Wednesday, October 15, 2008

Black Swans Worldwide:
"Investors advised by ``Black Swan'' author Nassim Taleb have gained 50 percent or more this year as his strategies for navigating big swings in share prices paid off amid the worst stock market in seven decades."
and later:
"``I am very sad to be vindicated,'' Taleb said today in an interview in London. ``I don't care about the money. We're proud we protected our investors.''

For more on Taleb's book see here: The Black Swan: the Impact of the Highly Improbable by Nassim Nicholas Taleb. Wow. Not only does Taleb explain what I have wanted to say (some things just happen out of the blue and by their very nature are unpredictable) but he does so in a funny, entertaining, and remarkably sticky. Taleb sets much of what we rely on on its head. For instance, you will never think of stats the same way—you will find yourself thinking more about tails Not only does this way of thinking have huge financial implications (consider managing a large fund, you may be hedged against things you can think of, but not other Black Swan events), it also should have implications in many many walks of life. For instance, before BonaResponds goes to a disaster area, we concede we can not prepare for what we did not know. Rather than plan for an infinite number of eventualities, we plan to be flexible enough to adapt to whatever happens. The same is true in most businesses, armies, governments, and even many personal dealings. VERY good and important book. BTW Be sure to read the Prologue. Even if the rest of the book were not included, I would have been happy with my purchase BEFORE page 1.

The Economic Naturalist: in Search of Expl

thanks to Brandan for pointing this out to me!

No comments: