Nassim Taleb Makes Billions and Attacks Richard Dawkins

Quote from Greg Richards:

Again, this is his hype. What the market needs is a better sense of smell.

He did it? He was an advisor to the fund, and the fund's managers may feel they are owed the credit. More than that, if there is a "pact of silence," then why is Taleb blabbing? Like the Madoff fund, no one should take this at face value. The market upturn may have erased at least some of those gains. His earlier claims of trading prowress don't track, as I've pointed out earlier, so I would want to see audited financials before I would believe public boasting. Someone earlier said he wasn't hyping his fund, then what is this?

To my earlier point, why is he boasting in public about the returns, if the proof is not made public? Everyone should question PR and hype, and when it is dished out like this, one should say "prove it," along with Taleb's earlier claims, since indicators for his earlier claims point in the opposite direction of his public hype. I don't trust this guy as far as I can throw him.

The fund is called Universa. Taleb frequently consults with Universa’s traders, but the fund is owned and managed by Mark Spitznagel. He was pit trader on the Chicago Board of Trade. It started with $300 AUM and now has $2 billion AUM. Notice that is AUM, and not the actual total gain. While Taleb may have received a nice payday, it is nothing like the representations you claim he made in that article, and if he did make those claims, then it is just more hype, or rather it seems to be a lie, so why would you trust this person?
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Trust me, Will Self and his editors are not going to misquote anyone. see the article for yourself.

surf
 
Quote from marketsurfer:

Trust me, Will Self and his editors are not going to misquote anyone. see the article for yourself.

surf
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Thanks, surf, I just found the article, I hadn't realized you were referring to the link; it is on the first page. Taleb is his own Greek tragedy. Not content to be a successful author, he has to hype past claims that no one can verify, and indicators like his Paloma stint and the Empirica unwind suggest otherwise. Now this. Not content with good results, he has to pretend he was John Paulson. It's delusional.
 
To put a more generous interpretation, perhaps he meant the gain in the fund was 1/2 billion, and the fund advised other outside clients who themselves made $20 billion, but that is a far cry from Taleb making billions. Likewise the "we made $20 billion for our clients" would have to be further explained. If he advised clients, they no doubt had their own thougths and decided what to do. They made the money; he didn't make it for them--unless they were investors in the fund, but that doesn't appear to be the case here.
 
Quote from Greg Richards:

To put a more generous interpretation, perhaps he meant the gain in the fund was 1/2 billion, and the fund advised other outside clients who themselves made $20 billion, but that is a far cry from Taleb making billions.
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That is my understanding of te situation.

Now someone asked for evidence about Empirica's performance, here is the quote from the WSJ article:

http://www.cashandburn.com/2008/11/taleb-makes-money-where-his-mouth-is.html

"While the black-swan strategy has paid off handsomely this year, it hasn't always. Mr. Taleb's previous fund, Empirica Capital, which used similar tactics, shut down in 2004 after several years of lackluster returns amid a period of low volatility."

Now if we do the math, Taleb's new fund should have at least 800 million AUM. What I don't get is, how did he get so much money to play with when his previous fund's performance was lacking??? It must be good PR and the fame of his name...

Edit:"Universa was launched in December 2007 with $300 million in assets. It is now estimated to be worth close to $2 billion. Technically Taleb is an “external advisor” to Universa, which is managed and owned by former professional trader Mark Spitznagel."

http://seekingalpha.com/article/104974-nassim-taleb-renegade-trader-with-renegade-ideas-that-work
 
I believe Taleb's spiel is inflated B.S. It is unlikely that his (or his partner’s) strategy made $20 billion even on an advisory basis, if the advice was simply buying out of the money put options on the stock market. I do not believe there is enough volume available in the traded markets to come remotely close (one could look at open interest records I guess to see what percentage the aggregate would have had to own to make $20 billion).

It would be hard for Taleb or the people he advised to justify buying OTC given that a Black Swan event would likely wipe out his foolish counterparts. Lots of credit risk there, and he doesn't say how he protects himself from his counterparty credit risk.

It has a similar inconsistent ring of Madoff’s claims pre-scandal that he made the “steady” profits in put-call spreads, which would have required markets and his fund’s capital to be much larger by orders of magnitude, if that were the strategy he used.
 
Quote from Greg Richards:


It would be hard for Taleb or the people he advised to justify buying OTC given that a Black Swan event would likely wipe out his foolish counterparts. Lots of credit risk there, and he doesn't say how he protects himself from his counterparty credit risk.
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Great point.
 
Quote from Pekelo:

What I don't get is, how did he get so much money to play with when his previous fund's performance was lacking??? It must be good PR and the fame of his name...
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"Lackluster" != "Lacking"

People were chasing outsized returns. Over short time horizons, that is the exact opposite of Taleb's approach. They got burned. Lesson (probably not) learned.
 
Quote from Greg Richards:

I believe Taleb's spiel is inflated B.S. It is unlikely that his (or his partner’s) strategy made $20 billion even on an advisory basis, if the advice was simply buying out of the money put options on the stock market. I do not believe there is enough volume available in the traded markets to come remotely close (one could look at open interest records I guess to see what percentage the aggregate would have had to own to make $20 billion).

It would be hard for Taleb or the people he advised to justify buying OTC given that a Black Swan event would likely wipe out his foolish counterparts. Lots of credit risk there, and he doesn't say how he protects himself from his counterparty credit risk.

It has a similar inconsistent ring of Madoff’s claims pre-scandal that he made the “steady” profits in put-call spreads, which would have required markets and his fund’s capital to be much larger by orders of magnitude, if that were the strategy he used.
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Taleb's tragedy is that he seems discontented with what success he has achieved and has need to claim he's on the level of a John Paulson--but he is not. The constant PR puffery seems delusional. I wish I could find it funny, but I pity the guy.

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