Interesting article on Black Swans/Nassim Taleb

[Jeff W]

http://www.gladwell.com/2002/2002_04_29_a_blowingup.htm

[bmxicle]

that is one of the most fascinating articles i have read in a long time, thanks.

[gummy d]

Nice find. thanks for sharing.

[Big TR]

This was a good read. Do you, or does anybody, have a follow-up to this story since this article is 5 years old? How is Empirica doing?

[Sniper]

According to this 2005 article in Business Week...

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Taleb's long-term investment returns aren't public, but he says trades placed during the market crash of 1987 and the Nasdaq dive of 2000 were profitable enough to keep his strategy in the black for several decades.

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His latest book was recently released as well... The Black Swan: The Impact of the Highly Improbable

MrNow have you read it yet?

[Big TR]

Here is Gregg Easterbrook's review of the book in the New York Times. Sorry if the link doesn't work, I've never tried to embed a link.

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[url=http://www.nytimes.com/2007/04/22/books/review/Easterbrook.t.html?ex=1334635200&en=1e34338780 a318c3&ei=5124&partner=permalink&expro d=permalink&pagewanted=all[/url]

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[Sniper]

Thanks, here's the link... Sunday NYTimes Book Review

Also, 1st Chapter excerpt from The Black Swan

[Tupacia]

There was a great interview with Nasim on CNBC a few minutes ago. He talked about how the typical investor is exposed to black swan events because their entire portfolio typically consists of medium-risk securities. Nasim said that he prefers to have a large proportion of his portfolio in zero-risk securities (T-Bills) and the rest in high-risk securities. Thus, he maintains the medium-level risk profile of the traditional investor with more downside protection in the event of a negative black swan due to his T-Bills. Fascinating stuff.

[NajdorfDefense]

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This was a good read. Do you, or does anybody, have a follow-up to this story since this article is 5 years old? How is Empirica doing?

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His fund basically went out of business since he wrote Fooled by Randomness. [He likely still manage family and friend money there]

Everyone said 'He's right, start buying vol' and his alpha opportunities went to zero. Plus it's an easy strategy to replicate.

Same mistake Doyle made with SS1.

[spider]

cliffs notes: watch out for the fat tail? always leave yourself an out?