Nassim Taleb
Encyclopedia
Nassim Nicholas Taleb is a Lebanese
American
essayist whose work focuses on problems of randomness and probability. His 2007 book The Black Swan was described in a review by Sunday Times
as one of the twelve most influential books since World War II
.
He is a bestselling author, and has been a professor at several universities, currently at Polytechnic Institute of New York University and Oxford University. He is also a practitioner of mathematical finance
. Taleb has been a hedge fund
manager, a Wall Street
trader
, and is currently a scientific adviser at Universa Investments and the International Monetary Fund
.
He criticized the risk management methods used by the finance industry and warned about financial crises, subsequently making a fortune out of the late-2000s financial crisis
. He advocates what he calls a "black swan robust" society, meaning a society that can withstand difficult-to-predict events. He favors "stochastic tinkering" as a method of scientific discovery, by which he means experimentation and fact-collecting instead of top-down directed research.
, Lebanon, a son of Dr. Najib Taleb, an oncologist and researcher
in anthropology
, and his wife Minerva Ghosn. His parents were Greek Orthodox Lebanese with French citizenship, and he attended a French school there, the Grand Lycée Franco-Libanais
. His family saw its political prominence and wealth reduced by the Lebanese Civil War
, which began in 1975. During the war, Taleb studied for several years in the basement of his family's home.
Both sides of his family were politically prominent in the Lebanese Greek Orthodox community. On his mother's side, his grandfather, Fouad Nicolas Ghosn, and his great-grandfather, Nicolas Ghosn, were both deputy prime ministers. His paternal grandfather was a supreme court judge; his great-great-great-great grandfather, Ibrahim Taleb, was a governor of the Ottoman
semi-autonomous Mount Lebanon
Governorate in 1861. The Taleb family Palazo, built in 1860 by Florentine architects for his great-great-great-great grandfather, still stands in Amioun.
Taleb received his bachelor and master in science degrees from the University of Paris
. He holds an MBA from the Wharton School at the University of Pennsylvania
and a PhD
in Management Science (his thesis was on the mathematics of derivatives pricing) from the University of Paris (Dauphine) under the direction of Hélyette Geman.
A polyglot
, Taleb has a literary fluency in English
, French
, and classical Arabic
; a conversational fluency in Italian
and Spanish
; and can read classical texts in Greek
, Latin
, Aramaic, and ancient Hebrew, as well as the Canaanite
script.
, and says that he used trading to attain independence and freedom from authority. As a trader, his strategy has been to safeguard investors against crises while reaping rewards from rare events, and thus his trading career has included several jackpots followed by lengthy dry spells. Taleb was a pioneer of tail risk hedging
(now sometimes called "black swan protection"), whereby investors are insured against extreme market moves. He says that reaping dividends the way he has means dwelling in the land of "Mediocristan" instead of "Extremistan", the latter being an environment where huge things (black swans) can happen to you, whereas Mediocristan is the land of dentists who earn an above average income but with less extreme variations.
He has held the following positions: managing director and proprietary trader at UBS
; worldwide chief proprietary arbitrage derivatives trader
for currencies
, commodities and non-dollar fixed income at CS First Boston; chief currency derivatives trader for Banque Indosuez; managing director and worldwide head of financial option
arbitrage
at CIBC Wood Gundy
; derivatives arbitrage trader at Bankers Trust
, proprietary trader at BNP Paribas
, as well as independent option market maker on the Chicago Mercantile Exchange
; and founder of Empirica Capital, after which Taleb retired from trading and became a full-time author and scholar in 2004. Taleb is currently Principal/Senior Scientific Adviser at Universa Investments in Santa Monica, California, a tail protection firm owned and managed by former Empirica partner Mark Spitznagel
.
Taleb reportedly became financially independent after the crash of 1987and made a multi-million dollar fortune during the financial crisis that began in 2007, a development which he attributed to the mismatch between statistical distributions used in finance and reality. Universa is a fund which is based on the "black swan" idea and to which Taleb is a principal adviser. Separate funds belonging to Universa made returns of 65% to 115% in October 2008. In the wake of the economic crisis that started in 2008, Taleb has become an activist for a "black swan robust society" and as of July 2011, Taleb is working with the International Monetary Fund
on identifying and mitigating tail risk
s in financial markets.
of the Ecole Normale Superieure
in Paris and Distinguished Research Scholar, Said Business School
, Oxford University. He was Visiting Professor at London Business School
and the Dean's Professor in the Sciences of Uncertainty at the Isenberg School of Management at the University of Massachusetts Amherst
, Adjunct Professor of Mathematics at the Courant Institute of New York University
, and affiliated faculty member at the Wharton Business School Financial Institutions Center. He jointly teaches regular courses with Paul Wilmott
and occasionally on the Certificate in Quantitative Finance. In 2008–2009, he ranked fifth in terms of the number of downloaded papers on the Social Science Research Network
(SSRN).
, about the underestimation of the role of randomness in life, was published in 2001.
His second non-technical book, The Black Swan, about unpredictable events, was published in 2007. It sold, as of February 2011, close to 3 million copies and spent 17 weeks on the New York Times Bestseller list and was translated into 31 languages. The Black Swan has been credited with predicting the banking and economic crisis of 2008.
Taleb's non-technical writing style mixes a narrative style (often semi-autobiographical) and short philosophical tales together with historical and scientific commentary. The sales of Taleb's first two books garnered an advance of $4 million for a follow-up book on anti-fragility.
A book of aphorisms, The Bed of Procrustes: Philosophical and Practical Aphorisms, was released in December 2010.
In 2007, in The Black Swan, Taleb warned about the coming crisis:
Among the people Taleb's writing has influenced is writer Malcolm Gladwell
of The New Yorker
. Gladwell wrote, "We associate the willingness to risk great failure—and the ability to climb back from catastrophe—with courage. But in this we are wrong. That is the lesson of Nassim Taleb."
summarizes the central problem: "we humans, facing limits of knowledge, and things we do not observe, the unseen and the unknown, resolve the tension by squeezing life and the world into crisp commoditized ideas". Taleb disagrees with Platonic
(i.e., theoretical) approaches to reality to the extent that they lead people to have the wrong map of reality rather than no map at all. He opposes most economic and grand social science theorizing, which in his view suffer acutely from the problem of overuse of Plato's Theory of Forms.
Relatedly, he also believes that universities are better at public relations and claiming credit than generating knowledge. He argues that knowledge and technology are usually generated by what he calls "stochastic tinkering" rather than by top-down directed research.
He calls for cancellation of the Nobel Memorial Prize in Economics, saying that the damage from economic theories can be devastating. He opposes top-down knowledge as an academic illusion and believes that price formation obeys an organic
process. Together with Espen Gaarder Haug, Taleb asserts that option pricing is determined in a "heuristic way" by operators, not by a model, and that models are "lecturing birds on how to fly". Pablo Triana has explored this topic with reference to Haug and Taleb, and says that perhaps Taleb is correct to urge that banks be treated as utilities
forbidden to take potentially lethal risks, while hedge funds and other unregulated entities should be able to do what they want.
Taleb's writings discuss the error of comparing real-world randomness with the "structured randomness" in quantum physics where probabilities are remarkably computable and games of chance like casinos where probabilities are artificially built. Taleb calls this the "Ludic fallacy
". His argument centers on the idea that predictive models are based on Plato's Theory of Forms, gravitating towards mathematical purity and failing to take some key ideas into account, such as: the impossibility of possessing all relevant information, that small unknown variations in the data can have a huge impact, and flawed theories/models that are based on empirical data and that fail to consider events that have not taken place but could have taken place. Discussing the Ludic fallacy in The Black Swan, he writes, "The dark side of the moon is harder to see; beaming light on it costs energy. In the same way, beaming light on the unseen is costly in both computational and mental effort."
In the second edition of The Black Swan, he posited that the foundations of quantitative economics
are faulty and highly self-referential. He states that statistics is fundamentally incomplete as a field as it cannot predict the risk of rare events, a problem that is acute in proportion to the rarity of these events. With the mathematician Raphael Douady, he called the problem statistical undecidability (Douady and Taleb, 2010).
Taleb sees his main challenge as mapping his ideas of "robustification" and "anti-fragility", that is, how to live and act in a world we do not understand and build robustness to black swan events. Taleb introduced the idea of the "fourth quadrant". One of its applications is in his definition of the most effective (that is, least fragile) risk management approach: what he calls the 'barbell' strategy which is based on avoiding the middle in favor of linear combination of extremes, across all domains from politics to economics to one's personal life. These are deemed more robust to estimation errors. For instance, he suggests that investing money in 'medium risk' investments is pointless because risk is difficult if not impossible to compute. His preferred strategy is to be both hyper-conservative and hyper-aggressive at the same time. For example, an investor might put 80 to 90% of their money in extremely safe instruments, such as treasury bills, with the remainder going into highly risky and diversified speculative bets. An alternative suggestion is to engage in highly speculative bets that are insured against losses of more than a specified amount. He asserts that by adopting these strategies a portfolio can be "robust", that is, gain a positive exposure to black swan events while limiting losses suffered by such random events. Taleb also applies a similar barbell-style approach to health and exercise. Instead of doing steady and moderate exercise daily, he suggests that it is better to do a low-effort exercise such as walking slowly most of the time, while occasionally expending extreme effort. He avers that the human body evolved to live in a random environment, with various unexpected but intense efforts and much rest.
described Taleb as "now the hottest thinker in the world". The Nobel
Laureate Daniel Kahneman
proposed the inclusion of Taleb's name among the world's top intellectuals, saying "Taleb has changed the way many people think about uncertainty, particularly in the financial markets. His book, The Black Swan, is an original and audacious analysis of the ways in which humans try to make sense of unexpected events." Taleb was treated as a "rock star" at the World Economic Forum
annual meeting in Davos
in 2009; at that event he had harsh words for bankers.
Taleb contends that statisticians can be pseudoscientists when it comes to risks of rare events and risks of blowups, and mask their incompetence with complicated equations. This stance has attracted criticism: the American Statistical Association
devoted the August 2007 issue of The American Statistician to The Black Swan. The magazine offered a mixture of praise and criticism for Taleb's main points, with a focus on Taleb's writing style and his representation of the statistical literature. Robert Lund, a mathematics professor at Clemson University
, writes that in Black Swan, Taleb is "reckless at times and subject to grandiose overstatements; the professional statistician will find the book ubiquitously naive."
Aaron Brown
, a finance professor at Yeshiva University
, said that "the book reads as if Taleb has never heard of nonparametric methods
, data analysis
, visualization tools or robust estimation
." Nonetheless, he calls the book "essential reading" and urges statisticians to overlook the insults to get the "important philosophic and mathematical truths." Taleb replied in the second edition of The Black Swan that "One of the most common (but useless) comments I hear is that some solutions can come from 'robust statistics.' I wonder how using these techniques can create information where there is none". While praising the book, Westfall and Hilbe in 2007 complained that Taleb's criticism is "often unfounded and sometimes outrageous." Taleb's contentious style, they say, "describes writers and professionals as knaves or fools, mostly fools. His writing is full of irrelevances, asides and colloquialisms, reading like the conversation of a raconteur rather than a tightly argued thesis." Taleb felt the academics showed "bad faith" by criticizing a literary book that claimed to be a literary book and by ignoring the empirical evidence provided in his appendix and more technical works.
The late Berkeley statistician David Freedman said that efforts by statisticians to refute Taleb's stance have been unconvincing. Taleb wrote in the second edition of The Black Swan that he had a session in 2008 with statisticians in which the hostility changed:
Taleb and Nobel laureate Myron Scholes
have traded personal attacks, particularly after Taleb's paper with Espen Haug on why nobody used the Black-Scholes-Merton formula. Taleb said that Scholes was responsible for the financial crises of 2008, and suggested that "this guy should be in a retirement home doing Sudoku. His funds have blown up twice. He shouldn't be allowed in Washington to lecture anyone on risk." Scholes retorted that Taleb simply "popularises ideas and is making money selling books". Scholes claimed that Taleb does not cite previous literature, and for this reason Taleb is not taken seriously in academia. Taleb and Haug (2010) listed hundreds of research documents showing the Black-Scholes formula was not Scholes' at all and argued that the economics establishment ignored the literature by practitioners and mathematicians (such as Ed Thorp), who had developed a more sophisticated version of the formula.
Citing his academic works on the same topics covered in The Black Swan, Taleb said that "Academics should comment on data there, not make technical comments on a literary book". He has said that no direct published criticism has been directed at his ideas, but rather at his person and style. He wrote, "you never win an argument until they attack your person." In an interview on Charlie Rose
, Taleb said that he was pleased that none of the criticism he received for The Black Swan had any substance, as it was either unintelligent, ad hominem
, or style over substance, which convinced him to "go for the jugular" with a huge financial bet on the breakdown of statistical methods in finance.
Taleb's aggressive attitude against the finance industry has led to personal attacks, including a smear campaign and death threats from former employees of Lehman Brothers
.
, in What the Dog Saw
, wrote: "We would have lunches that would last for hours. The delight I took in his company was offset only by the dread I felt at the prospect of transcribing all those hours of tapes."
Interviews
Review
Lebanon
Lebanon , officially the Republic of LebanonRepublic of Lebanon is the most common term used by Lebanese government agencies. The term Lebanese Republic, a literal translation of the official Arabic and French names that is not used in today's world. Arabic is the most common language spoken among...
American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
essayist whose work focuses on problems of randomness and probability. His 2007 book The Black Swan was described in a review by Sunday Times
The Sunday Times
The Sunday Times is a British Sunday newspaper.The Sunday Times may also refer to:*The Sunday Times *The Sunday Times *The Sunday Times *The Sunday Times...
as one of the twelve most influential books since World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
.
He is a bestselling author, and has been a professor at several universities, currently at Polytechnic Institute of New York University and Oxford University. He is also a practitioner of mathematical finance
Mathematical finance
Mathematical finance is a field of applied mathematics, concerned with financial markets. The subject has a close relationship with the discipline of financial economics, which is concerned with much of the underlying theory. Generally, mathematical finance will derive and extend the mathematical...
. Taleb has been a hedge fund
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
manager, a Wall Street
Wall Street
Wall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...
trader
Trader (finance)
A trader is someone in finance who buys and sells financial instruments such as stocks, bonds, commodities and derivatives. A broker who simply fills buy or sell orders is not a trader, as they are merely executing instructions given to them. According to the Wall Street Journal in 2004, a managing...
, and is currently a scientific adviser at Universa Investments and the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
.
He criticized the risk management methods used by the finance industry and warned about financial crises, subsequently making a fortune out of the late-2000s financial crisis
Late-2000s financial crisis
The late-2000s financial crisis is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s...
. He advocates what he calls a "black swan robust" society, meaning a society that can withstand difficult-to-predict events. He favors "stochastic tinkering" as a method of scientific discovery, by which he means experimentation and fact-collecting instead of top-down directed research.
Family background and education
Taleb was born in AmiounAmioun
Amioun in and other scripts of the name, are most probably transliterated from the original Amyūn. It is the capital town of the predominantly Greek Orthodox area Koura District in the North of Lebanon.-Name:...
, Lebanon, a son of Dr. Najib Taleb, an oncologist and researcher
Researcher
A researcher is somebody who performs research, the search for knowledge or in general any systematic investigation to establish facts. Researchers can work in academic, industrial, government, or private institutions.-Examples of research institutions:...
in anthropology
Anthropology
Anthropology is the study of humanity. It has origins in the humanities, the natural sciences, and the social sciences. The term "anthropology" is from the Greek anthrōpos , "man", understood to mean mankind or humanity, and -logia , "discourse" or "study", and was first used in 1501 by German...
, and his wife Minerva Ghosn. His parents were Greek Orthodox Lebanese with French citizenship, and he attended a French school there, the Grand Lycée Franco-Libanais
Grand Lycée Franco-Libanais
The Grand Lycée Franco-Libanais , is a French lycée in the Achrafieh district of Beirut, Lebanon founded in 1909 by the Mission laïque française, an organization which also helped found other lycées worldwide.It is also an active member of the AEFE...
. His family saw its political prominence and wealth reduced by the Lebanese Civil War
Lebanese Civil War
The Lebanese Civil War was a multifaceted civil war in Lebanon. The war lasted from 1975 to 1990 and resulted in an estimated 150,000 to 230,000 civilian fatalities. Another one million people were wounded, and today approximately 350,000 people remain displaced. There was also a mass exodus of...
, which began in 1975. During the war, Taleb studied for several years in the basement of his family's home.
Both sides of his family were politically prominent in the Lebanese Greek Orthodox community. On his mother's side, his grandfather, Fouad Nicolas Ghosn, and his great-grandfather, Nicolas Ghosn, were both deputy prime ministers. His paternal grandfather was a supreme court judge; his great-great-great-great grandfather, Ibrahim Taleb, was a governor of the Ottoman
Ottoman Empire
The Ottoman EmpireIt was usually referred to as the "Ottoman Empire", the "Turkish Empire", the "Ottoman Caliphate" or more commonly "Turkey" by its contemporaries...
semi-autonomous Mount Lebanon
Mount Lebanon
Mount Lebanon , as a geographic designation, is a Lebanese mountain range, averaging above 2,200 meters in height and receiving a substantial amount of precipitation, including snow, which averages around four meters deep. It extends across the whole country along about , parallel to the...
Governorate in 1861. The Taleb family Palazo, built in 1860 by Florentine architects for his great-great-great-great grandfather, still stands in Amioun.
Taleb received his bachelor and master in science degrees from the University of Paris
University of Paris
The University of Paris was a university located in Paris, France and one of the earliest to be established in Europe. It was founded in the mid 12th century, and officially recognized as a university probably between 1160 and 1250...
. He holds an MBA from the Wharton School at the University of Pennsylvania
University of Pennsylvania
The University of Pennsylvania is a private, Ivy League university located in Philadelphia, Pennsylvania, United States. Penn is the fourth-oldest institution of higher education in the United States,Penn is the fourth-oldest using the founding dates claimed by each institution...
and a PhD
PHD
PHD may refer to:*Ph.D., a doctorate of philosophy*Ph.D. , a 1980s British group*PHD finger, a protein sequence*PHD Mountain Software, an outdoor clothing and equipment company*PhD Docbook renderer, an XML renderer...
in Management Science (his thesis was on the mathematics of derivatives pricing) from the University of Paris (Dauphine) under the direction of Hélyette Geman.
A polyglot
Multilingualism
Multilingualism is the act of using, or promoting the use of, multiple languages, either by an individual speaker or by a community of speakers. Multilingual speakers outnumber monolingual speakers in the world's population. Multilingualism is becoming a social phenomenon governed by the needs of...
, Taleb has a literary fluency in English
English language
English is a West Germanic language that arose in the Anglo-Saxon kingdoms of England and spread into what was to become south-east Scotland under the influence of the Anglian medieval kingdom of Northumbria...
, French
French language
French is a Romance language spoken as a first language in France, the Romandy region in Switzerland, Wallonia and Brussels in Belgium, Monaco, the regions of Quebec and Acadia in Canada, and by various communities elsewhere. Second-language speakers of French are distributed throughout many parts...
, and classical Arabic
Arabic language
Arabic is a name applied to the descendants of the Classical Arabic language of the 6th century AD, used most prominently in the Quran, the Islamic Holy Book...
; a conversational fluency in Italian
Italian language
Italian is a Romance language spoken mainly in Europe: Italy, Switzerland, San Marino, Vatican City, by minorities in Malta, Monaco, Croatia, Slovenia, France, Libya, Eritrea, and Somalia, and by immigrant communities in the Americas and Australia...
and Spanish
Spanish language
Spanish , also known as Castilian , is a Romance language in the Ibero-Romance group that evolved from several languages and dialects in central-northern Iberia around the 9th century and gradually spread with the expansion of the Kingdom of Castile into central and southern Iberia during the...
; and can read classical texts in Greek
Greek language
Greek is an independent branch of the Indo-European family of languages. Native to the southern Balkans, it has the longest documented history of any Indo-European language, spanning 34 centuries of written records. Its writing system has been the Greek alphabet for the majority of its history;...
, Latin
Latin
Latin is an Italic language originally spoken in Latium and Ancient Rome. It, along with most European languages, is a descendant of the ancient Proto-Indo-European language. Although it is considered a dead language, a number of scholars and members of the Christian clergy speak it fluently, and...
, Aramaic, and ancient Hebrew, as well as the Canaanite
Canaanite languages
The Canaanite languages are a subfamily of the Semitic languages, which were spoken by the ancient peoples of the Canaan region, including Canaanites, Israelites and Phoenicians...
script.
Finance career
Taleb considers himself less a businessman than an epistemologist of randomnessRandomness
Randomness has somewhat differing meanings as used in various fields. It also has common meanings which are connected to the notion of predictability of events....
, and says that he used trading to attain independence and freedom from authority. As a trader, his strategy has been to safeguard investors against crises while reaping rewards from rare events, and thus his trading career has included several jackpots followed by lengthy dry spells. Taleb was a pioneer of tail risk hedging
Black swan theory
The black swan theory or theory of black swan events is a metaphor that encapsulates the concept that The event is a surprise and has a major impact...
(now sometimes called "black swan protection"), whereby investors are insured against extreme market moves. He says that reaping dividends the way he has means dwelling in the land of "Mediocristan" instead of "Extremistan", the latter being an environment where huge things (black swans) can happen to you, whereas Mediocristan is the land of dentists who earn an above average income but with less extreme variations.
He has held the following positions: managing director and proprietary trader at UBS
UBS AG
UBS AG is a Swiss global financial services company headquartered in Basel and Zürich, Switzerland, which provides investment banking, asset management, and wealth management services for private, corporate, and institutional clients worldwide, as well as retail clients in Switzerland...
; worldwide chief proprietary arbitrage derivatives trader
Trader (finance)
A trader is someone in finance who buys and sells financial instruments such as stocks, bonds, commodities and derivatives. A broker who simply fills buy or sell orders is not a trader, as they are merely executing instructions given to them. According to the Wall Street Journal in 2004, a managing...
for currencies
Foreign exchange market
The foreign exchange market is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends...
, commodities and non-dollar fixed income at CS First Boston; chief currency derivatives trader for Banque Indosuez; managing director and worldwide head of financial option
Option (finance)
In finance, an option is a derivative financial instrument that specifies a contract between two parties for a future transaction on an asset at a reference price. The buyer of the option gains the right, but not the obligation, to engage in that transaction, while the seller incurs the...
arbitrage
Arbitrage
In economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices...
at CIBC Wood Gundy
CIBC Wood Gundy
CIBC Wood Gundy is the is the Canadian retail brokerage division of CIBC World Markets, a division of the Canadian Imperial Bank of Commerce.CIBC Wood Gundy maintains a network of 1,400 brokers working in over 100 branches across Canada...
; derivatives arbitrage trader at Bankers Trust
Bankers Trust
Bankers Trust was an historic American banking organization. The bank merged with Alex. Brown & Sons before being acquired by Deutsche Bank in 1998.-History:A consortium of banks created Bankers Trust to perform trust company services for their clients....
, proprietary trader at BNP Paribas
BNP Paribas
BNP Paribas S.A. is a global banking group, headquartered in Paris, with its second global headquarters in London. In October 2010 BNP Paribas was ranked by Bloomberg and Forbes as the largest bank and largest company in the world by assets with over $3.1 trillion. It was formed through the merger...
, as well as independent option market maker on the Chicago Mercantile Exchange
Chicago Mercantile Exchange
The Chicago Mercantile Exchange is an American financial and commodity derivative exchange based in Chicago. The CME was founded in 1898 as the Chicago Butter and Egg Board. Originally, the exchange was a non-profit organization...
; and founder of Empirica Capital, after which Taleb retired from trading and became a full-time author and scholar in 2004. Taleb is currently Principal/Senior Scientific Adviser at Universa Investments in Santa Monica, California, a tail protection firm owned and managed by former Empirica partner Mark Spitznagel
Mark Spitznagel
Mark Spitznagel is an American hedge fund manager, derivatives trader, and value investor.Spitznagel is known for a hugely profitable billion dollar derivatives bet on the stock market crash of 2008, for allegedly crashing the market again in May 2010, as well as for his highly unconventional...
.
Taleb reportedly became financially independent after the crash of 1987and made a multi-million dollar fortune during the financial crisis that began in 2007, a development which he attributed to the mismatch between statistical distributions used in finance and reality. Universa is a fund which is based on the "black swan" idea and to which Taleb is a principal adviser. Separate funds belonging to Universa made returns of 65% to 115% in October 2008. In the wake of the economic crisis that started in 2008, Taleb has become an activist for a "black swan robust society" and as of July 2011, Taleb is working with the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
on identifying and mitigating tail risk
Tail risk
Tail risk is the risk of an asset or portfolio of assets moving more than 3 standard deviations from its current price in a probability density function...
s in financial markets.
Academic career
Taleb became a full time researcher in 2004, as a university professor. He is currently Distinguished Professor of Risk Engineering at Polytechnic Institute of New York University, Associate Member at the Institut Jean NicodInstitut Jean Nicod
The Institut Jean Nicod is a CNRS research center based in Paris, France. Founded in 2000, its name commemorates the French philosopher and logician Jean Nicod...
of the Ecole Normale Superieure
École Normale Supérieure
The École normale supérieure is one of the most prestigious French grandes écoles...
in Paris and Distinguished Research Scholar, Said Business School
Saïd Business School
Saïd Business School is the business school of the University of Oxford in England, located on the north side of Frideswide Square on the former site of Oxford Rewley Road railway station. It is the University's centre of learning for graduate and undergraduate students in business, management...
, Oxford University. He was Visiting Professor at London Business School
London Business School
London Business School is an international business school and a constituent college of the federal University of London, located in central London, beside Regent's Park...
and the Dean's Professor in the Sciences of Uncertainty at the Isenberg School of Management at the University of Massachusetts Amherst
University of Massachusetts Amherst
The University of Massachusetts Amherst is a public research and land-grant university in Amherst, Massachusetts, United States and the flagship of the University of Massachusetts system...
, Adjunct Professor of Mathematics at the Courant Institute of New York University
New York University
New York University is a private, nonsectarian research university based in New York City. NYU's main campus is situated in the Greenwich Village section of Manhattan...
, and affiliated faculty member at the Wharton Business School Financial Institutions Center. He jointly teaches regular courses with Paul Wilmott
Paul Wilmott
Paul Wilmott is a researcher, consultant and lecturer in quantitative finance. He is best known as the author of various academic and practitioner texts on risk and derivatives, and for Wilmott magazine and Wilmott.com , a quantitative finance portal....
and occasionally on the Certificate in Quantitative Finance. In 2008–2009, he ranked fifth in terms of the number of downloaded papers on the Social Science Research Network
Social Science Research Network
The Social Science Research Network is a website devoted to the rapid dissemination of scholarly research in the social sciences and humanities. SSRN is viewed as particularly strong in the fields of economics, finance, accounting, management, and law. SSRN was founded in 1994 by Michael Jensen ...
(SSRN).
Writing career
Taleb's first non-technical book, Fooled by RandomnessFooled by Randomness
Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets is a book written by Nassim Nicholas Taleb about the fallibility of human knowledge.-Reaction:The book was selected by Fortune as one of the 75 "Smartest Books of All Time."...
, about the underestimation of the role of randomness in life, was published in 2001.
His second non-technical book, The Black Swan, about unpredictable events, was published in 2007. It sold, as of February 2011, close to 3 million copies and spent 17 weeks on the New York Times Bestseller list and was translated into 31 languages. The Black Swan has been credited with predicting the banking and economic crisis of 2008.
Taleb's non-technical writing style mixes a narrative style (often semi-autobiographical) and short philosophical tales together with historical and scientific commentary. The sales of Taleb's first two books garnered an advance of $4 million for a follow-up book on anti-fragility.
A book of aphorisms, The Bed of Procrustes: Philosophical and Practical Aphorisms, was released in December 2010.
In 2007, in The Black Swan, Taleb warned about the coming crisis:
Globalization creates interlocking fragility, while reducing volatility and giving the appearance of stability. In other words it creates devastating Black Swans. We have never lived before under the threat of a global collapse. Financial Institutions have been merging into a smaller number of very large banks. Almost all banks are interrelated. So the financial ecology is swelling into gigantic, incestuous, bureaucratic banks – when one fails, they all fall. The increased concentration among banks seems to have the effect of making financial crisis less likely, but when they happen they are more global in scale and hit us very hard. We have moved from a diversified ecology of small banks, with varied lending policies, to a more homogeneous framework of firms that all resemble one another. True, we now have fewer failures, but when they occur .... I shiver at the thought. The government-sponsored institution Fannie Mae, when I look at its risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup. But not to worry: their large staff of scientists deem these events "unlikely".
Among the people Taleb's writing has influenced is writer Malcolm Gladwell
Malcolm Gladwell
Malcolm Gladwell, CM is a Canadian journalist, bestselling author, and speaker. He is currently based in New York City and has been a staff writer for The New Yorker since 1996...
of The New Yorker
The New Yorker
The New Yorker is an American magazine of reportage, commentary, criticism, essays, fiction, satire, cartoons and poetry published by Condé Nast...
. Gladwell wrote, "We associate the willingness to risk great failure—and the ability to climb back from catastrophe—with courage. But in this we are wrong. That is the lesson of Nassim Taleb."
Philosophical theories
His book The Bed of ProcrustesThe Bed of Procrustes: Philosophical and Practical Aphorisms
The Bed of Procrustes: Philosophical and Practical Aphorisms is a philosophy book by Nassim Nicholas Taleb. According to Taleb, the book "contrasts the classical values of courage, elegance, and erudition against the modern diseases of nerdiness, philistinism, and phoniness."-External links:***...
summarizes the central problem: "we humans, facing limits of knowledge, and things we do not observe, the unseen and the unknown, resolve the tension by squeezing life and the world into crisp commoditized ideas". Taleb disagrees with Platonic
Plato
Plato , was a Classical Greek philosopher, mathematician, student of Socrates, writer of philosophical dialogues, and founder of the Academy in Athens, the first institution of higher learning in the Western world. Along with his mentor, Socrates, and his student, Aristotle, Plato helped to lay the...
(i.e., theoretical) approaches to reality to the extent that they lead people to have the wrong map of reality rather than no map at all. He opposes most economic and grand social science theorizing, which in his view suffer acutely from the problem of overuse of Plato's Theory of Forms.
Relatedly, he also believes that universities are better at public relations and claiming credit than generating knowledge. He argues that knowledge and technology are usually generated by what he calls "stochastic tinkering" rather than by top-down directed research.
He calls for cancellation of the Nobel Memorial Prize in Economics, saying that the damage from economic theories can be devastating. He opposes top-down knowledge as an academic illusion and believes that price formation obeys an organic
Organic (model)
Organic describes forms, methods and patterns found in living systems such as the organisation of cells, to populations, communities, and ecosystems.Typically organic models stress the interdependence of the component parts, as well as their differentiation...
process. Together with Espen Gaarder Haug, Taleb asserts that option pricing is determined in a "heuristic way" by operators, not by a model, and that models are "lecturing birds on how to fly". Pablo Triana has explored this topic with reference to Haug and Taleb, and says that perhaps Taleb is correct to urge that banks be treated as utilities
Public utility
A public utility is an organization that maintains the infrastructure for a public service . Public utilities are subject to forms of public control and regulation ranging from local community-based groups to state-wide government monopolies...
forbidden to take potentially lethal risks, while hedge funds and other unregulated entities should be able to do what they want.
Taleb's writings discuss the error of comparing real-world randomness with the "structured randomness" in quantum physics where probabilities are remarkably computable and games of chance like casinos where probabilities are artificially built. Taleb calls this the "Ludic fallacy
Ludic fallacy
The ludic fallacy is a term coined by Nassim Nicholas Taleb in his 2007 book The Black Swan. "Ludic" is from the Latin ludus, meaning "play, game, sport, pastime." It is summarized as "the misuse of games to model real-life situations." Taleb explains the fallacy as "basing studies of chance on the...
". His argument centers on the idea that predictive models are based on Plato's Theory of Forms, gravitating towards mathematical purity and failing to take some key ideas into account, such as: the impossibility of possessing all relevant information, that small unknown variations in the data can have a huge impact, and flawed theories/models that are based on empirical data and that fail to consider events that have not taken place but could have taken place. Discussing the Ludic fallacy in The Black Swan, he writes, "The dark side of the moon is harder to see; beaming light on it costs energy. In the same way, beaming light on the unseen is costly in both computational and mental effort."
In the second edition of The Black Swan, he posited that the foundations of quantitative economics
Quantitative analyst
A quantitative analyst is a person who works in finance using numerical or quantitative techniques. Similar work is done in most other modern industries, but the work is not always called quantitative analysis...
are faulty and highly self-referential. He states that statistics is fundamentally incomplete as a field as it cannot predict the risk of rare events, a problem that is acute in proportion to the rarity of these events. With the mathematician Raphael Douady, he called the problem statistical undecidability (Douady and Taleb, 2010).
Taleb sees his main challenge as mapping his ideas of "robustification" and "anti-fragility", that is, how to live and act in a world we do not understand and build robustness to black swan events. Taleb introduced the idea of the "fourth quadrant". One of its applications is in his definition of the most effective (that is, least fragile) risk management approach: what he calls the 'barbell' strategy which is based on avoiding the middle in favor of linear combination of extremes, across all domains from politics to economics to one's personal life. These are deemed more robust to estimation errors. For instance, he suggests that investing money in 'medium risk' investments is pointless because risk is difficult if not impossible to compute. His preferred strategy is to be both hyper-conservative and hyper-aggressive at the same time. For example, an investor might put 80 to 90% of their money in extremely safe instruments, such as treasury bills, with the remainder going into highly risky and diversified speculative bets. An alternative suggestion is to engage in highly speculative bets that are insured against losses of more than a specified amount. He asserts that by adopting these strategies a portfolio can be "robust", that is, gain a positive exposure to black swan events while limiting losses suffered by such random events. Taleb also applies a similar barbell-style approach to health and exercise. Instead of doing steady and moderate exercise daily, he suggests that it is better to do a low-effort exercise such as walking slowly most of the time, while occasionally expending extreme effort. He avers that the human body evolved to live in a random environment, with various unexpected but intense efforts and much rest.
Praise and criticism
In a 2008 article in The Times, the journalist Bryan AppleyardBryan Appleyard
Bryan Appleyard is a British journalist and author.- Career :Appleyard was educated at Bolton School and King’s College, Cambridge and after graduating with a degree in English, he became Financial News Editor and Deputy Arts Editor from 1976 to 1984 at The Times. Subsequently he became a...
described Taleb as "now the hottest thinker in the world". The Nobel
Nobel Prize
The Nobel Prizes are annual international awards bestowed by Scandinavian committees in recognition of cultural and scientific advances. The will of the Swedish chemist Alfred Nobel, the inventor of dynamite, established the prizes in 1895...
Laureate Daniel Kahneman
Daniel Kahneman
Daniel Kahneman is an Israeli-American psychologist and Nobel laureate. He is notable for his work on the psychology of judgment and decision-making, behavioral economics and hedonic psychology....
proposed the inclusion of Taleb's name among the world's top intellectuals, saying "Taleb has changed the way many people think about uncertainty, particularly in the financial markets. His book, The Black Swan, is an original and audacious analysis of the ways in which humans try to make sense of unexpected events." Taleb was treated as a "rock star" at the World Economic Forum
World Economic Forum
The World Economic Forum is a Swiss non-profit foundation, based in Cologny, Geneva, best known for its annual meeting in Davos, a mountain resort in Graubünden, in the eastern Alps region of Switzerland....
annual meeting in Davos
Davos
Davos is a municipality in the district of Prättigau/Davos in the canton of Graubünden, Switzerland. It has a permanent population of 11,248 . Davos is located on the Landwasser River, in the Swiss Alps, between the Plessur and Albula Range...
in 2009; at that event he had harsh words for bankers.
Taleb contends that statisticians can be pseudoscientists when it comes to risks of rare events and risks of blowups, and mask their incompetence with complicated equations. This stance has attracted criticism: the American Statistical Association
American Statistical Association
The American Statistical Association , is the main professional US organization for statisticians and related professions. It was founded in Boston, Massachusetts on November 27, 1839, and is the second oldest, continuously operating professional society in the United States...
devoted the August 2007 issue of The American Statistician to The Black Swan. The magazine offered a mixture of praise and criticism for Taleb's main points, with a focus on Taleb's writing style and his representation of the statistical literature. Robert Lund, a mathematics professor at Clemson University
Clemson University
Clemson University is an American public, coeducational, land-grant, sea-grant, research university located in Clemson, South Carolina, United States....
, writes that in Black Swan, Taleb is "reckless at times and subject to grandiose overstatements; the professional statistician will find the book ubiquitously naive."
Aaron Brown
Aaron C. Brown
Aaron C. Brown is an American finance professor, author and quant. He wrote Red-Blooded Risk: The Secret History of Wall Street, The Poker Face of Wall Street and A World of Chance...
, a finance professor at Yeshiva University
Yeshiva University
Yeshiva University is a private university in New York City, with six campuses in New York and one in Israel. Founded in 1886, it is a research university ranked as 45th in the US among national universities by U.S. News & World Report in 2012...
, said that "the book reads as if Taleb has never heard of nonparametric methods
Non-parametric statistics
In statistics, the term non-parametric statistics has at least two different meanings:The first meaning of non-parametric covers techniques that do not rely on data belonging to any particular distribution. These include, among others:...
, data analysis
Data analysis
Analysis of data is a process of inspecting, cleaning, transforming, and modeling data with the goal of highlighting useful information, suggesting conclusions, and supporting decision making...
, visualization tools or robust estimation
Robust statistics
Robust statistics provides an alternative approach to classical statistical methods. The motivation is to produce estimators that are not unduly affected by small departures from model assumptions.- Introduction :...
." Nonetheless, he calls the book "essential reading" and urges statisticians to overlook the insults to get the "important philosophic and mathematical truths." Taleb replied in the second edition of The Black Swan that "One of the most common (but useless) comments I hear is that some solutions can come from 'robust statistics.' I wonder how using these techniques can create information where there is none". While praising the book, Westfall and Hilbe in 2007 complained that Taleb's criticism is "often unfounded and sometimes outrageous." Taleb's contentious style, they say, "describes writers and professionals as knaves or fools, mostly fools. His writing is full of irrelevances, asides and colloquialisms, reading like the conversation of a raconteur rather than a tightly argued thesis." Taleb felt the academics showed "bad faith" by criticizing a literary book that claimed to be a literary book and by ignoring the empirical evidence provided in his appendix and more technical works.
The late Berkeley statistician David Freedman said that efforts by statisticians to refute Taleb's stance have been unconvincing. Taleb wrote in the second edition of The Black Swan that he had a session in 2008 with statisticians in which the hostility changed:
I found out that telling researchers "This is where your methods work very well" is vastly better than telling them "This is what you guys don’t know." So when I presented to what was until then the most hostile crowd in the world, members of the American Statistical Association, a map of the four quadrants, and told them: your knowledge works beautifully in these three quadrants, but beware of the fourth one, as this is where the Black Swans breed, I received instant approval, support, offers of permanent friendship, refreshments (Diet Coke), invitations to come present at their sessions, even hugs(...) They tried to convince me that statisticians were not responsible for these aberrations, which come from people in the social sciences who apply statistical methods without understanding them.
Taleb and Nobel laureate Myron Scholes
Myron Scholes
Myron Samuel Scholes is a Canadian-born American financial economist who is best known as one of the authors of the Black–Scholes equation. In 1997 he was awarded the Nobel Memorial Prize in Economic Sciences for a method to determine the value of derivatives...
have traded personal attacks, particularly after Taleb's paper with Espen Haug on why nobody used the Black-Scholes-Merton formula. Taleb said that Scholes was responsible for the financial crises of 2008, and suggested that "this guy should be in a retirement home doing Sudoku. His funds have blown up twice. He shouldn't be allowed in Washington to lecture anyone on risk." Scholes retorted that Taleb simply "popularises ideas and is making money selling books". Scholes claimed that Taleb does not cite previous literature, and for this reason Taleb is not taken seriously in academia. Taleb and Haug (2010) listed hundreds of research documents showing the Black-Scholes formula was not Scholes' at all and argued that the economics establishment ignored the literature by practitioners and mathematicians (such as Ed Thorp), who had developed a more sophisticated version of the formula.
Citing his academic works on the same topics covered in The Black Swan, Taleb said that "Academics should comment on data there, not make technical comments on a literary book". He has said that no direct published criticism has been directed at his ideas, but rather at his person and style. He wrote, "you never win an argument until they attack your person." In an interview on Charlie Rose
Charlie Rose (talk show)
Charlie Rose is an American television interview show, with Charlie Rose as executive producer, executive editor, and host. The show is syndicated...
, Taleb said that he was pleased that none of the criticism he received for The Black Swan had any substance, as it was either unintelligent, ad hominem
Ad hominem
An ad hominem , short for argumentum ad hominem, is an attempt to negate the truth of a claim by pointing out a negative characteristic or belief of the person supporting it...
, or style over substance, which convinced him to "go for the jugular" with a huge financial bet on the breakdown of statistical methods in finance.
Taleb's aggressive attitude against the finance industry has led to personal attacks, including a smear campaign and death threats from former employees of Lehman Brothers
Lehman Brothers
Lehman Brothers Holdings Inc. was a global financial services firm. Before declaring bankruptcy in 2008, Lehman was the fourth largest investment bank in the USA , doing business in investment banking, equity and fixed-income sales and trading Lehman Brothers Holdings Inc. (former NYSE ticker...
.
Personal life
Though a non-smoker, Taleb suffered from throat cancer in the mid-1990s, which he overcame. According to his official bio, he has dual residence in New York and Amioun, Lebanon.. He has stated that his major hobby is "teasing people who take themselves and the quality of their knowledge too seriously and those who don't have the guts to sometimes say: 'I don’t know ...'" Some reporters have commented that information about his personal life is difficult to extract, though Taleb appears to enjoy being in the limelight. Others find him more talkative: Malcolm GladwellMalcolm Gladwell
Malcolm Gladwell, CM is a Canadian journalist, bestselling author, and speaker. He is currently based in New York City and has been a staff writer for The New Yorker since 1996...
, in What the Dog Saw
What the Dog Saw: And Other Adventures
What the Dog Saw: And Other Adventures is the fourth book released by author Malcolm Gladwell, on October 20, 2009. The book is a compilation of the journalist's articles published in The New Yorker.-Background:...
, wrote: "We would have lunches that would last for hours. The delight I took in his company was offset only by the dread I felt at the prospect of transcribing all those hours of tapes."
Literary and nontechnical books
The French edition of Fooled by Randomness with revisions and changes to the English version..The book was completed in 2010 with the second edition including a long essay "On Robustness and Fragility".Scholarly and technical publications
- Taleb, N. N. (2004) Bleed or Blowup: What Does Empirical Psychology Tell Us About the Preference For Negative Skewness?, Journal of Behavioral Finance, 5
- Taleb, N. N. (2004) “These Extreme Exceptions of Commodity Derivatives.” in Helyette German, Commodities and Commodity Derivatives. New York: Wiley.
- Taleb, N. N. (2004) “Roots of Unfairness.” Literary Research/Recherche littéraire. 21(41–42): 241–254.
- Taleb, N. N. (2004) “On Skewness in Investment Choices.” Greenwich Rountable Quarterly 2.
- Taleb, N. N. (2004) "I problemi epistemologici del risk management " in: Daniele Pace (a cura di) "Economia del rischio. Antologia di scritti su rischio e decisione economica", Giuffrè, Milano
- Taleb, N. N. (2005) "Fat Tails, Asymmetric Knowledge, and Decision making: Essay in Honor of Benoit Mandelbrot's 80th Birthday." Technical paper series, Willmott (March): 56–59.
- Derman, E.Emanuel DermanEmanuel Derman is a South African-born academic, businessman and writer. He is best known as a quantitative analyst, and author of the book My Life as A Quant: Reflections on Physics and Finance....
and Taleb, N. N. (2005) The Illusion of Dynamic Replication, Quantitative Finance, vol. 5, 4 - Taleb, N. N. (2006) "Homo Ludens and homo Economicus." Foreword to Aaron Brown's The Poker Face of Wall Street. New York: Wiley.
- Goldstein, D. G. and Taleb, N. N. (2007) We Don't Quite Know What We Are Talking About When We Talk About Volatility, Journal of Portfolio Management, Summer 2007.
- Taleb, N. N. (2007) "Black Swan and Domains of Statistics", The American Statistician, August 2007, Vol. 61, No. 3
- Taleb, N. N. and Pilpel, A. (2007)Epistemology and Risk Management, "Risk and Regulation", 13, Summer 2007
- Taleb, N. N. (2008) Infinite Variance and the Problems of Practice, Complexity, 14(2).
- Taleb, N. N. (in Press), Errors, Robustness, and the Fourth Quadrant, International Journal of Forecasting (forthcoming)
- Haug, E. G. and Taleb, N. N. (2008) Why We Have Never Used the Black-Scholes-Merton Option Pricing Formula, Wilmott
- Taleb, N. N., Golstein, D. G., and Spitznagel, M., 2009, "The Six Mistakes Executives Make in Risk Management", Harvard Business Review , October
- Taleb, N. and Tapiero, C.Too Big to Fail and the Fallacy of Large Institutions (forthcoming)
- Makridakis, S. and Taleb, N., 2009, "Decision making and planning under low levels of predictability", International Journal of Forecasting (in press)
- Mandelbrot, B. and Taleb, N. N. (in Press). Random Jump, not Random Walk. In Francis Diebold and Richard Herring (Eds.), The Known, the Unknown, and the Unknowable, Princeton University Press
- Taleb, N. N. and Pilpel, A., 2010, “The Prediction of Action”, in (eds. T. O' Connor & C. Sandis) A Companion to the Philosophy of Action (Wiley-Blackwell).
- Taleb, N. N., 2010, Common Errors in the Interpretation of the Ideas of The Black Swan and Associated Papers,Critical Review, Vol 21, No 4
- Taleb, N. and Tapiero, C., 2010, The Risk Externalities of Too Big to Fail in press,Physica A
- Haug, E. G. and Taleb, N. N., 2010, Why Option Traders Have Never Used the Formula known as Black-Scholes-Merton Equation, forthcoming, Journal of Economic Behavior and Organizations
- Taleb, N.N., 2010,Robustness and Model Error inside the Fourth Quadrant, forthcoming.
- Taleb, N.N., 2011,Why Did the Crisis of 2008 Happen?, forthcoming, New Political Economy
- Douady, R, and Taleb,N.N.,2011, Statistical Undecidability, forthcoming.
- Taleb, N.N. and Blyth, M, 2011, The Black Swan of Cairo ,Foreign Affairs, 90, 3
Essays in literary journals
- Taleb, N. N. (2009) Le cygne noir de Yevgenia in Delicious Paper (Paris)
- Taleb, N. N. (2010) Be a gentleman on the treadmill in The DrawbridgeThe DrawbridgeThe Drawbridge is a quarterly newspaper started in London, England in 2006. It is a full-colour independent paper which has published articles by Isabel Allende, J.G. Ballard, John Berger, Terry Eagleton, Umberto Eco, John N...
(London)
Other essays
- Taleb, N. N. (2005) Edge article: The Opiates of the Middle Class
- Taleb, N. N. (2006) "On Forecasting." In John Brokman, ed., In "What We Believe But Cannot Prove: Today's Leading Thinkers on Science and the Age of Certainty. New York: Harper Perennial.
- Taleb, N. N. (2008) Edge article: Real Life is Not a Casino, in John Brokman, ed., Edge Question 2008. New York:Harper Perennial. The article explains Taleb's position on global warming and why we need to be green regardless of models.
- Taleb, N. N. (2008) Edge Essay: The Fourth Quadrant: A Map of the Limits of Statistics
- Taleb, N. N. (2009) Edge article: The Idea of Iatrogenic Science, in John Brokman, ed., Edge Question 2009. New York: Harper Perennial.
- Taleb, N. N. (2011) Edge article: AntiFragility Or the Property of Disorder Loving Systems, forthcoming in John Brokman, ed., Edge Question 2011. New York: Harper Perennial.
Collaborations
- Taleb was collaborating with Benoit MandelbrotBenoît MandelbrotBenoît B. Mandelbrot was a French American mathematician. Born in Poland, he moved to France with his family when he was a child...
on a general theory of risk management. - Taleb also works with Daniel GoldsteinDaniel GoldsteinDaniel Goldstein is an Americanpsychologist known for the specification and testing ofheuristics and models of bounded rationality in the field ofjudgment and decision making.-Academic career:...
on a project to test empirically people's intuitions about ecological and high impact uncertainty.
Honors
- Inducted into the Derivatives Hall of Fame in February 2001.
- Selected for the Power 30 in Business by SmartMoneySmartMoneySmartMoney The Wall Street Journal Magazine of Personal Business was launched in 1992 by Hearst Corporation and Dow Jones & Company. In 2010, Hearst sold its stake to Dow Jones. Its first editor was Norman Pearlstine....
in October 2007. - 2007 getAbstract International Book AwardGetAbstract International Book AwardThe ‘‘'getAbstract International Book Award’‘' is focused on non-fiction books that have made a significant impact worldwide. Each year, getAbstract's editors assess more than 10,000 English and German non-fiction books...
. - 2008 Frost & Sullivan Visionary of the Year Award.
- 2008 Prospect Magazine Long list for Public Intellectual of the Year.
- 2009 Made the Forbes Magazine list of "Most Influential Management Gurus".
- In 2011, he made the Bloomberg 50 most influential people in global finance.
See also
- Taleb distributionTaleb DistributionIn economics and finance, a Taleb distribution is a term coined by U.K. economists/journalists Martin Wolf and John Kay to describe a returns profile that appears at times deceptively low-risk with steady returns, but experiences periodically catastrophic drawdowns. It does not describe a...
- Applications of randomnessApplications of randomnessRandomness has many uses in gambling, statistics, cryptography, art, etc.These uses have different randomness requirements, which leads to the use of different randomization methods...
- List of American philosophers
External links
- Nassim Taleb's home page
- Lecture on Philosophy of Probability at Princeton University
- The Future Has Always Been Crazier Than We Thought discussion on his book, "The Black Swan (Taleb book)", at The Long Now Foundation, February 2008
- Reflection on a Crisis discussion with Nobel Laureate Daniel KahnemanDaniel KahnemanDaniel Kahneman is an Israeli-American psychologist and Nobel laureate. He is notable for his work on the psychology of judgment and decision-making, behavioral economics and hedonic psychology....
at Digital, Life, Design (DLD), January 2009 - Building a "Black Swan-Robust" Society conversation with Prime Minister David CameronDavid CameronDavid William Donald Cameron is the current Prime Minister of the United Kingdom, First Lord of the Treasury, Minister for the Civil Service and Leader of the Conservative Party. Cameron represents Witney as its Member of Parliament ....
and Daniel FinkelsteinDaniel FinkelsteinDaniel Finkelstein OBE is a British journalist and former politician. He is the Executive Editor of The Times, where he's also Chief Leader Writer and a weekly political columnist.-Background:...
at The RSA, August 2009
Interviews
- Interview with Constantine Sandis
- Taleb on Black Swans Podcast interview with Nassim Taleb at EconTalkEconTalkEconTalk is a weekly podcast hosted by professor Russell Roberts at George Mason University. Roberts interviews guests—often professional economists—on topics in economics....
- Econtalk presenting Taleb's Austrian economics point of view
- Radio interview on Philosophy TalkPhilosophy TalkPhilosophy Talk is a talk radio program co-hosted by John Perry and Ken Taylor, who are professors at Stanford University. The show is also available as a podcast, available for purchase. The program deals both with fundamental problems of philosophy and with the works of famous philosophers,...
- Nassim Nicholas Taleb Interview – June 2010 New Statesman
Review
- FrankVoisin.com – Summary and review of Fooled By Randomness