Category Archives: Contributors

Beware the Big Errors of ‘Big Data’ | Wired Opinion | Wired.com

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And speaking of genetics, why haven’t we found much of significance in the dozen or so years since we’ve decoded the human genome?

Well, if I generate by simulation a set of 200 variables — completely random and totally unrelated to each other — with about 1,000 data points for each, then it would be near impossible not to find in it a certain number of “significant” correlations of sorts. But these correlations would be entirely spurious. And while there are techniques to control the cherry-picking such as the Bonferroni adjustment, they don’t catch the culprits — much as regulation didn’t stop insiders from gaming the system. You can’t really police researchers, particularly when they are free agents toying with the large data available on the web.

I am not saying here that there is no information in big data. There is plenty of information. The problem — the central issue — is that the needle comes in an increasingly larger haystack.

via Beware the Big Errors of ‘Big Data’ | Wired Opinion | Wired.com.

Nassim Taleb and Daniel Kahneman: Black Swan Shows Fragility under Heavy Weight of Anchoring | Enterprising Investor

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Interestingly, each man was asked to write a biography of seven words or less. Taleb described himself as: “Convexity. Mental probabilistic heuristics approach to uncertainty.” Kahneman apparently pleaded with the moderator to only use five words, which were: “Endlessly amused by people’s minds.” Not surprisingly these two autobiographies are descriptive of the two men’s bodies of work. Much of the discussion at this event, however, was not about making decisions under uncertainty, but a sort of tit for tat, with Kahneman asking probing questions and making pointed observations of Taleb. Little of the Nobel laureate’s work was discussed.

via Nassim Taleb and Daniel Kahneman: Black Swan Shows Fragility under Heavy Weight of Anchoring | Enterprising Investor.

More Skin in the Game in 2013 by Nassim Nicholas Taleb – Project Syndicate

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I tell people what I have in my portfolio, not what I predict; that way, I will be the first to be harmed. It is not ethical to drag people into these exposures without incurring the risk of losses. In my book Antifragile, I tell people what I do, not what they should do, to the great irritation of the literary critics. I do so not for autobiographical reasons, but only because the other approach would not be ethical.

CommentsFinally, there are warmongers. To deal with them, the onetime consumer advocate and former US presidential candidate Ralph Nader has proposed that those who vote in favor of war should place themselves or a descendent into military service.

CommentsOne can only hope that something will be done in 2013 to implement some skin in the game heuristics. A safe and just society demands nothing less.

via More Skin in the Game in 2013 by Nassim Nicholas Taleb – Project Syndicate.

Friends, the final revision of my rebuttal of the idea that *small probabilities are expensive…

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Friends, the final revision of my rebuttal of the idea that *small probabilities are expensive* (Ilmanen’s paper) is about to be submitted to FAJ (where his paper was published). I link it to the general error, a methological blindess to fat tails, I now call “Pinker empiricism”.

http://www.fooledbyrandomness.com/Ilmanen.pdf

Comments on the first part is welcome as the editors need the paper by Monday. Thanks in advance.

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Taleb On “Skin In The Game” And His Disdain For Public Intellectuals | Zero Hedge

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I have the ReasonTV interview earlier on the blog. But in case you were wondering what Zero Hedge thought of it…

Nassim Taleb sits down for a quite extensive interview based around his new book Anti-Fragile. Whether the Black Swan best-seller is philosopher or trader is up to you but the discussion is worth the time as Taleb wonders rigorously from the basic tenets of capitalism – “being more about disincentives that incentives” as failure he believes is critical to its success and is clearly not allowed in our current environment – to his intellectual influences and total disdain for the likes of Krugman, Stiglitz, and Friedman – who all espouse grandiose and verbose work with no accountability whatsoever. His fears of large centralized states such as the US is becoming and Europe is become being prone to fail along with his libertarianism make for good viewing. However, his fundamental premise that TBTF banks should be nationalized and the critical importance of ‘skin in the game’ for a functioning financial system are all so crucial for the current ‘do no harm’ regime in which we live. Grab a beer or glass of wine, it is Taleb and watch…

via Taleb On “Skin In The Game” And His Disdain For Public Intellectuals | Zero Hedge.