Monthly Archives: November 2012

You don’t need a physics degree to ride a bicycle. Nor, Nassim Nicholas Taleb realized one day, do traders need to understand the mathematical theorems of options trading to trade options. Instead traders discover “heuristics,” or rules of thumb, by trial and error. These are then formalized by academics into theorems and taught to new generations of traders, who become slaves to theory, ignore their own common sense and end by blowing up the system. In a neat echo of its own thesis, Mr. Taleb’s paper making this point sat unpublished for seven years while academic reviewers tried to alter it to fit their prejudices.

Economic Bricolage: We should treat failed entrepreneurs with the reverence that we reserve for fallen soldiers.