posting the article.
Although I, too, enjoyed reading it, I'm afraid that I can't take credit for posting the article.
Yes, I think I read somewhere that he offers a 300-year money-back guarantee, but only at the end of the period. Be sure to keep your receipt.Quote from IV_Trader:
hmmm , without r/r ( again , looking at it AFTER the fact) is very cloudy.
I didn't read his book , but I read some posts that had few quotes from the book. Let say that events of 29 and 87 had odds of 1:200 but actually happened every 50 years. Does its means if nothing will happens in the next 300 years we will be back to normal distro and ppl stop calling 29 and 87 as a black swan ?
Can I then ask for my money back ( book) ?