Example:

Probability was created with the wrong type of intelligence. Intelligence, “in the sense of IQ tests and SAT scores” is not, we learn from Taleb, “as natural & ancestrally fit as wit”. By not natural, the philosopher explains, “I mean not Black-Swan robust, skills we call intelligence because of a certain construction, but that are not needed ecologically”. The modern day thinker is referring to mating probabilities and poses an important question for humorless nerds without dates. “Is ‘intelligence’ without wit & verbal brilliance really intelligence?” If not, it stands to reason, we should be using ecologically valid criteria to “define true intelligence” and more importantly, to discern “relevant subjects”. One might conclude for example that “painting, wit, music are more NATURAL than abstract mathematics”.

How much of this nonsense does Taleb need to spurt before journalists peg him for what he is? Lift your game Felix.

http://www.quantapology.com

What is that comment supposed to tell us? Taleb himself says so in his book where he traces the intellectual history of his ideas. What he did was bring together ideas from different fields to show how uncertainty and randomness is more relevant today, and how our mistaken belief in forecasting is making us more vulnerable.

Moreover, Steve confuses existence of ideas with appreciation of the same. Taleb does a good job of showing how the intellectual tradition that he is part of has been largely ignored. And while his book has made an impact, it will still take some time before economics departments reduce their fixation on hypercharged mathematics.

BTW, Nassim is the keynote speaker at our conference tomorrow in NYC — you are invited

http://secure.pnmi.com/bigpicture/

I have read both (Mis)Behavior of Markets and Fractal Geometry of Nature. In fact, some of Taleb’s idea can be traced back to those of Sextus Empiricus and Pyrrhonism (knowledge without cause). What he points out, among other things is the problem with using any kind of theoretical mathematical model for decision making, beyond studying their descriptive properties (and not predictive).

On a more general note: almost all modern thinkers try to understand our world (be it finance or ecology) and make decisions based on their understanding. This is where Taleb differs. He is trying to make a framework for decision making under uncertainty and ignorance. And that is what I meant when I said ‘his ideas’.

On the other hand, I used to get quoted in Barron’s all the time back in the 1990s in the options column. Half the time they got the story completely wrong. I would say something like volatility was low, so we want to situate ourselves for a rise in volatility. They would write, “Don Fishback expects volatility to be low.” Must be those layers of fact checkers in the U.S.

I guess we’ll find out if there is a retraction, clarification, correction. Should be interesting.

There is nothing new about Taleb’s ideas. You can easily trace them back to Benoit Mandelbrot’s 1963 paper about the behavior of cotton markets. And Taleb’s 2005 review of Mandelbrot’s book “The (Mis)Behavior of Markets” provides more of Taleb’s perspective on these matters. The reference follows.

Mandelbrot Makes Sense: A Book Review Essay
by Nicholas Taleb

A discussion of Benoit Mandelbrot’s “The (Mis)Behavior of Markets” by Nassim Nicholas Taleb (Wilmott Magazine, 2005)

http://www.fooledbyrandomness.com/mandel brotandhudson.pdf

Though I think that most who try to point minute almost useless details, over his ideas will take anything from this.

It may take years, even generations for people to fully appreciate his ideas. And see the problem with post Enlightenment style ‘rationality’ in an inherently complex world.

Note to Americans: he’s not talking about American money.