Nassim Nicholas Taleb
Former option trader and risk analyst, now a distinguished professor at NYU. Author of the Incerto essay series, including The Black Swan and Fooled by Randomness.
Everything they publish, on ppll ↗
Nassim Nicholas Taleb did not write this page.
We collected these quotes from things they published elsewhere, and every quote links to where it was said. They have no account here and have not endorsed this site. Quotes are word for word; the short line under each one is our own restatement, not their wording. Their own site. Is this you? Claim it or ask us to remove it. Or tell us what is wrong here.
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Our reading
Depending on exposure, one can be extremely wrong and be fine, or slightly wrong and blow up
Their wordsIn some situations, you can be extremely wrong and be fine, in others you can be slightly wrong and explode.
↗The Fourth Quadrant: A Map of the Limits of Statistics (Edge, 2008)edge.org 1st of 8 in this piece
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Our reading
In complex decisions exposed to fat tails, decisions should not rest on statistically based claims
Their wordsHere is where your limits are. Do not base your decisions on statistically based claims.
↗The Fourth Quadrant: A Map of the Limits of Statistics (Edge, 2008)edge.org 2nd of 8 in this piece
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Their wordsIf small probability events carry large impacts, and (at the same time) these small probability events are more difficult to compute from past data itself, then: our empirical knowledge about the potential contribution—or role—of rare events (probability × consequence) is inversely proportional to their impact.
↗The Fourth Quadrant: A Map of the Limits of Statistics (Edge, 2008)edge.org 3rd of 8 in this piece
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Their wordsThis absence of "typical" event in Extremistan is what makes prediction markets ludicrous, as they make events look binary.
↗The Fourth Quadrant: A Map of the Limits of Statistics (Edge, 2008)edge.org 4th of 8 in this piece
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Their wordsYou can live longer if you avoid death, get better if you avoid bankruptcy, and become prosperous if you avoid blowups in the fourth quadrant.
↗The Fourth Quadrant: A Map of the Limits of Statistics (Edge, 2008)edge.org 5th of 8 in this piece
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Their wordsOnly fools (such as Banks) optimize, not realizing that a simple model error can blow through their capital (as it just did).
↗The Fourth Quadrant: A Map of the Limits of Statistics (Edge, 2008)edge.org 6th of 8 in this piece
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Their wordsThings that have worked for a long time are preferable—they are more likely to have reached their ergodic states.
↗The Fourth Quadrant: A Map of the Limits of Statistics (Edge, 2008)edge.org 7th of 8 in this piece
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Their wordsDo not confuse absence of volatility with absence of risks.
↗The Fourth Quadrant: A Map of the Limits of Statistics (Edge, 2008)edge.org 8th of 8 in this piece
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