Deep Read: Nassim Taleb (The Black Swan Guy) : Planet Money
npr.org
npr.org
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.
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.
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.
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.
I find your comment to be too much relying on metaphors and not backed up with example or data and without any specifics?
E.g.
One of the recurrent themes in his books is how forecasters fail, and how when they fail they fail by huge margin.
In My experience I have found this ideas to be quite insightful.
Why do you think that his main Thesis about events with large impact and low expectation and their effect on our ability to make predictions is incorrect?
I agree that he himself gets involved in narrative fallacy and that his arguments could be more succinct and sans the Tony and other character that he uses in his book. But Maybe those are there for the hoi polloi and not for people who understand Machine Learning, Search and stuff.
I didn't say that. I said that he's a bad writer, that he argues in flimsy metaphors, and that he tends to make sweeping generalizations based on little more than his own previous metaphors and generalizations. Don't put words in my mouth.
It's axiomatic that low-probability events must occur, given a long enough outlook. What's not axiomatic are the broad, overwrought conclusions that Taleb reaches from this starting place. Reasonable people who grasp the basic tenets of probability theory as well as Taleb can (and do) arrive at drastically different conclusions about US fiscal policy than does Taleb.