{"id":1763,"date":"2010-06-22T15:19:57","date_gmt":"2010-06-22T22:19:57","guid":{"rendered":"tag:google.com,2005:reader\/item\/5acbf87a866eab94"},"modified":"2010-06-22T15:19:57","modified_gmt":"2010-06-22T22:19:57","slug":"nassim-taleb-hugh-hendry-larry-mcdonald-at-gaim-2010-monaco-market-melange","status":"publish","type":"post","link":"https:\/\/www.blackswanreport.com\/blog\/2010\/06\/nassim-taleb-hugh-hendry-larry-mcdonald-at-gaim-2010-monaco-market-melange\/","title":{"rendered":"Nassim Taleb, Hugh Hendry, Larry McDonald at GAIM 2010 Monaco | Market Melange"},"content":{"rendered":"

Shared by JohnH
\n
\nGoes on to report a debate between Hugh Hendry and Michael Novogratz.<\/p><\/blockquote>\n

The program offered, as usual, stimulating and entertaining presentations and debates. The return of Nassim Taleb was not a black swan event.\u00a0 He seems to have become bitterer in his crusade against Sharpe-ratio and model-wielding financial \u201cpundits\u201d: while last year he was campaigning for a world that is more robust to black swans, this year he\u2019s fighting for a society that is \u201crobust to bullshitters\u201d (my Word spell checker suggests \u201cbulls hitters\u201d). When I suggested to him that models would be quite harmless and even useful\u00a0 if the people who use them 1) understood them and 2) applied common sense, he replied that asking people to use common sense is like asking them to stop their heart beat. That seems to be a quite radical and not constructive stance. If people are so stupid, what\u2019s the point in writing smart books?<\/p>\n

Fearful of being included in the \u201cno common sense\u201d category, I\u2019ve decided to become an admirer and a follower of Fat Tony, the \u201chorizontally challenged\u201d fictional character introduced by Taleb in Chapter 9 of the Black Swan. Fat Tony is a highly practical and commonsensical \u201csuccessful nonnerd with a happy disposition\u201d and the title to Taleb\u2019s next book. Two chapters of Fat Tony can be previewed from Taleb\u2019s website: see \u00a0Fat Tony 1<\/a><\/strong> and Fat Tony 2<\/a><\/strong>.<\/p>\n

Repetita juvant<\/em> (repetition helps), the wise ancient Romans used to say, and there was a fair amount of repetition of old slogans in Taleb\u2019s speech. However, for the benefit of the bearly<\/em> awake and of the bulls hitters, here is another rehash. You\u2019ve just boarded a plane headed to Rome, when the captain announces: \u201cHi folks, welcome to this flight to Rome. Just to let you know that we couldn\u2019t get a map of the airways to Rome; we have a map of the airways to Berlin, but, hey, that\u2019s all we have, so that\u2019s what we\u2019re going to use, and anyway, Rome and Berlin are pretty close to each other.\u201d Naturally no passenger would accept to fly under those conditions \u2026 well, at least those with some common sense left in them, err \u2026 Anyway, says Taleb, why would anybody insist in using models that are known not to explain the reality at hand, just because those are the only models available?<\/p>\n

Obvious observation, you might think, but ask yourself that question again next time you are confronted with standard deviations, Sharpe ratios, Value at Risk, or even cointegration, in a practical context. The repetition might indeed be helpful.<\/p>\n","protected":false},"excerpt":{"rendered":"

Shared by JohnH <\/p>\n

Goes on to report a debate between Hugh Hendry and Michael Novogratz.
\nThe program offered, as usual, stimulating and entertaining presentations and debates. The return of Nassim Taleb was not a black swan event.\u00a0 He seems to have be…<\/p>\n","protected":false},"author":14,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-1763","post","type-post","status-publish","format-standard","hentry","category-feeds"],"_links":{"self":[{"href":"https:\/\/www.blackswanreport.com\/blog\/wp-json\/wp\/v2\/posts\/1763","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.blackswanreport.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.blackswanreport.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.blackswanreport.com\/blog\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/www.blackswanreport.com\/blog\/wp-json\/wp\/v2\/comments?post=1763"}],"version-history":[{"count":1,"href":"https:\/\/www.blackswanreport.com\/blog\/wp-json\/wp\/v2\/posts\/1763\/revisions"}],"predecessor-version":[{"id":1930,"href":"https:\/\/www.blackswanreport.com\/blog\/wp-json\/wp\/v2\/posts\/1763\/revisions\/1930"}],"wp:attachment":[{"href":"https:\/\/www.blackswanreport.com\/blog\/wp-json\/wp\/v2\/media?parent=1763"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.blackswanreport.com\/blog\/wp-json\/wp\/v2\/categories?post=1763"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.blackswanreport.com\/blog\/wp-json\/wp\/v2\/tags?post=1763"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}