Nassim was the feature speaker at ai5000’s Chief Investment Officer Summit in New York (May 2010). The summit had more than $1 trillion in pension, endowment, foundation, and insurance fund assets under management represented at the event. The following videos are from a Q&A with him (before) the event.
The most important issues for Chief Investment Officers (CIOs)
- Be over insured, have as low leverage as you can.
- Change your way of thinking by adopting at your core a defensive strategy.
- Don’t be afraid of being aggressively in cash.
- Avoid clustering, following what other CIOs are doing, following the crowd just because that is what everyone else is doing.
- Use Taleb’s ‘Barbell Strategy’: Be very aggressive with a small part of your portfolio, and massively paranoid with the rest, giving on average medium risk portfolio. This strategy means cannot lose more than a certain amount of money that you have already allowed for the possibility of happening. Your actual risks are not dependant on a prior computation of risks.
- The key central point is to generally be robust, namely being resistant to adverse shocks (black swans).