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Nassim Nicholas Taleb
199 quotes
“My major hobby is teasing people who take themselves and the quality of their knowledge too seriously and those who don’t have the guts to sometimes say: I don’t know....”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“You may not be able to change the world but can at least get some entertainment and make a living out of the epistemic arrogance of the human race.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“It is now the scientific consensus that our risk-avoidance mechanism is not mediated by the cognitive modules of our brain, but rather by the emotional ones. This may have made us fit for the Pleistocene era. Our risk machinery is designed to run away from tigers; it is not designed for the information-laden modern world.”
Nassim Nicholas Taleb (born 1960) first seen 2004 wikiquote, CC BY-SA 4.0 source
Recorded in: Quoted in the introduction to "A Talk with Nassim Nicholas Taleb," Edge (April 2004)
“Much of the research into humans' risk-avoidance machinery shows that it is antiquated and unfit for the modern world; it is made to counter repeatable attacks and learn from specifics. If someone narrowly escapes being eaten by a tiger in a certain cave, then he learns to avoid that cave.”
Nassim Nicholas Taleb (born 1960) first seen 2004 wikiquote, CC BY-SA 4.0 source
Recorded in: Learning to Expect the Unexpected," The New York Times (2004-04-08}
“We should reward people, not ridicule them, for thinking the impossible.”
Nassim Nicholas Taleb (born 1960) first seen 2004 wikiquote, CC BY-SA 4.0 source
Recorded in: Learning to Expect the Unexpected," The New York Times (2004-04-08}
“Delivering advice assumes that our cognitive apparatus rather than our emotional machinery exerts some meaningful control over our actions.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“It does not matter how frequently something succeeds if failure is too costly to bear.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“Trading forces someone to think hard; those who merely work hard generally lose their focus and intellectual energy. In addition, they end up drowning in randomness; work ethics draw people to focus on noise rather than the signal.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“Mild success can be explainable by skills and labor. Wild success is attributable to variance.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“Lucky fools do not bear the slightest suspicion that they may be lucky fools - by definition, they do not know that they belong to such a category.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“Unlike a well-defined, precise game like Russian roulette, where the risks are visible to anyone capable of multiplying and dividing by six, one does not observe the barrel of reality.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“[T]he epic poet did not judge heroes by the result... their fate depended on totally external forces... Heroes are heroes because they are heroic in behavior, not because they won or lost.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“Mixing forecast and prophecy is symptomatic of randomness-foolishness...”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“I do not dispute that arguments should be simplified to their maximum... but people often confuse complex ideas that cannot be simplified into a media-friendly statement as symptomatic of a confused mind. ...MBAs tend to blow up in financial markets, as they are trained to simplify... beyond... requirement. (...I am myself the unhappy holder of the degree.)”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“[T]he mental probabilistic map in one's mind is so geared toward the sensational that one would realize informational gains by dispensing with the news.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“From the standpoint of an institution, the existence of a risk manager has less to do with actual risk reduction than it has to do with the impression of risk reduction.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“In the early 1990s... I became addicted to the various Monte Carlo engines, which I taught myself to build... The dividend of the computer revolution... did not come in... e-mail messages and... chat rooms; it was in the sudden availability of fast processors capable of generating a million sample paths per minute.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“My models showed that ultimately almost nobody really survived; bears dropped like flies in the rally and bulls ended up being slaughtered... But there was one exception... option buyers... could buy the insurance against blowup...”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“I have two ways of learning from history: from the past, by reading the elders; and from the future, thanks to my Monte Carlo toy.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“A... vicious effect of... is that those that are good at predicting the past... think of themselves as good at predicting the future... [W]e live in a world where important events are not predictable...”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“[H]istory cannot lend itself to experimentation. But... is potent enough... to eventually bury the bad guy. Bad trades catch up with you... Mathematicians of probability give that a... name: . [R]oughly... properties of a very... long sample path would be similar to the Monte Carlo properties of an average of shorter ones. ...Those unlucky... in spite of their skills would eventually rise. The lucky fool... would slowly converge to the state of a less-lucky idiot. Each ...would revert to his long-term properties.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“[A]ge is beauty. ...[M]y instinct is to value distilled thought over newer thinking, regardless of its apparent sophistication—another reason to accumulate the hoary volumes by my bedside... For an idea to have survived so many cycles is indicative of its relative fitness. Noise, at least some noise, was filtered out. ...[P]rogress means that some new information is better than past information, not that the average of new information will supplant past information...”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“There are hordes of thoughtful journalists... [I]t is just that prominent media journalism is a thoughtless process of providing the noise that captures people's attention and there exists no mechanism for separating the two.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“I... found a significant advantage in selecting aged traders, using as a selection criterion their cumulative years of experience rather than their absolute success... [O]lder people have been exposed longer to the rare event and can be, convincingly, more resistant to it.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“Over a short time increment, one observes the variability of the portfolio, not the returns. ...[O]ne sees the variance, little else. ...Our emotions are not designed to understand the point. ...I deal with it by having no access to information. ...I prefer to read poetry.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“[N]ews... is full of noise and... history is largely stripped of it.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“A trader's mental construction should direct him to do precisely what other people do not do.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“Veteran trader Marty O'Connell calls this the firehouse effect. ...[F]iremen ...who talk to each other for too long come to agree on many things that an outside, impartial observer would find ludicrous...”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“[A]t any point in time, the richest traders are often the worst traders. This I will call the cross-sectional problem: At a given time... the most successful traders are likely to be those fit for the latest cycle.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“[T]hey share the traits of the acute successful randomness fool who, in addition, operates in the most random of environments. ...[T]heir bosses and employers shared the same trait. They, too, are permanently out of the market.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“There is a saying that bad traders divorce their spouse sooner than abandon their positions. Loyalty to ideas is not a good thing for traders, scientists - or anyone.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“Just as an animal could have survived because its sample path was lucky... free of the evolutionary rare event, the "best" operators in a given business can... One vicious attribute is that the longer these... can go without encountering the rare event, the more vulnerable they will be to it. ...[S]hould one extend time to infinity, then by , that event will happen with certainty—the species will be wiped out! For evolution means fitness to... only one time series, not the average of all possible environments.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“Why do [people] confuse probability and expectation, that is, probability [vs.] probability times payoff? Mainly because much... schooling comes from examples in symmetric environments... the... bell curve... is entirely symmetric.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“I have organized my career and business in such a way as to... benefit... I am profiting from the rare event, with asymmetric bets.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“In most disciplines... asymmetry does not matter. ...People in most fields ...do not have problems eliminating extreme values from their sample, when the difference in payoff between different outcomes is not significant ...A professor ...removes the ...s, and takes the average of the remaining ones, without ...being ...unsound. A casual weather forecaster does the same ...So people in finance borrow the technique and ignore infrequent events, not knowing that the effect ...can bankrupt a company.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“Many scientists... are... subject to such foolishness... One flagrant example is... global warming... These scientists initially ignored the fact that these [high temperature] spikes, although rare, had the effect of adding disproportionately to the cumulative melting of the ice caps. ...[A]n event, although rare, that brings large consequences cannot be ignored.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“Sometimes market data becomes a simple trap; it shows you the opposite of its nature... [e.g.,] Currencies that exhibit the largest historical stability... are the most prone to crashes.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“I reject a sole time series of the past as an indication of future performance; I need a lot more than data.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“[W]e read too much into shallow recent history... but not from history in general [which] teaches us that things that never happened before do happen. ...outside of the narrowly defined time series; the broader the look, the better the lesson.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“[T]here is a category of traders who have inverse rare events, for whom volatility is often the bearer of good news. Those traders lose money frequently, but in small amounts, and make money rarely, but in large amounts. ...crisis hunters. I am happy to be one of them.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“David Hume posed the issue in the following way (as rephrased in the black swan problem by... John Stuart Mill) No amount of observations of white swans can allow the inference that all swans are white, but the observation of a single black swan is sufficient to refute that conclusion.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“Science had shifted, thanks to Bacon, into an emphasis on empirical observation. The problem is that, without a proper method, empirical observations can lead you astray. Hume came to... stress the need for some rigor in the gathering and interpretation of knowledge... epistemology... Hume is the first modern epistemologist... he was an obsessive skeptic and never believed... that a link between two items could be established as being causal.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“Maximizing the probability of winning does not lead to maximizing the expectation from the game when one's strategy may include , i.e., a small chance of a large loss and a large chance of a small win. If you engaged in a Russian Roulette-type strategy... you are likely to show up as the winner in almost all samples—except in the year when you are dead.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“[W]e like to emit logical and rational ideas but we do not enjoy this execution.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“What is easier to remember, a collection of facts glued together, or a story, something that offers a series of logical links? Causality is easier to commit to memory. ...What is induction exactly? ...It is very handy, as the general takes much less room in onel's memory than a collection of particulars. The effect of such compression is the reduction in the degree of detected randomness.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“I will use statistics and inductive methods to make aggressive bets, but I will not use them to manage my risks and exposure. ...[A]ll the surviving traders I know seem to have done the same. ...[T]hey make sure the cost of being wrong is limited ...they know ...which events would prove their conjecture wrong and allow for it ...They would then terminate their trade. This is called a stop loss ...I find it rarely practiced.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“A mistake is not something to be determined after the fact, but in the light of the information until that point.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“I always remind myself that what one observes is at best a combination of variance and returns, not just returns.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“I try to make money infrequently, as infrequently as possible simply because I believe that rare events are not fairly valued, and that the rarer the event, the more undervalued it will be in price.”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source
“[B]ecoming more rational, or not feeling the emotions of social slights, is not part of the human race... not with our current biology. There is no solace to be found from reasoning...”
Nassim Nicholas Taleb (born 1960) wikiquote, CC BY-SA 4.0 source