Nassim Taleb Makes Billions and Attacks Richard Dawkins

Quote from marketsurfer:

i am certain there is a plethora of investors who didnt get what they expected in empirica, so they come here spreading innuendo and rumours of falsehoods with no proof of their own statements. suggest paying them no mind and sticking to facts....

surf
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I don't know about that, but I do know that his stint at Paloma Partners is not mentioned on his Wikipedia hagiography. As I mentioned it is after his claim of 1987 riches, so it is odd that he would take a stint as a trader at Paloma, and then clearly did not like being sidelined to research. His claims may be true, but it doesn't seem to track. Why tolerate the Paloma treatment if he had made his F.U. money?

According to Bloomberg: "As the founder and manager of New York-based Empirica LLC, a hedge fund firm he ran for six years until he closed it in 2004." Taleb called it a hedge fund at a conference I attended and then later said it wasn't. Whatever. But it is fair to ask due diligence questions to get clarification:

http://72.14.205.104/search?q=cache...f+Empirica+Kurtosis"&hl=en&ct=clnk&cd=1&gl=us

EMPIRICA KURTOSIS: To Proceed with Voluntary Wind-Up
----------------------------------------------------
IN THE MATTER OF THE COMPANIES ACT 1981

and

IN THE MATTER OF Empirica Kurtosis Limited

The following Resolutions of Empirica Kurtosis Limited, were
adopted by the sole Member by written consent on December 2,
2004:

1. that the Company be wound up voluntarily pursuant to the
provisions of The Companies Act, 1981; and

2. that Nicholas Hoskins be appointed Liquidator for the
purposes of such winding-up, such appointment to be effective
forthwith.

The Liquidator reports that:

- Creditors of Empirica Kurtosis Limited, which is being
voluntarily wound up, are required, on or before December 30,
2004 to send their full Christian and Surnames, their addresses
and descriptions, full particulars of their debts or claims, and
the names and addresses of their attorneys (if any) to the
undersigned Liquidator of the said Company at Wakefield Quin,
Chancery Hall, 52 Reid Street, Hamilton, Bermuda and if so
required by notice in writing from the said Liquidator, and
personally or by their attorneys, to come in and prove their
debts or claims at such time and place as shall be specified in
such notice, or in default thereof they will be excluded from
the benefit of any distribution made before such debts are
proved.

- A Final General Meeting of the Members of Empirica Kurtosis
Limited will be held at the offices of Wakefield Quin, Chancery
Hall, 52 Reid Street, Hamilton, Bermuda on January 7, 2005 at
10:00 a.m., or soon as possible thereafter, for the purposes of:
having an account laid before them showing the manner in which
the winding-up has been conducted and how the property of the
Company has been disposed of and of hearing any explanation that
may be given by the Liquidator; determining by Resolution the
manner in which the books, accounts and documents of the Company
and of the Liquidator thereof, shall be disposed of; and by
Resolution dissolving the Company.

CONTACT: Mr. Nicholas Hoskins, Trustee
Chancery Hall
52 Reid Street
Hamilton, Bermuda
 
He closed his fund. Funding vehicles are opened and closed for a variety of reasons. There has been no evidence that he did so because of poor performance.

Quote from Greg Richards:

I don't know about that, but I do know that his stint at Paloma Partners is not mentioned on his Wikipedia hagiography. As I mentioned it is after his claim of 1987 riches, so it is odd that he would take a stint as a trader at Paloma, and then clearly did not like being sidelined to research. His claims may be true, but it doesn't seem to track. Why tolerate the Paloma treatment if he had made his F.U. money?

According to Bloomberg: "As the founder and manager of New York-based Empirica LLC, a hedge fund firm he ran for six years until he closed it in 2004." Taleb called it a hedge fund at a conference I attended and then later said it wasn't. Whatever. But it is fair to ask due diligence questions to get clarification:

http://72.14.205.104/search?q=cache...f+Empirica+Kurtosis"&hl=en&ct=clnk&cd=1&gl=us

EMPIRICA KURTOSIS: To Proceed with Voluntary Wind-Up
----------------------------------------------------
IN THE MATTER OF THE COMPANIES ACT 1981

and

IN THE MATTER OF Empirica Kurtosis Limited

The following Resolutions of Empirica Kurtosis Limited, were
adopted by the sole Member by written consent on December 2,
2004:

1. that the Company be wound up voluntarily pursuant to the
provisions of The Companies Act, 1981; and

2. that Nicholas Hoskins be appointed Liquidator for the
purposes of such winding-up, such appointment to be effective
forthwith.

The Liquidator reports that:

- Creditors of Empirica Kurtosis Limited, which is being
voluntarily wound up, are required, on or before December 30,
2004 to send their full Christian and Surnames, their addresses
and descriptions, full particulars of their debts or claims, and
the names and addresses of their attorneys (if any) to the
undersigned Liquidator of the said Company at Wakefield Quin,
Chancery Hall, 52 Reid Street, Hamilton, Bermuda and if so
required by notice in writing from the said Liquidator, and
personally or by their attorneys, to come in and prove their
debts or claims at such time and place as shall be specified in
such notice, or in default thereof they will be excluded from
the benefit of any distribution made before such debts are
proved.

- A Final General Meeting of the Members of Empirica Kurtosis
Limited will be held at the offices of Wakefield Quin, Chancery
Hall, 52 Reid Street, Hamilton, Bermuda on January 7, 2005 at
10:00 a.m., or soon as possible thereafter, for the purposes of:
having an account laid before them showing the manner in which
the winding-up has been conducted and how the property of the
Company has been disposed of and of hearing any explanation that
may be given by the Liquidator; determining by Resolution the
manner in which the books, accounts and documents of the Company
and of the Liquidator thereof, shall be disposed of; and by
Resolution dissolving the Company.

CONTACT: Mr. Nicholas Hoskins, Trustee
Chancery Hall
52 Reid Street
Hamilton, Bermuda
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My point is that there is no evidence either way, but in my experience, fund managers don't get bored with funds that are performing well. It is a fair question to ask if it slowly bled and what sort of return investors ultimately received.

It seems the link is no longer applicable, but the original information came from: http://bankrupt.com/TCRLA_Public/041207.mbx which is "Troubled Company Reporter"

The kind of issues I raise about background and representations are standard due diligence questions.
 
NT states time and time again he could care less about money.

in addition, he had a severe health scare around the same time empirica was wrapped up.... correlation, i would suggest so, but not certain.

surf
 
This is a very fair point. The circumstance of the fund's closing is obvious of a big due diligence item.

Moreover, if the fund that taleb is running is the type that does nothing for a few years and then give great return when ever things else go down the drain (there have been several funds in the recent past that did that), then "slow bleed" isn't really applicable is it? I would argue that from an asset allocation perspective, this sort of uncorrelated alpha is far more important than yet-another-levered-momentum strategy

Quote from Greg Richards:

My point is that there is no evidence either way, but in my experience, fund managers don't get bored with funds that are performing well. It is a fair question to ask if it slowly bled and what sort of return investors ultimately received.

It seems the link is no longer applicable, but the original information came from: http://bankrupt.com/TCRLA_Public/041207.mbx which is "Troubled Company Reporter"

The kind of issues I raise about background and representations are standard due diligence questions.
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Quote from marketsurfer:

NT states time and time again he could care less about money.

in addition, he had a severe health scare around the same time empirica was wrapped up.... correlation, i would suggest so, but not certain.

surf
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So he claims, but what does that have to do with the returns? But as I say, he lets representations and rumors of wealth bleed into the market, so it seems he may care very much about the appearance of great wealth, but middle class may have been the reality. My point is that the representations bear scrutiny. Now he is involved with a fund once more, so the questions are fair. Instead of facts and answers, one gets incomplete information on Wikipedia and excuses about health scares instead of audited returns for Empirica.

While this may mean nothing, or it may mean he is simply embarrassed about underperformance and doesn't want to bring it up, now that he is associated with a fund, more transparency is in order. Again, while it may be nothing, and there may be verifiable explanations, they haven't been provided. These issues are red flags for anyone doing due diligence.
 
Again, your points are very fair - if you were the done doing due dilligence on his new fund. If you were, I'd expect you drill down to the core of these questions.

But you are not. Taleb has no obligation to provide the general public with any information. He's not raising public money and he's certainly not soliciting. As far as I can recall, he has never even claimed that he's a great investor, just a great thinker (he is egotistical, that's for sure).

It's entirely possible that his emperica fund was terrible (and here's the weakness of taleb's thesis: how can we distinguish between a poor performance and a "it just didn't happen yet" bias). But we lack evidence. And we don't have standing to ask.

Quote from Greg Richards:

So he claims, but what does that have to do with the returns? But as I say, he lets representations and rumors of wealth bleed into the market, so it seems he may care very much about the appearance of great wealth, but middle class may have been the reality. My point is that the representations bear scrutiny. Now he is involved with a fund once more, so the questions are fair. Instead of facts and answers, one gets incomplete information on Wikipedia and excuses about health scares instead of audited returns for Empirica.

While this may mean nothing, or it may mean he is simply embarrassed about underperformance and doesn't want to bring it up, now that he is associated with a fund, more transparency is in order. Again, while it may be nothing, and there may be verifiable explanations, they haven't been provided. These issues are red flags for anyone doing due diligence.
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Quote from sjfan:

Again, your points are very fair - if you were the done doing due dilligence on his new fund. If you were, I'd expect you drill down to the core of these questions.

But you are not. Taleb has no obligation to provide the general public with any information. He's not raising public money and he's certainly not soliciting. As far as I can recall, he has never even claimed that he's a great investor, just a great thinker (he is egotistical, that's for sure).

It's entirely possible that his emperica fund was terrible (and here's the weakness of taleb's thesis: how can we distinguish between a poor performance and a "it just didn't happen yet" bias). But we lack evidence. And we don't have standing to ask.
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But he is doing PR and mentions the fund, so these are fair questions. Bernie Madoff depended on this type of word-of-mouth buzz to attract funds. I am not comparing him with Madoff except for the hype.

While Taleb has no obligation to provide the general public with spin, he seems to have done just that.

I have every right to question, as does anyone else who has heard the hype.
 
He's hyping his new fund? Really? Because I'm pretty the SEC would like to know about that.

See, if some guy goes around CNBC and claim to be an awesome manager; than surely it'd be extremely suspicious that if his fund shuts down quietly and is never mentioned again. Again, as far as I know, taleb doesn't do that; Therefore, the closing of his vehicles doesn't carry nearly the same signal content as in the first case.

And of course you have every right to ask any question you want. But taleb is under zero obligation to answer you. My point is that his silence is in his case and in itself not particularly indicative of anything.

Quote from Greg Richards:

But he is doing PR and mentions the fund, so these are fair questions. Bernie Madoff depended on this type of word-of-mouth misinformation to attract funds. I am not comparing him with Madoff except for the hype.

I have every right to question, as does anyone else who has heard the hype.
More...
 
Quote from sjfan:

My point is that his silence is in his case and in itself not particularly indicative of anything.
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I never said he hyped his fund, he is hyping his image. So I am raising questions about that. He doesn't have to answer, but equally he is quick to hype himself.

As for fund investors, for anyone looking to invest it is a red flag, so I hope his fund investors do due diligence, and they might ask him why he is reluctant to answer these questions, and why the public hype sidesteps them. Likewise, why does his public hype omit this background information?

It could be nothing, but everyone has the right to ask questions--and in my opinion, should ask questions--when they are subjected to public hype and media manipulation.
 
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