Tag Archives: Black Swan

nntaleb: Why did the CRISIS Happen? http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1666042

nntaleb: Why did the CRISIS Happen?


This paper —while a standalone invited essay written for a special crisis issue of New Political Economy — synthesizes the various technical documents by the author as related to the financial crisis. It can also be used as a technical companion to The Black Swan(2007-2010).

Keywords: Black Swan, Risk Management, Finance, Markets, Crisis

The Bed of Procrustes (Work in Progress)

HatTip to Dave Lull.

Since aphorisms lose their charm whenever explained, I only hint to the reader the main subject of this book, which corresponds to the central theme of Fooled by Randomness and The Black Swan, though rephrased in an aphoristic style —


The Russian Forum Debate: Marc Faber, Hugh Hendry, Nassim Taleb

Aha! Made it to YouTube.
Nassim Taleb (Synopsis): Go no-risk with a small percent and high-risk with the rest. For the speculative component, short the S&P and be long in precious metals; bet on hyperinflation with OTM calls on gold and puts on bonds; short USTs as long as Bernanke and Summers are in office; trade on the breakup of Europe. Russia is stable.
Link to full video, Taleb is the 3rd speaker. From The Russia Forum 2010: http://2010.therussiaforum.com/news/session-video3/

Click the arrow on the left to play the video on the page. Click the YouTube logo to watch it at YouTube
Taleb Audio Only

Dance With Chance – Making Luck Work For You


In a nutshell, Dance with Chance is all about knowing what you can and cannot predict and, therefore, what you can and cannot control.

Think about it. Every day human beings make decisions. Some are important: should you invest your life savings in the stock market? Others are trivial: should you take an umbrella today? But in both these cases you have no control. The stock market will go up or down, it will rain or it won’t… and there’s nothing you can do about it.

The problem comes when people seek to gain control by making predictions. By consulting an investment expert or a weather forecast, they think they can control the value of their investments or avoid getting wet.

But this is just an illusion. An illusion that psychologists call ‘the illusion of control’.

In many areas of life – the stock market and the weather are just two examples – accurate prediction just isn’t possible. There is always uncertainty about the future in most areas of our lives. Throw in some emotions, such as greed, fear and hope, and human beings’ predictions get even less accurate. So what are we to do?

Fortunately, Dance with Chance comes up with plenty of positive suggestions. Most importantly, it uncovers a ‘paradox of control’ that’s the antidote to the ‘illusion of control’. By knowing when to give up control, we can actually gain more control over many aspects of our lives than we had in the first place.

Dance with Chance: Making Luck Work for You Audio Only.