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The Forgotten Lessons of 2008
I highly recommend reading this. In this excerpt from his annual letter, investing great Seth Klarman describes 20 lessons from the financial crisis which, he says, “were either never learned or else...
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Cognitive Biases And The Judgment of Global Risks
A great paper that provides and introduction to the following mental models we should all know, understand and apply: Availability Bias, Hindsight Bias, Black Swans, Conjunctive and Disjunctive-Events...
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Redundancy as Insurance
Nassim Taleb summarizes his ideas about how Mother Nature deals with the Black Swan, both positive and negative—it knows much better than humans how to take advantage of positive Black Swans. First,...
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A Few Facts About Small Probabilities
“The earthquake and tsunami we had last week both exceeded our engineering assumptions by a long shot….The nuclear industry around the world probably will have to review how we set those assumptions in...
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Nassim Taleb on Living with Black Swans
Richard Herring interviews Nassim Taleb. This is worth a watch if only for the talk on anti-fragility, which is the subject of Taleb’s new book Antifragile: Things That Gain from Disorder. People talk...
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What is a Black Swan?
In The Black Swan: The Impact of the Highly Improbable, Taleb defined a black swan as “an event with the following three attributes. First, it is an outlier, as it lies outside the realm of regular...
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Black Swans — Tyler Cowen
What would we do if it turned out there were more black swans than we had thought? Tyler Cowen’s talk on Black Swans. Still curious? Check out The Danger of Storytelling. H/T Tyler Cowen
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Black Swan Farming
Paul Graham, the co-founder of the successful tech incubator, Y Combinator, talks about what it’s like to try and find black swans for a living: To succeed in a domain that violates your intuitions,...
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Only Fools Claim To Know The Future
John Kay argues that while only fools claim to know the future we can make good predictions in well-structured situations. Even in these situations, however, predictions are probabilistic at best....
View ArticleThe Six Mistakes Executives Make In Risk Management
Nassim Taleb and his coauthors argue that conventional risk-management textbooks don’t prepare us for the real world. You don’t have to look back far into history to discover this: No model predicted...
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The Probability Distribution of the Future
The best colloquial definition of risk may be the following: “Risk means more things can happen than will happen.” We found it through the inimitable Howard Marks, but it’s a quote from Elroy Dimson of...
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