Thursday, July 16, 2009

Tired Of Taleb?

Theodore Sturgeon famously said "80% of everything is crap." I remain convinced that if he had lived to see the Internet, he would have revised his figures substantially upward.

How that quote is relevant is because I was disappointed by this guest column on the normally thoughtful and insightful Infectious Greed blog (which defies the odds by usually being 80% good) by author Pablo Triana:

Paul Kedrosky's Infectious Greed: Guest Post: Nassim Taleb Got It Right

Unless you're just now tuning into the world financial crisis, I'm struggling to see what insight this essay has to offer, beyond a lot of back patting, which is somewhat redundant given how self-sufficient Taleb is when it comes to very public acts of self-congratulation. That, and telling us, again and repeatedly, what he's already told us many times before.

As a reader of Taleb's work I have to wonder at his self-exemption from his own line of reasoning from Fooled By Randomness.

Take a big enough sample of mathematicians and economists, and like the proverbial monkeys with typewriters, Taleb would argue that just as a large enough sample of investors will produce someone as wealthy as Warren Buffett, it's inevitable that one of them would be right about what was going to happen.

If it was someone else, he'd call them a product of survivor bias, but because it just happened to be him, that make him a genius.

Besides, the fact that this Taleb is correct is a sample size of one, which anyone tell you is meaningless, but of all the possible economic scenarios, what about the average across all possible Talebs? Would the deviation across the Taleb mean be significant? Would all possible Taleb's be mostly-wrong, or mostly-right? If you buy into Fooled By Randomness, this is important!

More than one commentator has begun to think that Taleb is growing tiresome. At the risk of sounding cute, he's gone from being a Cassandra to being a broken record.

I don't begrudge Taleb his passion for appearing on television, but if he's going to keep up his schedule of media appearances, it's time to stop telling us what he began telling us ten years ago.

It's time to pull the self-congratulation train into the station, and tell us what he thinks is going to happen in the next ten years, and start dining out on that, if and when he happens to be right.

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Anonymous said...

Speaking of prophets, Jon Stewart was brilliant on Lenny Dykstra as an investor, and his great cheering section, Jim Cramer. Oddly enough, Dykstra is now both seriously in debt and being sued. So much for brilliance.

Elvijs said...

I'm not sure that I got what this is post is really about...

Are you saying that the guy who's main message is, that the future is really unpredictable, and that we are generally over optimistic about the unpredictable bad events and over pessimistic about the unexpected bad events, should do what he is actively against - predict the future!?