Deep Read: Nassim Taleb (The Black Swan Guy) : Planet Money

http://www.npr.org/blogs/money/2010/08/18/129276793/deep-read-nassim-taleb-the-black-swan-guy

by joelhaus • 16 years ago

9 8 16 years ago

timr4• 16 years ago

After listening to this, I'm more convinced than ever that Nassim Taleb is the most overrated phenomenon in business/economic literature. His books are vague and trite, and while his arguments touch on currently popular memes (i.e. "debt is bad, because it exposes you to downside risk"), his thoughts go no deeper than the level of analysis you can glean by watching five minutes of CNBC.

It was still interesting to hear this interview, because it's clear that when he's pressed by a moderately intelligent interviewer, Taleb has nothing to fall back on other than repetition of sound bites. By the end of the interview, his logic degenerates into the repeated invocation of a weak metaphor comparing US spending with the Madoff ponzi scheme.

Hopefully this guy's five minutes will be up soon.

idoh• 16 years ago

His style tends to be hyperbolic but he does have interesting things to say. For example how he can't predict the (financial) future with respect to what will happen or when, but he can predict to whom it will happen to.

He makes some reasonable points on debt and leverage. He didn't seem vague to me - reduce debt, prefer equity over debt, build robustness by spare parts or by functional redundancy. That all seems pretty reasonable, specific and not really a view that's advocated by the main stream financial press.

timr4• 16 years ago

His comments may be reasonable (for some value of the word), but you and I have very different definitions of "specific". I can reduce the entire talk to a one sentence summary ("debt is risky; redundancy is less risky."), with little loss of information.

More importantly, nearly everything the man says about debt or deficit spending revolves around a cartoon charicature of statistical reasoning, and boils down to the thesis that debt is always riskier than surplus, because the downside is larger. That's fine, but it's basically just folk wisdom. Even the notion of the "black swan" is just a goofy way of saying what every third-rate insurance agent knows: given a long enough outlook, improbable events are guaranteed to occur. But the important question (the relevant question) is: do you actually care? That's a far more interesting discussion (one that plays a prominent role in everything from insurance contracts to option pricing), but one that eats away at the simplistic appeal of his thesis.

His remarks about "spare parts" and "functional redundancy" are so vague as to be meaningless...sometimes, "spare parts" means cash surplus, but other times, they mean having more than one marketable skill. Maybe he means both. When you speak in glittering generalities like Taleb does, it's easy for other people to project their thoughts on to your words. I suspect that's what makes him so popular.

toddh• 16 years ago

You realize your comment exactly describes your criticism? Any specifics or just vague and trite?

timr4• 16 years ago

Okay, here's a specific: if I wrote my comment the way that Taleb writes books, I'd expand my remark with a bad metaphor, re-state the metaphor ten different ways, and then use those re-statements as proof by example of a broader thesis concerning the decline and fall of English literature.

The man uses ten-dollar words where five-dollar words would suffice, he can't organize an argument to save his life, and his book chapters consist of endless assertions and re-stated assertions of the chapter titles with little further elucidation. Those are but a few of my specific complaints about his writing.

jonshea• 16 years ago

The Black Swan was a black swan.

Deep Read: Nassim Taleb (The Black Swan Guy) : Planet Money

Related Stories