Nassim Taleb / Universa Investments

[iam802]

Have an opinion. But trade the market; not your opinion.

I have been wrong so many times because my opinion is wrong (or shall I say 'ahead of time' ??)

[winston]

Taleb: Government Deficits Could Be the Next 'Black Swan'
In a new edition of The Black Swan, author Nassim Nicholas Taleb warns against depending "on financial assets as a repository of value"
By Ben Steverman

The Black Swan: The Impact of the Highly Improbable is a philosophical treatise on uncertainty that managed both to entertain readers and to predict the financial meltdown of 2008.

Nassim Nicholas Taleb—the book's author, who is also a trader and university professor—has reissued his 2007 best seller in a second edition that includes a new 73-page essay, "On Robustness and Fragility."

Businessweek.com interviewed Taleb in early July about his views on investing and the dangerous Black Swans—i.e. unpredictable events with big consequences—that could lie in wait for financial markets. Edited excerpts from the conversation follow:


http://www.businessweek.com/investor/co ... 530571.htm

[-dol-]

You only heed this guy's warnings once in a blue moon because black swans don't appear that often.

[LenaHuat]

And they can only be found in Australia save for the few given away

[winston]

Nassim "Black Swan" Taleb: Government bonds will collapse
From Bloomberg:

Nassim Nicholas Taleb, who warned that unforeseen events can roil markets in "The Black Swan," said he is "betting on the collapse of government bonds" and that investors should avoid stocks.

"I'm very pessimistic," he said at the Discovery Invest Leadership Summit in Johannesburg today. "By staying in cash or hedging against inflation, you won't regret it in two years."

( When has he been optimistic ? He was pessimistic throughout the whole recovery from the bottom. )

Treasuries have rallied amid speculation the global economic recovery is faltering, driving yields on two-year notes to a record low of 0.4892 percent today. The Federal Reserve yesterday reversed plans to exit from monetary stimulus and decided to keep its bond holdings level to support an economic recovery it described as weaker than anticipated.

The Standard & Poor's 500 Index retreated 16 percent between April 23 and July 2, the biggest slump during the bull market.

The financial system is riskier that it was than before the 2008 crisis that led the U.S. economy to the worst contraction since the Great Depression, Taleb said.

In February, he told a conference in Moscow that "every single human being" should bet U.S. Treasury bonds will decline. It's "a no-brainer" to sell short the debt, he added. Since then, two- and 10-year notes have rallied.

[kennynah]

got so many black swans.... soon, our friend may write a new book to be named as....

grey swans...the superset of black swans

we best be a bit more flexible than these people.... it is nature to obtain a balance; yin and yang, electrons and protons, sun and the moon, men and women, etc...

no need to be so extreme...

[winston]

Taleb Says Unawareness of Deficit Risk Has Him `Extremely Bearish' on U.S.
By Frederic Tomesco

Nassim Nicholas Taleb, author of “The Black Swan,” said he’s concerned budget deficits in the U.S. are spiraling out of control and may now represent a bigger problem than in countries such as Greece.

“The U.S. is probably the worst of all,” Taleb told Canada’s BNN television network in an interview today. “They are addicted to debt. We have an administration that, unlike the European administrations, is not aware of the risks of mounting deficits, of the addiction to public deficits and to big government.”

Taleb told the cable network, “People are complaining about Greece, but Greece has the IMF putting some discipline in their system. Who can discipline the U.S. government?”

Greece this year has imposed a series of austerity measures, including wage and pension cuts and higher sales taxes, in exchange for a 110 billion-euro ($148 billion) rescue from the European Union and International Monetary Fund. U.S. President Barack Obama inherited what the National Bureau of Economic Research said this week was the deepest U.S. recession since the Great Depression. The government’s outstanding debt is about $13.5 trillion, according to Treasury figures.

Risks to the global financial system are much larger than before the September 2008 bankruptcy of Lehman Brothers Holdings Inc., Taleb said.

‘Making Things Worse’

“People still don’t understand why we had the crisis and they don’t realize that we are making things worse,” he said. “We still have the same level of debt but we are transforming private debt into public debt. We are socializing these risks, and the system has fewer people employed. So we have a lot more risks than we did in 2007.”

Taleb, in Montreal today to give a speech to a group of business people, said Canada’s fiscal situation makes the country a safer investment than its southern neighbor.

Taleb wrote the 2007 best-seller “The Black Swan: The Impact of the Highly Improbable,” which argues that history is littered with rare, high-impact events. The black-swan theory stems from the ancient misconception that all swans were white.

As the founder of New York-based Empirica LLC, a hedge-fund firm he ran for six years before closing it in 2004, Taleb built a strategy based on options trading to protect investors from market declines while profiting from rallies. He now advises Universa Investments LP, a Santa Monica, California-based fund that bets on extreme market moves.

http://www.bloomberg.com/news/2010-09-2 ... ngers.html

[kampungboy]

I read NNT's Black Swan (and Fool By Randomness too) the 2nd time and I am very much into his idea. I think the ideas are pretty relevant to the world today. Moving forward, our world will only get more volatile (Extremistan as called in NNT's book) and there will be many more Black Swans. One can be a fool (as humans, we cannot avoid it) sometimes but don't be a fool big time.

[winston]

Dear All,

I have merged the "Black Swan" thread with the "Nassim Taleb" thread.

Take care,
Winston

[iam802]

Nassim Taleb: Don’t Listen to Geithner or Krugman

http://www.ritholtz.com/blog/2010/10/na ... ig+Picture)

Video Link >> http://link.brightcove.com/services/pla ... 1819409001

Since Tim Geithner did not predict the economic crisis, Nassim Taleb has no interest in listening to him talk about it now. The author of The Black Swan, a book about risk and probability theory, told National Journal’s Matthew Cooper that he did not listen to Geithner, who preceded him at the Washington Ideas Forum.

Taleb explained his simple metric for judging whose economic opinions are worth his time: “Did someone predict the crisis before it happened? … If the answer is no, I don’t want to hear what the person says. If the person saw the crisis coming, then I want to hear what they have to say.”

Other unlucky economic figures who failed Taleb’s test included writers Paul Krugman and Thomas Friedman.