Nassim Taleb / Universa Investments

Re: Nassim Taleb

Postby winston » Fri Feb 12, 2010 10:33 pm

Taleb: Buffett May Be More About Luck Than Skill By: Dan Weil

Investment guru Nassim Taleb apparently isn’t too impressed with the world’s second richest man, Warren Buffett.

“I don’t want to spend too much time on Buffett,” the hedge fund adviser told online magazine ai5000.

“George Soros has 2 million times more statistical evidence that his results are not chance than Buffett does. Soros is vastly more robust. I am not saying Buffett doesn’t have skill. I’m just saying we don’t have enough evidence to say Buffett isn’t doing it by chance."

Taleb made himself famous with the book “The Black Swan: The Impact of the Highly Improbable,” which came out in 2007 before the subprime mortgage crisis.

Buffett has made himself famous by providing Berkshire Hathaway shareholders with above-market returns for more than 40 years.

The Oracle of Omaha has received some criticism for recent moves, such as purchasing Burlington Northern Santa Fe railroad.

But Buffett biographer Alice Schroeder says there is logic behind that acquisition.

“This deal is mostly about managing risk,” she wrote on Bloomberg.

“One of the many motives is to soak up Berkshire’s capital while Buffett is at the wheel. That lowers the danger of his successor doing something dumb.”

Buffett has stated that he wants to ensure Berkshire’s survival for another generation beyond his death.

“Buffett likes companies that make bricks and boots and paint and electric utilities because they are survivors. So are railroads,” Schroeder wrote.

http://moneynews.com/StreetTalk/Nassim- ... /id/349637
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Re: Nassim Taleb

Postby -dol- » Sat Feb 13, 2010 10:02 am

If so, I would not complain about such luck :)

What's the point of skills without the results?
It's not the bottom if you are not crying.

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Re: Nassim Taleb

Postby winston » Tue May 11, 2010 6:47 am

Taleb: Piling On More Debt Won't End Global Crisis By: Forrest Jones

The only way for the world to say goodbye to the credit crisis is for governments to lower their debt levels, says New York University Professor and author Nassim Taleb.

“The crisis came from debt and you don’t escape it with more debt,” Taleb says.

“We’re in a situation where we had a patient who we discovered had cancer a year and a half ago and all we’ve been giving the patient is painkillers. The tumor is getting worse because we are transforming private debt into public debt and public debt is not manageable.”

The Obama administration should work to convert its massive public debt into equity or else generations will end up paying for it, Taleb told Bloomberg.

“That’s immoral,” Taleb says.

The United States and countries in Europe — Greece especially — have run up their debts to the point they have fueled a global debt crisis.

Greece, which has run a fiscal deficit of over 12 percent, well above the European Union limit of 3 percent, is working with the International Monetary Fund and other countries to craft a plan out of its crisis.

Greece’s debt woes have sparked fears that its problems could pummel other economies around the world, worrying even U.S. President Barack Obama.

“I am very concerned about what's happening in Europe,” Obama told Russia's Channel Rossiya, according to the AFP newswire.

“But I think it is an issue that the Europeans recognize is very serious.”

“If we can stabilize Europe that will be good for the United States,” says Obama.

http://www.moneynews.com/StreetTalk/Nas ... /id/358549
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Re: Nassim Taleb

Postby millionairemind » Thu May 20, 2010 7:59 pm

Professor tells investors to sell shares and bonds
The New York University professor, Nassim Taleb, who made his name predicting the credit crunch, has told investors to dump equities and government bonds and buy 'hard assets'.

By James Phillips, citywire.co.uk
Published: 10:55PM BST 18 May 2010


The New York University professor, Nassim Taleb, who made his name predicting the credit crunch, has told investors to dump equities and government bonds and buy 'hard assets'.

He has poured scorn on the economic recovery, claiming that the global economy is in worse shape than it was during the subprime crisis and warns that the US could yet lurch into a Greek-style meltdown.
In an interview with Bloomberg TV, Taleb said the fragility in the banking system that he spotted in 2007 is still there and the bail-out of the financial sector has encouraged bankers to continue their 'casino' operations by increasing moral hazard.

"Look at all of the money they made with our backing- it is like they spat in our faces," he said.

His main concern is that the transferal of debt from the private to the public sector has seen the risks within the financial system increase and 'take a much more vicious form.'

Western governments have been issuing record levels of debt to keep the recovery afloat, but Taleb says that it is inevitable that at some point they will struggle to find buyers of these assets.

"It is clearer than ever that we are going to have a failed auction [of government bonds here in the US that will cause contagion," he said. "There will not be enough buyers of Treasuries and the government will have to print money and before you know it you wake up with hyperinflation without having had any inflation."

So how should investors position their portfolios for such a doomsday scenario? Taleb, who made millions betting against financials during the credit crunch, recommends investors dump long-term government bonds and only hold short-dated debt. He also warns against viewing the dollar as a hedge against the ailing euro, pointing out that both currencies face the same underlying problems.

He dismisses the stockmarket, which would be expected to perform badly in a period of hyperinflation, completely,

"I recommend not thinking about the stockmarket," he said. "It is a big hoax that has disappointed people over the last decade making their retirement plans, thinking it would appreciate."

"Use it as something to play with for entertainment and nothing more."

He favours moving into hard assets and advises investors to build exposure to a basket of metals rather than try and second guess which individual hard commodity will outperform. He also likes agricultural land, but said avoid 'speculative real estate'.

Taleb is certainly a controversial figure in investment circles, but he is always intriguing and even if you do not agree with his outlook, he is difficult to ignore.

The managers of the top-performing Schroder Income fund are to leave the group and move to investment boutique RWC Partners.

Under the stewardship of Ian Lance and Nick Purves, the fund became a firm favourite with investors and has grown into a £1.5 billion giant.

It is easy to see why. The fund is one of only two to have delivered a positive total return over the last three years in the 89-strong UK equity income sector and has consistently topped the charts.

The pair will be replaced by Nick Kirrage and Kevin Murphy, who will run the portfolio alongside the Schroder Recovery fund, which they have co-managed since 2006.

Like Lance and Purves, the new team also sit within the fund house's specialist value team, which will provide a continuity of approach that is leading financial advisers to recommend sticking with the fund.

"Lance and Purves have a very good track record but they are part of a bigger team," says Hilary Brown, investment strategist at Alexander Forbes. "It is a loss, but we are not too worried because Schroders has enough depth to cope and the incoming managers will be using the same investment process and investment philosophy."

Underlining this point, the Schroder Recovery fund has 80pc commonality of holdings with Schroder Income, suggesting the incoming pair will make smaller than wholesale changes to the underlying portfolio.
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Re: Nassim Taleb

Postby winston » Fri Jun 11, 2010 7:09 am

Black Swan appearing ! Financial System collapsing ! Oops .... Dow up 273 :(


Debt Spreading 'Like a Cancer': Black Swan Author By: Barbara Stcherbatcheff

The economic situation today is drastically worse than a couple years ago, and the euro is doomed as a concept, Nassim Taleb, professor and author of the bestselling book "The Black Swan," told CNBC on Thursday.

"We had less debt cumulatively (two years ago), and more people employed. Today, we have more risk in the system, and a smaller tax base," Taleb said.

"Banks balance sheets are just as bad as they were" two years ago when the crisis began and "the quality of the risks hasn't improved," he added.

The root of the crisis over the past couple of years wasn't recession, but debt, which has spread "like a cancer," according to Taleb, who is now relived that public attention has shifted to debt, instead of growth.

The world needs to prepare itself for austerity, he warned. "We need to slash debt. Unfortunately, that's the only solution," Taleb said.

Other analysts warned about austerity programs spreading from the euro zone to the US where the growth in debt will become unsustainable over the longer term.

Obama administration's efforts to pull the US out of recession haven't succeeded, according to Taleb. "It's not that they make mistakes, it's that they almost get nothing right." Moreover, a second major stimulus package may be futile, he warned.

"Obama promised us 8 percent unemployment through stimulus. It hasn't worked." There are significantly more liabilities in the US than in other countries around the world, he said.

"Don't give a junkie more drugs, don't give a debt junkie more debt."

* Watch the first section of the Nassim Taleb interview above and the second section here >>>

Hedge Against Inflation

Investors should avoid Treasurys and other bonds and place their money in instruments that will hedge them against looming inflation.

Commodities are one place where a bull market may form over the coming years, as people try to protect their cash from price rises, famous investor Jim Rogers told CNBC earlier Thursday.

The "Black Swan" metaphor is used to describe those rare, unexpected but consequential events that people cannot predict because they view the world through a sort of tunnel vision - as something structured, ordinary, and comprehensible.

"I want to live in a society that is robust to adverse events. We don't live in that world," Taleb said.

"A bridge that's very poorly constructed will eventually break. A white swan for the butcher is a black swan for the turkey," he added. The "Black Swan" reference has become ubiquitous within popular and business culture over the past couple of years.

As recently as Wednesday, a top authority on oil reservoir management and upstream technology called the BP [BP-LN 365.50 -26.05 (-6.65%)] oil spill in the Gulf of Mexico a "Black Swan" event that, however catastrophic, has the potential to improve drilling practices in particular and the industry in general.

Taleb expressed reservations about the future of BP, given the catastrophic fall in its market capitalization since the oil spill on April 20th.

He suggested that incentives in corporate culture are inherently flawed.

"Size is bad for companies," he said. "We shouldn't give a manager of a nuclear plant an incentive bonus. People are given bonuses to hide risk, to cut corners. The same thing happens with every large corporation. It permeates the entire economic system."


http://www.cnbc.com/id/37610064
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Re: Nassim Taleb

Postby winston » Fri Jun 11, 2010 7:21 am

Hmm.... got to be also careful in case there are big fans of Nassem Taleb in the forum. Dont want to offend anybody ..

Saw this guy on CNBC a couple of times. Whenever, he appears now, I switch channel. Same with Roubini ...

Forgot to mention that the reason for the Black Swan is because it was covered in the oil from BP :P
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Re: Nassim Taleb

Postby millionairemind » Fri Jun 11, 2010 8:29 am

winston wrote:
Forgot to mention that the reason for the Black Swan is because it was covered in the oil from BP :P

:mrgreen: :mrgreen: :mrgreen: :mrgreen:
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Re: Nassim Taleb

Postby Musicwhiz » Fri Jun 11, 2010 9:05 am

winston wrote:Forgot to mention that the reason for the Black Swan is because it was covered in the oil from BP :P


Then Nassim is good, cos he wrote the book way before the BP oil spill. Superb predictive powers! :P
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Re: Nassim Taleb

Postby kennynah » Fri Jun 11, 2010 7:54 pm

winston wrote:Hmm.... got to be also careful in case there are big fans of Nassem Taleb in the forum. Dont want to offend anybody ..Saw this guy on CNBC a couple of times. Whenever, he appears now, I switch channel. Same with Roubini ...


W : i wonder why you have a disliking for these fellas?
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Re: Nassim Taleb

Postby winston » Fri Jun 11, 2010 8:05 pm

Ha Ha .. I dont know. Maybe he's too opinionated. Maybe because he has been wrong since Apr 2009 ...

Some people thinks that markets move because of economic factors. Some people think it's because of liquidity. Some people think it's because of sentiment etc ..

With so many factors affecting the market, how sure are we that our opinion is correct ? So why be so opinionated ?
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