Monthly Archives: October 2013


In some domains, “evidence” comes too late. The good news is that we have a methodology to bust these claims and make the difference between *true* and *fake* evidence.
This shows why the Law of Large Numbers makes evidence slower under fat tails (In some domains, only *negative* evidence counts). And this is the method we are using in statistics to bust sloppy and fallacious (mechanistic) thinking by applying an inferential technique on a problem for which we know the answer.
Incidentally this is exactly what Pinker doesn’t get: scientific “evidence” is NOT journalistic fact checking. And this is why I consider that advocates of GMOs on grounds of “science” are dangerous.

Timeline Photos – Nassim Nicholas Taleb.

A Dozen Things I’ve Learned from Nassim Taleb about Optionality/Investing | 25iq

Excellent! See the entire list, link below.

A Dozen Things I’ve Learned from Nassim Taleb about Optionality/Investing

1. ”Optionality is the property of asymmetric upside (preferably unlimited) with correspondingly limited downside (preferably tiny).”  Venture capital, when practiced properly by a top tier firm, is a classic example of a business that benefits from optionality. All you can lose financially in venture capital is what you invest and your upside can be more than 1000X of what you invested.  Another example of optionality is cash held by a disciplined patient value investor with the temperament to not buy until Mr. Market is fearful.  As just one example, Warren Buffett did exactly this during the recent financial panic and earned $10 Billion by putting his cash to work.  Seth Klarman, Howard Marks and other value investors use dry powder in the form of cash to harvest optionality since Mr. Market is bi-polar.

2. ”‘Long volatility’ in trader parlance, has positive optionality.” As an example, the optionality of cash allows the holder to buy assets from people who were “short volatility” when a crisis hits. The wise value investor sits and waits patiently for Mr. Market to deliver a fearful market and when the intrinsic value of a company’s shares presents a “margin of safety” buys in quantity.

3. “If you ‘have optionality,’ you don’t have much need for what is commonly called intelligence, knowledge, insight, skills, and these complicated things that take place in our brain cells. For you don’t have to be right that often. All you need is the wisdom to not do unintelligent things to hurt yourself (some acts of omission) and recognize favorable outcomes when they occur. (The key is that your assessment doesn’t need to be made beforehand, only after the outcome.)”  Being able to make decisions which do not require correctly forecasting the future is a wonderful thing.  Not one of the great value investors identified in the series of posts in this blog relies on macro forecasts of the future.  Instead, value investors use the optionality of cash to buy after the outcome exists (i.e., a significant drop in intrinsic value). Regarding venture capital, Warren Buffett believes:  “If significant risk exists in a single transaction, overall risk should be reduced by making that purchase one of many mutually- independent commitments.  Thus, you may consciously purchase a risky investment – one that indeed has a significant possibility of causing loss or injury – if you believe that your gain, weighted  for probabilities, considerably exceeds your loss, comparably weighted, and if you can commit to a number of similar, but  unrelated opportunities.  Most venture capitalists employ this strategy.”

A Dozen Things I’ve Learned from Nassim Taleb about Optionality/Investing | 25iq.

On the strength of new evidence, upgraded Dobelli to “Serial Plagiarist”…

On the strength of new evidence, upgraded Dobelli to “Serial Plagiarist”. And to follow my duties, the matter is far from over, but no longer in my hands as I completed my obligations.
So I am closing my part of the Dobelli plagiarism. The problem is that instead of coming clean, and moving on, he responded by attacking and waging a press campaign with his journalist friends.

Rolf Dobelli’s Case

UPDATE: The UK edition (which sold the bulk of the English language copies since the book flopped in the U.S.) does not have a citation section, making the defense that he cited me “30+ times” a complete misrepresentation. Some of my readers also showed evidence that he also plagiarizes my lectures!…

(1) On the strength of new evidence, upgraded… – Nassim Nicholas Taleb.