The Investor’s Manifesto, Black Swans, Poker

I spoke at a conference a couple years ago in London with Taleb.  He was a marvelous speaker, but could his writing be any more pretentious?  Holy sh!t is it unreadable.  Reminds me of the website Unnecessary Quotes.

I counted over forty “instances” where he used quotations in a 5 and a half page article.  (That doesn’t even count the over 90 instances of parentheses!!!)

Common Errors in Interpretating the Ideas of The Black Swan and Associated Papers

There are actually some really good quotes in there – I’m writing a paper on Black Swans, so stay tuned!

“Theories fail most in the tails; some domains are more vulnerable to tail events.”

The point of The Black Swan is that both empirical knowledge (i.e. extrapolating statistics) and a priori theories fail in the tails and it is vital to “robustify” against it using the concepts of “the fourth quadrant”. The point has been garbled by members of the economics establishment that claim mistakenly “we know that” and “we know about fat tails” or “power laws”. This is both wrong and not my point. The paper presents corrections to the misperceptions.


Just got my copy of Bernstein’s new book The Investor’s Manifesto: Preparing for Prosperity, Armageddon, and Everything in Between in the mail.  Bernstein has previously written The Intelligent Asset Allocator and The Four Pillars of Investing.

When asked why he needed to write a third book on the same topic, he responds on his blog:

“When I wrote The Intelligent Asset Allocator, I thought I was producing a volume for the average investor. Turns out I was wrong: the book’s audience was closer to the average electrical engineer. So I tried a little harder and produced The Four Pillars of Investing. Close, but no cigar: still lots of complaints about all the math and graphs.

This time around, the approach is even more down-to-earth. I think that most of my old readers, and perhaps some new ones as well, will find the contents of this work even more readable than the last two.”

He has a free preview of the first 15 or so pages here.  While I haven’t read it yet, and just skimmed it, it looks like more of the same buy and hold and rebal advice?  Not sure how that helps during “Armageddon”…I’ll reserve judgment until I read it…


From the book More Than You Know by Mauboussin:

Any time you make a bet with the best of it, where the odds are in your favor, you have earned something on that bet, whether you actually win or lose that bet.  By the same token, when you make a bet with the worst of it, where the odds are not in your favor, you have lost something, whether you actually win or lose the bet.   -David Slanksy, Theory of Poker