Bloomberg Talks Nassim Taleb, Scott Patterson Talk 'Chaos Kings' Book
Sep 27, 2024
Nassim Nicholas Taleb, a renowned author and Senior Scientific Advisor at Universa Investments, teams up with Scott Patterson, a best-selling author and Wall Street Journal reporter. They delve into the unpredictable nature of financial markets, drawing lessons from the pandemic and emphasizing the importance of risk management. Taleb highlights the dangers of overconfidence in forecasts and the need for profound understanding of position sizing in investments. The conversation also touches on economic complacency and resilience amid global uncertainties.
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Market Predictions: Black Swans vs. Dragon Kings
- Nassim Taleb believes markets can't be predicted, so we must prepare for extreme, unpredictable events called black swans.
- Scott Patterson contrasts this with Didier Sornet's dragon kings theory, which tries to predict crises using advanced physics.
Invest with Tail Hedging
- Investing without a tail hedge is practically not investing because of the ruin problem.
- People often underestimate tail risks due to static thinking and short, faulty memory updating.
Uncertainty in China's Economic Data
- China's economic statistics are uncertain and unpredictable, as they alternately hit slowdowns and then stimulate growth.
- China led global recovery post-2008 crisis via stimulus but sustaining this remains uncertain.