Nassim Taleb talks to Consuelo Mack on WealthTrack about risk, bias, and the role of Black Swans in influencing history, investing, and more.
Nassim Nicholas Taleb’s book, “The Black Swan,” is about the power of randomness. Coincidentally, he was also the winner of Stephen’s Pull a Guest Out of a Hat Sweepstakes.
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Direct Link: Nassim Taleb on The Colbert Report (May, 2007)
Paul Solman explains “hedge funds” and why “Black Swan” events make it harder than might be expected to reduce investment risk (October, 2006).
“Nassim: The difference between Hedge Funds, and Mutual Funds, is that Mutual Funds take your money and they have a lot of constraints on what they can do for you. A Hedge Fund has usually more freedom, to invest, to make bets, to gamble, to do whatever you want.
Paul: OK lets take it back to 2000, I have a lot of finance professor friends, so of whom would presumably go on my board. People know me on television as a financial somethingerather. Do you think I could have actually started a Hedge Fund?
Nassim: You would have billions under management currently.
Paul: I would have billions??
Nassim: Yes, because all you would had to do was go to university and pickup a couple professors ok, hire a couple risk managers–usually they have a foreign accent, you know they’re quants…
Nassim: Quants, like me, my background is a quant.
Paul: [to the camera] Quants, as in quantitative types, so called financial engineers like Taleb, himself a mathematician, a Hedge Fund owner, and author of a steeply sceptical book on investing called Fooled by Randomness.
Nassim: All you had to do is provide these steady returns, or, the illusion of low-risk returns.”