Tag Archive | "taleb"

Why Taleb is Wrong About Markets and Uncertainty

Monday, November 26, 2012


Once you cut through the layers of purple prose and elective neologism, Nassim Nicholas Taleb’s central thesis is not hard to understand: people often know less than they think that they do, and some human affairs are arranged so that they are negatively, neutrally, or positively affected by surprising events. His prior work has focused on large, unlikely risks – cases where agents who think they are neutrally oriented or robust to surprises are actually fragile when the unexpected happens.…

Shouldn’t Taleb and Kahneman Disagree? – UPDATED

Wednesday, March 18, 2009


On January 27, 2009, Nassim Taleb and Daniel Kahneman shared a stage for an hour or so.  We finally got around to watching the video, which is embedded below. It is a bit surprising to learn that the speakers seem to regard each other’s work positively. Here’s an oversimplification of their key theses: Kahneman: Prospect Theory says that given some symmetric variation in gains and losses, humans tend to weight losses more heavily.  We are risk averse toward unlikely…

Cygnophobia and Robustness

Thursday, December 11, 2008


What is fear of swans called? We’ve searched and although it doesn’t seem to exist – so far – can we suggest ‘cygnophobia’, from the latin cygnus for swan? -WikiAnswers People love them some Taleb, and for good reason.  Both The Black Swan and Fooled by Randomness are good reads, with interesting and provocative ideas scattered liberally throughout.  But ever since the notion of the “black swan” (an unpredictable and counterfactually inexplicable event with…

Financial Geekery Mini-linkfest

Monday, October 6, 2008


When the market is frustrating or weird or mostly untouchable, we find that’s usually the best time to geek out.  The research linked below has, beyond its immediate educational value, the hidden benefit of also being difficult and long enough to keep you from overtrading and/or obsessing about day-to-day nonsense. Emanuel Derman on models. More on volatility as an asset class.  We expressed our doubts about pursuing this notion qua retail traders here.  Obviously, there are variance and…

Random Walks and Random Jumps: Taleb on Volatility

Wednesday, September 17, 2008


Nassim Nicholas Taleb, author of the widely discussed The Black Swan and Fooled By Randomness, is out with a new paper.  “The Fourth Quadrant: A Map of the Limits of Statistics” pursues a thesis very familiar to his readers, namely that economists and finance professionals put society at risk by offering false comfort in the form of statistical models. Risk Does Not Equal Volatility The novel effort here is Taleb’s attempt to map out which kinds of risks and…

The Syntax of Elliot Wave Theory

Tuesday, June 3, 2008


Hilarious chart via EliteTrader (h/t Barry) of the dreaded Black Swan discussed in Nassim Nicholas Taleb’s book of the same name. Why are Elliot Wave dudes so humorless? A commenter at The Big Picture chides: While you may be joking around, an Elliot Wave Technician will tell you that what you’re observing is actually a very ominous pattern. The five wave move down that completed in March may have only been an initial first wave down….we’ve recently completed…

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Jared Woodard specializes in trading volatility as an asset class. With over a decade of experience trading options and other volatility products ... Read More


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