One has to chose [between] being writing books and being a writer, between doing and being (or impersonating) –in anything. Once you figure out your preference, everything becomes so easy.
One has to chose…
Leave a reply
Monthly Archives: December 2011
A Quant’s Apology: Bar Humbug – The Talebian Bar-Bell Portfolio, Part I
In the end I added this to the ‘haters’ category. Especially after I read this post. He seems to be writing anonymously. Anyone know who it is?
According to philosopher Taleb we can have heuristics, but not optimization. Optimization leads to airport delays. It also leads to cheaper tickets and in this exciting two part installment I will merely attempt to clarify, and separate, the two separate pieces of advice which have been rather successfully promulgated:
It is wise to bet on unexpected outcomes, because markets underprice them
It is wise to adopt a bar-bell portfolio eschewing a middle ground of only moderately risky investments
My hope is that those of you falling for the long-shot lure might nevertheless hear me out, because you have not considered the possibility that 2 does not follow from 1. You are fools, frankly, but I have little interest in arguing about the first belief per se, just at the moment, because nobody has been able to explain to me why Taleb’s redressing of the longshot lure does not apply to situations where it is obviously wrong (like the racetrack).
It is the implication 1 => 2 I find rather more intriguing because like most pseudo-science it sounds perfectly reasonable, almost compelling. Yet if you were assuming that the world’s foremost thinker on probability and uncertainty has thought about it carefully on your behalf, and you need not, think again. We shall pry the two beliefs apart because the benefits of long-shot betting, real or imagined, do not suggest a bar-bell strategy.
via A Quant’s Apology: Bar Humbug – The Talebian Bar-Bell Portfolio, Part I.
HatTip to Dave Lull!
Modernism starts…
Modernism starts with the state’s monopoly on violence, and ends with the state’s monopoly on fiscal irresponsibility.
You can focus on your actions or on your reputation, not both.
You can focus on your actions or on your reputation, not both.
CORRECTED EARLIER POST (happy to be human)
CORRECTED EARLIER POST (happy to be human) –
Incidentally, for those who think that academia is “quieter” and a emotionally soothing transition after the volatile risk-taking business life, a surprise: when in action, new problems and scares emerge every day to displace and eliminate the previous day’s headaches, resentments, and conflicts. A nail displaces another nail. But academics seem to hate each other; they live in petty obsessions, envy, and hatreds, with small snubs developing into grudges, fossilized over time in the loneliness of the transaction with a computer screen… Contact with the brutish world of words on PDF pages reignited my love of the transactional : commerce, business, markets, Levantine souks (though not large-scale markets), activities and places that bring their best in people, makes them forgiving, honest, loving, trusting, and open-minded. I want to be happy to be human and be in an environment in which other people are in love of their fate —and never thought that it was a certain form of commerce. Matt Ridley made me feel that it was truly the Phoenician in me that was the intellectual.