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Taleb would say it's time to short the whole SV tech market due to the wrong party being set up to be rewarded for economic disasters present and future. If yo

Taleb would say it's time to short the whole SV tech market due to the wrong party being set up to be rewarded for economic disasters present and future. If you really want to understand economics, his books are a must read. https://en.wikipedia.org/wiki/Nassim_Nicholas_Taleb https://en.wikipedia.org/wiki/Nassim_Nicholas_Taleb

nostrademons 4y ago
Depends how deeply Taleb understands his own theories. You build antifragile systems by creating networks where the failure of any one component is not just expected, but actively welcomed and designed for. Distributed systems engineers understand this intuitively; any highly reliable system is constantly failing internally, but the system is set up with multiple independent paths to success, such that failure just routes traffic to the non-failing components. Silicon Valley as a whole is also set up according to this principle. Startups are supposed to fail; big companies are supposed to fail; individual municipalities are supposed to fail. The genius of Silicon Valley is in rapid experimentation and routing all the raw materials for these entities into new configurations that are succeeding. When a giant like Sun Microsystems or Western Digital goes under, the engineers all quit and work for Google. When Google goes under, they'll work for whatever the hot company of 2030 is. Same goes for capital (the early investors in Google have long since cashed out and are actively looking for the next big thing, while the bagholders will be retail investors in the rest of the country who don't know any better) and geography (the center of Silicon Valley has historically moved around between roughly Scotts Valley to San Francisco on a 5-10 year timescale). And California laws & culture are setup to encourage this, with the ban on non-compete agreements, lax enforcement of trade secret laws, people always searching for the next big thing, customers willing to try the next big thing, lawyers/accountants/engineers willing to work for stock, etc.
- Dracophoenix 4y ago
  > lax enforcement of trade secret laws Then how did Anthony Levandowski end up in prison?
  - nostrademons 4y ago
    He didn't. He was sentenced to 18 months but never actually served; he was pardoned by Trump before then, and is currently serving as CEO of Pronto, a new autonomous vehicle startup. https://en.wikipedia.org/wiki/Anthony_Levandowski https://en.wikipedia.org/wiki/Anthony_Levandowski
    - Dracophoenix 4y ago
      Then I'll rephrase my statement: how did he end up convicted in a state with supposedly lax enforcement of trade secret laws?
      - nostrademons 4y ago
        You'll note that Alsup's comment at sentencing was "this is the biggest trade secret crime I have ever seen. This was not small. This was massive in scale." He downloaded 10G of confidential files from his employer onto a thumb drive and then founded a startup that was immediately acquired by one of his employer's biggest competitors, with evidence that the startup was only founded as a front for the theft of trade secrets. Those who are less brazen not only don't end up in court, but they often end up with $100B+ companies. You don't see any prison time for the Traitorous Eight who left Shockley to found Fairchild, Moore & Noyce who left Fairchild to found Intel, Jerry Sanders who left Fairchild to start AMD, Morris Chang leaving Texas Instruments to found TSMC, Marc Andreesen leaving Mosaic to start Netscape, or Steve Jobs's visit to Xerox Parc to see the Alto and bring all its innovations to the Lisa & Macintosh.
        sokoloff 4y ago
        If Xerox is demoing the Alto to thousands of people every year, it’s obvious that they’re not treating it as a trade secret.
      - danans 4y ago
        > how did he end up convicted in a state with supposedly lax enforcement of trade secret laws? Because he was convicted of a federal crime, not a state crime, which is also why Trump had the ability to pardon him.
- robertlagrant 4y ago
  > You build antifragile systems by creating networks where the failure of any one component is not just expected, but actively welcomed and designed for. Distributed systems engineers understand this intuitively; any highly reliable system is constantly failing internally, but the system is set up with multiple independent paths to success, such that failure just routes traffic to the non-failing components. Antifragility is benefitting from things breaking, not just coping with things breaking.
  - danans 4y ago
    > Antifragility is benefitting from things breaking, not just coping with things breaking. Coping with things breaking while fragile entities are collapsing is benefiting in the relative sense.
    - robertlagrant 4y ago
      It's not. You're not benefiting from the break. You might be unaffected, but you're not benefitting.
mellavora 4y ago
I find that while he makes good points, he also misrepresents the views and histories of the people he attacks. It is the standard "The common knowledge is wrong, trust me" tactic for establishing yourself as an expert on a topic. For example, he got famous for picking on Black-Scholes. Claiming among other things that he was smarter because he was a trader before he became an academic. Conveniently not mentioning that Black and Scholes also spent time trading the markets both before and after their famous 1973 publication.
- lmohseni 4y ago
  Indeed, Myron Scholes was on the board of LTCM when they blew up and kicked off the Asian financial crisis. LTCM could be a poster child for fragile financial systems.
- mhh__ 4y ago
  Taleb spends a significant amount of his time precisely dunking on Scholes's time at LTCM and others.
nindalf 4y ago
Taleb is certainly one of the writers of all time. But this blind worship of him is puzzling. His writing has so many obvious flaws. Here are just a few of them from just one book of his - Skin in the Game. He insults "interventionistas", meaning those who advocate military interventions in other countries. He calls them stupid, of being ignorant of reality. He doesn't need to actually examine the facts for and against foreign intervention. He doesn't need to look into past interventions that have been succeessful (WW I and II come to mind) and compare them to interventions that were disasters (Libya). Nah, all that isn't necessary. We've already dismissed these idiotic interventionistas with insults and have won the argument. He criticises the folks who regulated the financial industry before and after the 2008 crisis. No doubt you'd expect that he would analyse some of the salient features of the Dodd-Frank Act. He would point out how some of it's rules were flawed and how he would have improved it. You'd expect that he'd explain how he would shepherd this legislation through Congress while satisfying all stakeholders. No. He does none of those things. He dismisses all financial regulation by saying they "avoided considering skin in the game". That's it. This aren't even isolated incidents. He devotes large sections of the book to demonising/satirizing "Intellectual Yet Idiots" (IYIs). He spends an entire chapter constructing a strawman of an IYI. Then he brands people IYIs and leaves it at that, like it's a complete, standalone, irrefutable argument. I've never read any books by Steven Pinker, so I have no opinion on him. But seeing Taleb repeatedly fling mud in his direction without dissecting Pinker's opinions was a red flag for me. The way I see it, if you agree with Taleb, you're good. If you disagree, you're an idiot. Tough luck for IYIs like Richard Thaler, Thomas Piketty, "Hilary Monsanto-Malmaison" and countless others. All of his arguments are backed only by cherry-picked examples, if any at all. Taleb will claim that the best quanititative finance journal is so good because the person running it has their name on the cover. Apparently, this gives them SITG. But for me, data wins arguments. If he could point out even a vague correlation between explicit authorship and quality, that would be great. If he could address a notable example of a publication doing the opposite, hiding all authors' names like the Economist does that would also be great. But he doesn't. He simply states his opinion as gospel truth. Disagree? Cool, you're an IYI. Worst of all is the complete lack of evidence. He makes the extraordinary claim that "10 percent of Americans will spend at least a year in the top 1 percent, and more than half of all Americans will spent a year in the top 10 percent". You'd think he'd link to a source that proves this. He does not. He doesn't even clarify if he's talking about income or wealth. This isn't an oversight, it's deliberate. As he explains, "just a little bit of significant data is needed when one is right". Of course Taleb is right, so he absolves himself of the need to prove his claims. He simply needs to state them for them to be true. All of this could be forgiven if his central thesis was infallible. That applying the principle of skin-in-the-game will always yield the right results. But I can think of examples where it doesn't work. Take for example, the case of a hedge fund manager convincing you that a certain stock should be shorted. He has personally invested a lot of money to short that stock, so he has skin in the game. According to Taleb, this is the only factor that matters, so you should trust the hedge fund manager (famous last words). However, the case study of Fairfax Financial (https://teslamotorsclub.com/tmc/threads/elon-musk-vs-short-sellers.118431/ https://teslamotorsclub.com/tmc/threads/elon-musk-vs-short-s...) shows that it isn't enough for a person to display skin in the game, even if they're betting millions of dollars of their own money. My take would be - do your own research, focus on actual evidence, not on signals like SITG that are meaningless in cases like this one. But remember, I said this book has the appearance of a great book. Taleb manages it by making the reader feel intelligent and special. He subtly boosts the ego of the reader. Other folks are IYIs, but not you dear reader. You've shown great taste in picking up this masterwork, and you're getting smarter by the minute as you wallow in Taleb's wisdom. And people actually apply Taleb's tactics in the real world. I've seen "you don't have SITG" and "you're an IYI" being thrown around when it has no relevance or when applying it is illogical. I worry that the popularity of this book will lead to this style of argument becoming more popular. Forget talking about ideas. Simply attack people instead. Don't provide any sources. Simply claim something, and it will be true.

nostrademons 4y ago

Depends how deeply Taleb understands his own theories. You build antifragile systems by creating networks where the failure of any one component is not just expected, but actively welcomed and designed for. Distributed systems engineers understand this intuitively; any highly reliable system is constantly failing internally, but the system is set up with multiple independent paths to success, such that failure just routes traffic to the non-failing components. Silicon Valley as a whole is also set up according to this principle. Startups are supposed to fail; big companies are supposed to fail; individual municipalities are supposed to fail. The genius of Silicon Valley is in rapid experimentation and routing all the raw materials for these entities into new configurations that are succeeding. When a giant like Sun Microsystems or Western Digital goes under, the engineers all quit and work for Google. When Google goes under, they'll work for whatever the hot company of 2030 is. Same goes for capital (the early investors in Google have long since cashed out and are actively looking for the next big thing, while the bagholders will be retail investors in the rest of the country who don't know any better) and geography (the center of Silicon Valley has historically moved around between roughly Scotts Valley to San Francisco on a 5-10 year timescale). And California laws & culture are setup to encourage this, with the ban on non-compete agreements, lax enforcement of trade secret laws, people always searching for the next big thing, customers willing to try the next big thing, lawyers/accountants/engineers willing to work for stock, etc.

Dracophoenix 4y ago
> lax enforcement of trade secret laws Then how did Anthony Levandowski end up in prison?
- nostrademons 4y ago
  He didn't. He was sentenced to 18 months but never actually served; he was pardoned by Trump before then, and is currently serving as CEO of Pronto, a new autonomous vehicle startup. https://en.wikipedia.org/wiki/Anthony_Levandowski https://en.wikipedia.org/wiki/Anthony_Levandowski
  - Dracophoenix 4y ago
    Then I'll rephrase my statement: how did he end up convicted in a state with supposedly lax enforcement of trade secret laws?
    - nostrademons 4y ago
      You'll note that Alsup's comment at sentencing was "this is the biggest trade secret crime I have ever seen. This was not small. This was massive in scale." He downloaded 10G of confidential files from his employer onto a thumb drive and then founded a startup that was immediately acquired by one of his employer's biggest competitors, with evidence that the startup was only founded as a front for the theft of trade secrets. Those who are less brazen not only don't end up in court, but they often end up with $100B+ companies. You don't see any prison time for the Traitorous Eight who left Shockley to found Fairchild, Moore & Noyce who left Fairchild to found Intel, Jerry Sanders who left Fairchild to start AMD, Morris Chang leaving Texas Instruments to found TSMC, Marc Andreesen leaving Mosaic to start Netscape, or Steve Jobs's visit to Xerox Parc to see the Alto and bring all its innovations to the Lisa & Macintosh.
      - sokoloff 4y ago
        If Xerox is demoing the Alto to thousands of people every year, it’s obvious that they’re not treating it as a trade secret.
    - danans 4y ago
      > how did he end up convicted in a state with supposedly lax enforcement of trade secret laws? Because he was convicted of a federal crime, not a state crime, which is also why Trump had the ability to pardon him.
robertlagrant 4y ago
> You build antifragile systems by creating networks where the failure of any one component is not just expected, but actively welcomed and designed for. Distributed systems engineers understand this intuitively; any highly reliable system is constantly failing internally, but the system is set up with multiple independent paths to success, such that failure just routes traffic to the non-failing components. Antifragility is benefitting from things breaking, not just coping with things breaking.
- danans 4y ago
  > Antifragility is benefitting from things breaking, not just coping with things breaking. Coping with things breaking while fragile entities are collapsing is benefiting in the relative sense.
  - robertlagrant 4y ago
    It's not. You're not benefiting from the break. You might be unaffected, but you're not benefitting.

mellavora 4y ago

I find that while he makes good points, he also misrepresents the views and histories of the people he attacks. It is the standard "The common knowledge is wrong, trust me" tactic for establishing yourself as an expert on a topic. For example, he got famous for picking on Black-Scholes. Claiming among other things that he was smarter because he was a trader before he became an academic. Conveniently not mentioning that Black and Scholes also spent time trading the markets both before and after their famous 1973 publication.

lmohseni 4y ago
Indeed, Myron Scholes was on the board of LTCM when they blew up and kicked off the Asian financial crisis. LTCM could be a poster child for fragile financial systems.
mhh__ 4y ago
Taleb spends a significant amount of his time precisely dunking on Scholes's time at LTCM and others.

nindalf 4y ago

Taleb is certainly one of the writers of all time. But this blind worship of him is puzzling. His writing has so many obvious flaws. Here are just a few of them from just one book of his - Skin in the Game. He insults "interventionistas", meaning those who advocate military interventions in other countries. He calls them stupid, of being ignorant of reality. He doesn't need to actually examine the facts for and against foreign intervention. He doesn't need to look into past interventions that have been succeessful (WW I and II come to mind) and compare them to interventions that were disasters (Libya). Nah, all that isn't necessary. We've already dismissed these idiotic interventionistas with insults and have won the argument. He criticises the folks who regulated the financial industry before and after the 2008 crisis. No doubt you'd expect that he would analyse some of the salient features of the Dodd-Frank Act. He would point out how some of it's rules were flawed and how he would have improved it. You'd expect that he'd explain how he would shepherd this legislation through Congress while satisfying all stakeholders. No. He does none of those things. He dismisses all financial regulation by saying they "avoided considering skin in the game". That's it. This aren't even isolated incidents. He devotes large sections of the book to demonising/satirizing "Intellectual Yet Idiots" (IYIs). He spends an entire chapter constructing a strawman of an IYI. Then he brands people IYIs and leaves it at that, like it's a complete, standalone, irrefutable argument. I've never read any books by Steven Pinker, so I have no opinion on him. But seeing Taleb repeatedly fling mud in his direction without dissecting Pinker's opinions was a red flag for me. The way I see it, if you agree with Taleb, you're good. If you disagree, you're an idiot. Tough luck for IYIs like Richard Thaler, Thomas Piketty, "Hilary Monsanto-Malmaison" and countless others. All of his arguments are backed only by cherry-picked examples, if any at all. Taleb will claim that the best quanititative finance journal is so good because the person running it has their name on the cover. Apparently, this gives them SITG. But for me, data wins arguments. If he could point out even a vague correlation between explicit authorship and quality, that would be great. If he could address a notable example of a publication doing the opposite, hiding all authors' names like the Economist does that would also be great. But he doesn't. He simply states his opinion as gospel truth. Disagree? Cool, you're an IYI. Worst of all is the complete lack of evidence. He makes the extraordinary claim that "10 percent of Americans will spend at least a year in the top 1 percent, and more than half of all Americans will spent a year in the top 10 percent". You'd think he'd link to a source that proves this. He does not. He doesn't even clarify if he's talking about income or wealth. This isn't an oversight, it's deliberate. As he explains, "just a little bit of significant data is needed when one is right". Of course Taleb is right, so he absolves himself of the need to prove his claims. He simply needs to state them for them to be true. All of this could be forgiven if his central thesis was infallible. That applying the principle of skin-in-the-game will always yield the right results. But I can think of examples where it doesn't work. Take for example, the case of a hedge fund manager convincing you that a certain stock should be shorted. He has personally invested a lot of money to short that stock, so he has skin in the game. According to Taleb, this is the only factor that matters, so you should trust the hedge fund manager (famous last words). However, the case study of Fairfax Financial (https://teslamotorsclub.com/tmc/threads/elon-musk-vs-short-sellers.118431/ https://teslamotorsclub.com/tmc/threads/elon-musk-vs-short-s...) shows that it isn't enough for a person to display skin in the game, even if they're betting millions of dollars of their own money. My take would be - do your own research, focus on actual evidence, not on signals like SITG that are meaningless in cases like this one. But remember, I said this book has the appearance of a great book. Taleb manages it by making the reader feel intelligent and special. He subtly boosts the ego of the reader. Other folks are IYIs, but not you dear reader. You've shown great taste in picking up this masterwork, and you're getting smarter by the minute as you wallow in Taleb's wisdom. And people actually apply Taleb's tactics in the real world. I've seen "you don't have SITG" and "you're an IYI" being thrown around when it has no relevance or when applying it is illogical. I worry that the popularity of this book will lead to this style of argument becoming more popular. Forget talking about ideas. Simply attack people instead. Don't provide any sources. Simply claim something, and it will be true.