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Nassim Nicholas Taleb

Nassim Nicholas Taleb

@nassim-taleb · 38 positions · On ppll ↗

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.

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.

4 of Nassim Nicholas Taleb's claims fit 4 mental models. Most often: Power laws, Inversion, Margin of safety.

Models we see in what they say

Our reading: their claim applies the idea without naming it. The claim is theirs; filing it here is ours.

Power laws

In many things a few cases account for most of the result, so the average misleads and the outlier decides.

Used by 25 others

With no typical event under fat tails, prediction markets are ludicrous because they make events look binary

  1. Nassim Nicholas Taleb Former option trader and risk analyst This 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 · 14 Sept 2008All korrents from this piece
    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

    14 Sept 2008

In complex decisions exposed to fat tails, decisions should not rest on statistically based claims

Mental modelProbabilistic thinking

  1. Nassim Nicholas Taleb Former option trader and risk analyst Here 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 · 14 Sept 2008All korrents from this piece
    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

    14 Sept 2008

Inversion

Work a problem backward: ask what would guarantee failure, then avoid it.

Used by 3 others

Prosperity comes from avoiding blowups, as longer life comes from avoiding death

  1. Nassim Nicholas Taleb Former option trader and risk analyst You 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 · 14 Sept 2008All korrents from this piece
    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

    14 Sept 2008

Margin of safety

Leave room for being wrong, because sometimes you will be.

Used by 29 others

Only fools optimize, since a simple model error can blow through their capital

  1. Nassim Nicholas Taleb Former option trader and risk analyst Only 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 · 14 Sept 2008All korrents from this piece
    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

    14 Sept 2008

Probabilistic thinking

Think in odds, not certainties, and bet heavily only when the odds are clearly yours.

Used by 28 others

In complex decisions exposed to fat tails, decisions should not rest on statistically based claims

Mental modelPower laws

  1. Nassim Nicholas Taleb Former option trader and risk analyst Here 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 · 14 Sept 2008All korrents from this piece
    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

    14 Sept 2008