Tag Archives: book review

Life is long gamma – The Hindu

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That’s where the heading of this piece comes from — in trading jargon, when someone holds a ‘long gamma’ position, any movement in price is good news. In other words, long gamma means that which benefits from volatility or the non-linear. Excessive planning and smoothening are attempts to force something that’s predominantly non-linear into an easy linear graph, a simplification that distorts dangerously.

Taleb thus argues that depriving political and economic systems of natural volatility (non-linearity) — that is, making things artificially smooth — harms them more by leaving them unprepared when the biggie strikes. Take the turkey example. A turkey fattened for 1000 days imagines that life and the butcher love it. The turkey, its friends and family have absolutely no reason for 1000 days to doubt this. On the 1001 day, the Black Swan strikes. The most dangerous mistake the turkey made was to believe that the absence of evidence of harm meant the absence of harm.

via Life is long gamma – The Hindu.

Is Your Business Fragile? Or Antifragile?

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Perversely, however, the very governmental policies that are designed to protect us all from the dangers of economic cycles and random problems are in fact making the world economy ever more fragile – more vulnerable, as a system, to unforeseen problems. And as I’ve written before, this is exacerbated by the increasing interconnectedness of our entire world economic system, which tends to speed up the “feedback loops” that drive cascades of sentiment and interactions. The recent economic crisis is a perfect illustration of his point. The simple fact is that there is no such thing as an invariant antifragile system – that is, tranquility and invariability inevitably lead any complex system (like the world economy) to become fragile, getting more rigid and increasingly vulnerable to unforeseen events the longer the system remains unstressed by changes.

Unfortunately, it is the ability of individual businesses to fail that makes the overall economic system antifragile. According to Taleb, “In a system, the sacrifices of some units—fragile units, that is, or people—are often necessary for the well-being of other units or the whole. The fragility of every startup is necessary for the economy to be antifragile, and that’s what makes, among other things, entrepreneurship work: the fragility of individual entrepreneurs and their necessarily high failure rate.” So business failures are unfortunate, but they are necessary.

If this were all there were in Taleb’s book it would be well worth the read, but there is much more.

via Don Peppers Is Your Business Fragile? Or Antifragile? | LinkedIn.

Amazon.com: Nassim N Taleb’s review of Probability, Random Variables and Stochastic Processes

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5.0 out of 5 stars
Found no substitute for a difficult subject, July 21, 2013
By N N Taleb “Nassim N Taleb”Amazon Verified Purchase
This review is from: Probability, Random Variables and Stochastic Processes Paperback
When readers and students ask to me for a useable book for nonmathematicians to get into probability or a probabilistic approach to statistics, before embarking into deeper problems, I suggest this book by the Late A. Papoulis. I even recommend it to mathematicians as their training often tends to make them spend too much time on limit theorems and very little on the actual “plumbing”.The treatment has no measure theory, cuts to the chase, and can be used as a desk reference. If you want measure theory, go spend some time reading Billingsley. A deep understanding of measure theory is not necessary for scientific and engineering applications; it is not necessary for those who do not want to work on theorems and technical proofs.I’ve notice a few complaints in the comments section by people who felt frustrated by the treatment: do not pay attention to them. Ignore them. It the subject itself that is difficult, not this book. The book, in fact, is admirable and comprehensive given the current state of the art.I am using this book as a benchmark while writing my own, but more advanced, textbook on errors in use of statistical models. Anything derived and presented in Papoulis, I can skip. And when students ask me what they need as pre-requisite to attend my class or read my book, my answer is: Papoulis if you are a scientist, Varadhan if you are more abstract.

HatTip to Dave Lull via Amazon.com: N N Taleb “Nassim N Taleb”‘s review of Probability, Random Variables and Stochast….

Fragile Reasoning in Nassim Taleb’s “Antifragile”: An Enlightenment Transhumanist Critique | QL | Gennady Stolyarov II

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Never before have I set out to read a book with such high expectations, only to encounter such severe disappointment. As an admirer of Nassim Taleb’s earlier books, Fooled by Randomness and The Black Swan, I expected to find insight and wisdom along similar lines in Antifragile. While Taleb’s latest book does contain some valid observations and a few intriguing general strategies for living, the overwhelming thrust of the book is one of bitter distaste for modernity (and, to a significant extent, technological progress), as well as an abundance of insults for anyone who would disagree with not just Taleb’s ideas, but with his personal esthetic preferences. While sensible in the realms of finance and (mostly) economics, Taleb’s prescriptions in other fields venture outside of his realms of mastery and, if embraced, would result in a relapse of the barbarisms of premodernity. Perhaps as the outcome of his own phenomenal success, Taleb has become set in his ways and has transitioned from offering some controversial, revolutionary, and genuinely insightful ideas to constructing a static, intolerant, totalistic worldview that rejects deviations in any field of life – and the persons who so deviate.

via Fragile Reasoning in Nassim Taleb’s “Antifragile”: An Enlightenment Transhumanist Critique | QL | Gennady Stolyarov II.

ImageNations: Antifragile: Things That Gain from Disorder by Nassim Nicholas Taleb

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Funny enough, when these economic collapse occur, after the intervention, those who prescribed the cure that led to the doom, those whom Nassim refers to as Fragilistas and who confuse what they do not know with its non-existence (the absence of evidence with evidence of absence), in the full glow of their epistemic arrogance those who offer the solutions. In spite of the fact that they proffer further complicated interventions they do not understand, they also do not have their skin in the game and so suffer no consequences of their actions. If they are banksters, society will take the negative fallouts; if they are politicians, they will move into other lucrative positions.

However, this is not to say that by allowing mediocristan variability or randomness you automatically eliminate Black Swans. Rather, consistent exposure to mediocristan variability builds antifragility within a system. A shock to a system or body prepares the body to expect and tolerate another shock bigger than previous: information transmission from the genes to the tissues to the organs to the organism to the community.

via ImageNations: 16. Antifragile: Things That Gain from Disorder by Nassim Nicholas Taleb.