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I agree - The Black Swan is great. It's a great read with an interesting viewpoint on the Finance world and investment strategies that are sometimes contrary t

by sfalbo 16y ago

I agree - The Black Swan is great. It's a great read with an interesting viewpoint on the Finance world and investment strategies that are sometimes contrary to what the so-called experts say.

tptacek 16y ago
Can I be the contrarian here and suggest that both _Fooled By Randomness_ and _The Black Swan_ are overrated, overlong books consisting largely of impenetrably written anecdotes and roman-a-clefs shellacked onto a few basic, true, valuable ideas about the failings of human psychology? What do either of these books teach you about trading, other than "never forget that shit happens, because your mind will do everything it can to convince that it won't?"
- SkyMarshal 16y ago
  That's one way of looking at it. Some assert that Taleb's work is a tautology, as you seem to, while others, especially in academia, have been trying to disprove/discredit/find flaw in it. I won't try to argue that, but will just point out a few things, in no particular order: - FBR and TBS are both for lay audiences. Taleb has hashed out his ideas in numerous academic papers posted on http://SSRN.com http://SSRN.com as well. - Taleb's ideas have not yet been refuted by academia either, as confirmed by the late, renowned statistician David Freedman (http://en.wikipedia.org/wiki/David_A._Freedman_(statistician) http://en.wikipedia.org/wiki/David_A._Freedman_(statistician...) b/f he died recently. - Can it be both flawed and a tautology? - In investing and trading, knowing what not to do is often easier and more valuable than knowing what to do. All three books I referenced are all about that, though Taleb's are more on a philosophical level than What I Learned. - You get more out of Taleb's books if you also read the stuff he references in his bibliographies, from What I Learned..., to Mandelbrot's (Mis)behavior of Markets (understanding Black Swans in terms of fractal randomness gives it a whole new meaning), to Taleb's first book on trading Dynamic Hedging (where he basically explains his extremely technical trading strategy to hedge and exploit the shit that happens in markets), to the stuff on SSRN. - Most books on trading (or any other kind of advice these days) can be said to overdevelop a single topic or idea. Partly to pad pages, but also partly to drive home the message to the lowest common denominator of their audience. If you're the type that can speed read through the whole thing in a few hours, try not to hold that against them if the content is good. - If his ideas are relatively simple, why does the whole world keep fucking them up? Both the financial crisis and the BP oil spill can be examined from Taleb's framework. Why have governments not realized how fundamental these ideas are and 'robustified' society against 'shit happening'? (these are all rhetorical questions, I know the answers) Someone needs to keep driving them home till we all grok that robustness + redundancy > optimization in many areas. - Nobody in academia, government, or media took him seriously for a long time, even with a Wharton MBA and 99th percentile track record in trading. He said he had to get a PhD to help get his message across. That his ideas may now seem obvious is probably a 'hindsight is 20/20' thing. While I'm at it, I'll just throw in a link for the OP to his good Edge article - The Fourth Quadrant: A Map of the Limits of Statistics. http://www.edge.org/3rd_culture/taleb08/taleb08_index.html http://www.edge.org/3rd_culture/taleb08/taleb08_index.html PS - Do you really find his writing 'impenetrable'? I think it's perfectly clear. Or did you mean something else?
  - tptacek 16y ago
    The world fucks up his simple ideas because the whole nature of his simple ideas is that the human brain is riddled with biases that cause it to misinterpret raw information. Essentially, his core idea is just that misunderstanding risk is human nature.

by sfalbo 16y ago

I agree - The Black Swan is great. It's a great read with an interesting viewpoint on the Finance world and investment strategies that are sometimes contrary to what the so-called experts say.

tptacek 16y ago

Can I be the contrarian here and suggest that both _Fooled By Randomness_ and _The Black Swan_ are overrated, overlong books consisting largely of impenetrably written anecdotes and roman-a-clefs shellacked onto a few basic, true, valuable ideas about the failings of human psychology? What do either of these books teach you about trading, other than "never forget that shit happens, because your mind will do everything it can to convince that it won't?"

SkyMarshal 16y ago
That's one way of looking at it. Some assert that Taleb's work is a tautology, as you seem to, while others, especially in academia, have been trying to disprove/discredit/find flaw in it. I won't try to argue that, but will just point out a few things, in no particular order: - FBR and TBS are both for lay audiences. Taleb has hashed out his ideas in numerous academic papers posted on http://SSRN.com http://SSRN.com as well. - Taleb's ideas have not yet been refuted by academia either, as confirmed by the late, renowned statistician David Freedman (http://en.wikipedia.org/wiki/David_A._Freedman_(statistician) http://en.wikipedia.org/wiki/David_A._Freedman_(statistician...) b/f he died recently. - Can it be both flawed and a tautology? - In investing and trading, knowing what not to do is often easier and more valuable than knowing what to do. All three books I referenced are all about that, though Taleb's are more on a philosophical level than What I Learned. - You get more out of Taleb's books if you also read the stuff he references in his bibliographies, from What I Learned..., to Mandelbrot's (Mis)behavior of Markets (understanding Black Swans in terms of fractal randomness gives it a whole new meaning), to Taleb's first book on trading Dynamic Hedging (where he basically explains his extremely technical trading strategy to hedge and exploit the shit that happens in markets), to the stuff on SSRN. - Most books on trading (or any other kind of advice these days) can be said to overdevelop a single topic or idea. Partly to pad pages, but also partly to drive home the message to the lowest common denominator of their audience. If you're the type that can speed read through the whole thing in a few hours, try not to hold that against them if the content is good. - If his ideas are relatively simple, why does the whole world keep fucking them up? Both the financial crisis and the BP oil spill can be examined from Taleb's framework. Why have governments not realized how fundamental these ideas are and 'robustified' society against 'shit happening'? (these are all rhetorical questions, I know the answers) Someone needs to keep driving them home till we all grok that robustness + redundancy > optimization in many areas. - Nobody in academia, government, or media took him seriously for a long time, even with a Wharton MBA and 99th percentile track record in trading. He said he had to get a PhD to help get his message across. That his ideas may now seem obvious is probably a 'hindsight is 20/20' thing. While I'm at it, I'll just throw in a link for the OP to his good Edge article - The Fourth Quadrant: A Map of the Limits of Statistics. http://www.edge.org/3rd_culture/taleb08/taleb08_index.html http://www.edge.org/3rd_culture/taleb08/taleb08_index.html PS - Do you really find his writing 'impenetrable'? I think it's perfectly clear. Or did you mean something else?
- tptacek 16y ago
  The world fucks up his simple ideas because the whole nature of his simple ideas is that the human brain is riddled with biases that cause it to misinterpret raw information. Essentially, his core idea is just that misunderstanding risk is human nature.