YouSaid · the spoken record

Nassim Nicholas Taleb

lines on the record: 127
first: 2023-09-07
most recent: 2023-09-07
sittings or episodes: 1
sources: podcast

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“I'm sure that I don't do as well with Greek as I should, ancient Greek. I can do better with modern, but Latin is easier than Semitic language. But the grammar is more complicated than Aramaic and Latin.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Now, what stands out really is more like someone like Aquinas. So math theology because it was written by one person, whereas the Talmud is a concoction of opinion on opinion. But I like the Talmud only because I had the privilege of understanding Semitic languages. So I'm enjoying it more for linguistic stuff, just for the fun of it. And it's fun to read something and you understand. This is why, plus it is effectively a body of work that's quite monumental, you know, that took centuries to build a collection of scholars talking about scholars and discussing one another over time. This is why I like about acronyms is took a topic and boom put everything in it. All the questions and answers you can have in it. We question themselves. So this is why I'm much more impressed with Aquinas as an individual. I can never imitate Akronus. So I could be as a scholar like one of those who contributed to that Talmud, you know, or one of small contributors, not Talmud, that collected.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“I put something in there. My interest in language, I have interest in ancient languages more than interest in ideas. But poor with languages. So it's not taken me anywhere except exploring text and I'm enjoying stuff so you could have a collection of ancient wisdom in the Talmud embedded in the Talmud. That is very interesting because this monumental work.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“It's because I like Aramaic, which is closer to my native language, which is the Levantine dialect, Aramaic, and then started having interaction on Twitter with people who are Talmudic schol”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“But effectively, the Talmud, which I've been studying for a while, had a lot of things on it. And tell me what it has on it. So, for example, they say Noah was virtuous for his day. Someone pointed out to me in the Talmud, Twitter is very helpful, but I like these ancient texts to see how they would judge their own effectively when an 18th century there are different values than the 15th century. And how did they judge them? And at the same time, people, wise people know that, hey, they did not, it was not part of the customs at the time.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Okay, so in other words, I have so called retrospective bigotier. I have one section is on scalability and one section is on the passage of time, how we don't get time right. And in it, I explain why, for example, it is improper to blame someone past individual, retrospectively, for values we have today where we didn't have then. You see, it's like, for example, Aristotle did not like he was male chauvinist. I'd say, okay, was it is wrong? Yeah, we know now, but he didn't know. You see, he didn't know. It's just like saying, okay, why don't we blame him for not using a computer? Okay, there's no computer at the time. So you got to look at these terms. It should not flow back values backwards.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“I have vigility of meaning. Rigidity of meaning. I learned that from arbitrage reading. I learned a lot of things from trading. An arbitrage trading law of one price. Like if you combine things, they should have the same price here, Singapore or downtown, uptown combination, that you should have no arbitrage. I can't really buy. I used to do arbitrage. I started doing arbitrage an option with this, this convert it to a cross and end up with something cheaper than some other one I would short and then you get it. So it should not have a lot of array price. I say vegetative meaning. Whatever words you use always refers to same thing. That's what my criterion is. By the way, I cite you in my new book.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Verbalism and nonverbalism, because a lot of scientific papers have BS and a lot of casual things don't have BS. So I'm exploring all of these in a volume. I may call it Summa or Principia to give it an arrogant title. or Summa or Principia in Kertorum or something.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“And then finally one idea that also the exposure was structured in it on the main difference between BS and non-BS, what I call verbalism”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Swimming pool versus swimming pool, stuff like that, and also why, in general, a lot of it has to do with scalability. People have the idea that we should have a virtuous individuals to have a virtuous society. Typically, if you force, no, there's a lot of greedy individuals can build a virtual society. That's the Adam Smith argument or one malbranche. So the idea of scalability, for example, is the most misunderstood thing, like a town is not a small village. I started the topic in anti-fragile, but how things scale differently. So a town is not a large village, a country is not the same as a municipality. And why, for example, you could be libertarian at the national level and autocratic at the municipal level. You see, our communists in the kibbutz, but libertarian at the state level, you could have a lot of these gradations, so things are more complicated. Among these things, I demand”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Two things the technical insert of second volume, which is all the scientific papers around these points. And I'm working now on a book that is pretty much like structured, like an ancient Roman Latin treatise, language treatis with questions and stuff like that. And it's liberating to be able to write without having the narrative just point blank. And in it, I cover all these points. Question, what is convexity? And I've decided to do all of that in one book. And it's going to be called Principia. For example, why the risk of an individual getting this doesn't translate into collective risk in the same way?”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“I think fool by randomness is the one that people like The most the blacks wanted what they slight the most an antifragile is the one they misuse the most Just use, yeah, because the virus, you get stronger, what doesn't kill you makes you stronger. I know, but what kills you doesn't make you stronger. I mean, they're not getting it right. The first thing to be fragile, to be anti-fragile, is first you have to eliminate fragilities. That's the first rule. You tell the risk, you don't open it up. So I don't know. But I would say fool by randomness is a good start. Or if you're a lawyer's kind of the game, I have no idea because I'm not thinking in terms of my past books. I'm thinking about the book I'm writing now.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Unless you're a trader, don't trade. Unless you're a baker, don't bake, unless you're a dynamite maker, don't make dynamite and stuff like that, it's elementary.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Have a bakery focus on baking and use your money to preserve. That's not your business. So this is where you tell the pop and mom, you don't tell them how to do universal trade. You tell them.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“My answer is an ordinary person. should focus on her or his business, and dentist should focus on dentistry, not trading gold. My experience, you see people whose business is not the finance, and they think that they've got to make money out of the checking account. So what happens is they have so much scrutiny by their own business. Say they run a bakery, they know the suppliers, this guy pays, this guy, they know all the risks, and then they blindly put their money into something they have no idea what's going on. So this is where the sucker, you know what I'm saying, is domain dependent, that some people are skeptical in one area, but don't transfer to stock market. It's the same thing. So there's something about the stock market, particularly with the weakness of religion, that makes people believe in stories of returns, but not believe in theological arguments that we've had for 2,000 years. So it's the same thing. So I tell people, listen, what do you do?”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Companies that have studied income are short an option somewhere. So it's not trading options that will help you is looking at optionality in business and in places who will short that optionality. You can have two funds. They won't have the same return. One fund can have a lot of short options and one fund can be robust. You won't be able from the outside and security analysts have no idea.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Skip that because they're going to sell options. But I would say they used to say nine tenths of option players will be sellers, I think nine nine out of 100. It's so appealing because someone's going to give them the story. The sell option have steady income. There's nothing people like more than steady income. And the reason Mark is in business because he's the only person I know who doesn't care about the psychological prof having steady income because everybody else will have to study income. They would debase the trade to have a steady income. And sure enough, you get studying income by selling the tails. And that is generalized. To give an idea, companies that have study income are shorten option somewhere.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Like when I wrote anti-fragile, I was writing between 2009 and 2012. Nobody believed in Harriet very well. You see, and they thought you needed steady heart rate. It's a predictor of death. So it's the same thing for a lot of things where you have, that's a convexity effect. So that's sort of what I'm focusing on now, is these convex responses, convex stuff applied to fields where they need to be applied, like medicine. MST with nutrition. But nutrition figured out early on intermittent fasting. Why it's a convexity thing instead of having a dose throughout the day, you have it and it's a different response, but there is a limit. You'd rather have your calories, a concentration limit. You have your calories once a day is okay, once a week, not so sure. You see? So there is an optimum thing. It's the same thing can be generalized to other things. This is what I'm working on. And it's taken me a while. All that comes from Optional.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“The person may die. But if that person 80%, 120%, they have much higher survival rate. Why? Because they like volatility.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“No, no, the eggs. The eggs was 2002, 2001, 2002. And since then, I had some 80 scientific papers. So, my enemies, they don't handle it because you can't say it's not science. So anyway, so I think the central thing for me is convexity, and it led me into papers on oncology and medicine. Because again, oncologists know stuff, doctors know stuff, the language they use did not accommodate this notion of convexity 10 times one, the nonlinearity. They sort of suspected it, but it was not formalized. So it just published something in oncology. We did a lot of stuff in epidemiology on tails, so convexity on tails. And convexity is the most important. For example, people don't realize that convexity means you like volatility. Concavity, you don't. Where you're convex. And people miss the point that was already mentioned in a paper I wrote before COVID on citing sources for lung ventilators. If you give someone a dose of 100%”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Convexity is the center of things. So I started writing on convexity or studying convexity. You know, between the time we had the...”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“But think about it this finally will get waiters because we have shortage of waiters. We finally will get weight. I mean, you go to restaurants and they have one waiter for the whole room. And they said, we get more waiters, we get more.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Had episodes of that effect, but now it's ingrained and people had now for 15 years of low interest rates. You have people in their 40s who have never seen interest rates and they don't know how to behave. They know how to invest. So I think the most fragile part today is not the banks, of course, as we said. And it's not hedge fund because it's sort of like mature adults typically. It is those startups. And he's an ventral catalyst. Ventural catalyst actually played quite a nasty game because they cashed out. All of them are rich. Company never made a penny. I know a lot of it, Dick. How many billionaires you have in Silicon from Silicon Valley, all right? Whoever made a pen Valuation maybe, as”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Exactly. Startups or a lot of investments you buy an apartment, you buy a house, you buy a building, you buy something, or you invest in some crazy idea. And someone was contacting me about L&M models, you know, ChatGPT, by saying, oh, we have this startup investing this startup and looked at the rationale. And then he said, yeah, I'd be able to sell it in within two years. I said, listen, this is a trap. So companies, say even Twitter, was operating on a following modus. We go to the market as a cash machine. So you have to generate cash. So basically everything came from, it has Ponzi characteristics. Someone else will buy our company or we're packaging a company to sell it to someone else. Now, that started before the great financial crisis, but was very moderate. Of course, it took place during the crazy period of the internet bubble and then died.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Hedge funds are okay, but we have had the risky part, the ones that are most fragile, the private equity. And of course, by far, people who need funding, because, and I don't know if you realize, but we had, since we had our three bottles of pink champagne, it was like four bottles, whatever, a lot of pink champagne to celebrate Lehman's departure from his town. Since then, we put interest rate at close to zero. So when I was a student, and for me, an investment was something that generates cash flow. So you build something that generates cash flow. So you value cash flow and order residual value at the end. So you can tolerate negative cash flow if you're going to get some later on. So it's like us if you discover gold later on. So the business model was cash flow based with a short-term or long-term cash flow. The world has changed, all right, in the funding world. What is the game now? Is who you're going to sell your company to?”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“So if you can't recover, the skin in the game is falling effective. There's a reason you don't see crazy drive too many crazy drivers is because they're dead. Because you inflict risk on others, but you experience the same risk. So you tend to exit the”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“No, no, it is people, the skin of the game is a disincentive, of course, but it also skin of the game is a filter. So where are the people is anybody from locked up capital management still around?”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“In other words, he has a friend who has a big funds. In other words, the owner of the hedge fund has money in it, unlike a bank where you just have the upside, not the downside.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Many things. Again, all these things are saving the financial system bankwise have spillover effects, but they're going to save the bank system because you cannot operate without it. Plus, another thing has happened is that banks used to take a lot of risk. Since 2008, risk has migrated from banks to hedge funds. Now it's less concentrated, but it still can be concentrated.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“See, one reactor is vastly more dangerous than 10 small ones, and the 10 small ones are not like this blow up at the same time. I don't know if one reacted, what's the factor, what's the multiplier, but they are nonlinearities. But definitely when you have a lot of small ones, it can blow up at different times. One thing about our previous conversation when you say the banking sector, the banking sector is very safe for one reason. It's a utility with high paid bankers living around here. You see, have big Soho lofts, $10 million Soho lofts basically utility because they don't let it go under it's not the one you got to worry about it's the saving it again that you have to worry about the effect of saving it like we saved it in 2008 was what government debt and exploded and then again in 2020 there was so much commercial paper”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Radiation in Chernobyl. I knew that when I was writing the Black Swan, I didn't talk about it because I know it was dicey, was lower than that in Utah. It's not the point. It's Chernobyl is too big. If you make small reactors, let them blow up. So what happened if because of convexity?”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Missiles in Germany and they infiltrated Putin knows something about it when he was in Germany. They infiltrated all these green movements by directing the Greens against nuclear, for example. So I truly think that we're suffering a lot from this disinformation up today when people worry about some risks not others.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“All traditional societies or traditional communities like Italy would resist GMOs and although people online may say, hey, this is anti-scientific, they know science is not about that, for example. So it depends on which domain. There are some domains, some people are good at some domain, not others. Like Russia is very good at some classes of risk, but not visibly at others. It depends on countries. Like Italy got paranoid about nuclear. There's one attribute of our environment that we should realize is the non-trivial effect of propaganda on the mind of people, particularly when it's well organized. The KGB was not very good at spying. We discovered, but was very good at disinformation. So everybody panicked about the nuclear because they didn't want Reagan to put”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“The Singaporean government didn't fare very well with COVID as much as they did before, I think maybe because my friend was gone or something, but they knew they said, okay, what can go wrong and let's reverse engineer our hedge, the reverse of what you think, and build things in a way to stand that kind of shock.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“One comment I would like to make about the regulators, like European regulators, they're great at being regulators. Now, there's a regulator for pleasure. And if you put 200,000 people in Brussels, of course they have great fresh fries and beef tallow and whatever, duck fat, whatever. But at the same time, what comes with it is these people are going to regulate you out of existence on things that are trivial. They like to do the trivial because it's easier to sell. So they regulate vacuum cleaners how much energy should be or the speed of your windshield wiper on a farm tractor if it has a windshield, that kind of thing, but they can't control the waters. And they didn't think of COVID. Of all the people we spoke to, because a lot of people tried to talk to me about risk thinking that, you know, we should talk to someone like me about risk. And usually I get upset because the next black swan.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“I say, prediction, not self fulfilling and also self-canceling. Early on, self-fulfilling, people get on a bandwagon and sure enough, that's sort of the glut takes place after the shortage. But one thing that's quite, what should realize with the structure of the world in which we live, that although history is not an indicator for many things because we live in times of different connectivity and stuff like that, the rules of what can go wrong are very simple. It's like as with pandemics, the Ottomans and the Austrians figured it out or Lazaretos, okay, simple, right? Venetians were expert at it. The rules are very simple. There are not that many of them. When we talk about precautionary principle, a lot of people have the illusion that it multiplies into billions of regulations. No.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Ten times in a shipping container. And you're going to have a lot of the reverse happening because I've never seen shortages without. I've seen gluts without shortages, but never shortages without, but they're very deep. We don't have that before. We all depend on the world's getting bigger and bigger and bigger, but it's like a large movie theater with the same door. It's the size of the door that matters when you want to get out, not the size of a theater. So the supply chain is narrow and get narrower and it's gotten narrower. Now probably it will expand and branch out and will have a better networks. But people would not understand that. This is why people like to sell tale events because it costs money to diversify your sources of whatever and your supply and it also cost money to hedge tailor risk or you think it costs money. You have the illusion and sure enough you realize that if a hedge is expensive think of absence of hedge.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“We have noticed very early on in the 90s a phenomena that international diversification was no longer diversification. Why? Because of that integration. Globalization did a lot of good things, pulled people out of poverty. But a lot of things happened with it. Number one, you can't diversify anymore because if stocks collapse here, as we saw in 87 collapse everywhere for large deviation and now for mild deviation starting in the 1990s. And also, I mean, the funding disappears everywhere or comes everywhere. So this property of globalization is similar to the one that came with it that we were going to have shortages. Then gluts. Now in a phase of in-between shortage and glut. But shortages can be very different.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Selling out of money tails selling rare events, and you don't need a large deviation, just people panic, they pay anything, or sometimes they're forced to because the clearinghouses or commercial parties cannot handle the risk. They close you out, sorry, and you close out. There's no liquidity. It's like the famous saying, sell everything. And then the clerk, I told you sell everything. Why are you not moving? Tell me whom, sir. Let's see.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, but they're even more dramatic than $2 becoming $60 because we always look at how people have lost money because when you read reports and stories, they hide the losses because nobody's going to write a book on how they lost all this money. And it's always invariably the same. There was a story of volume investors, I think. They're selling out of the money options on gold. And they're selling for five cents and end up having to buy them for $40. And then there's Niederhofer story, same story, where liquidated and when he blew up, I mean, he blew up many times. But one time, you can see the prices. He sold them for $5, 10 cents. And then he had to buy him back, and I was buying him back to $40. This is what I noticed.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“At the end of DPNL. You see, so every time there's a go redo it and stuff like that. And I was frustrated because they couldn't understand it. They couldn't understand it. But this is the same thing happened tomorrow.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“No, no, they said you made too much money. You got to be taking risk. You're hiding something from us. And the computers would take something like 10 hours at a time to compute the P&L.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“I discovered it Before the crisis of 1987, there was a plaza accord where a bunch of people got together secretly on a Sunday and then made an announcement. We're going to support the currencies against the dollars. The dollar is too expensive. You had a huge move. I was at work. We had a tiny risk to an explosion of my P&L. They brought detectives or inspectors to figure out why the P&L is so large for so little risk. Because you had maximum risk, all you could lose is, say, X thousand dollars and the PNL exploded. That's how it works. They couldn't believe it, right? I decided okay, I'm going to make a living. Now,”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“So, the return you have on that maximum possible potential loss. In other words, when you go to bed in the evening, all you could lose is that much and how much these options were explosive on their maximum loss, right? So that was the asymmetric. That was asymmetry is 4,000, some percent, but that's not the first time happened. Nobody noticed. When I was trading,”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Look at the risk of Fanny and notice that if the markets say an interest rate or mortgage premium or something like that, this increased by 100 basis points, they lost X. 200 basis points, 20 times X. 300 basis points, I said they're sitting on a barrel of dynamite in the black swan. 2007, five months later, they started going on and eventually they lost, they booked $600 billion losses. Why they said, oh, they reacted to me by saying, oh, we monitor our risk. We have 15 PhDs. Okay, 15 PhDs, 15 trillion PhDs. It's not going to help you with this. So this is convexity on the losses and we're doing the reverse. On the prophet side, and there have been some a lot of people got upset the way Mark presents the numbers that he writes.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Okay, so, and again, we're going to talk about Universa or other things embedded in a universal story, but that the convexity is if the market goes down 10%, you make a million dollars. If it goes down 20%, you make $10 million, you have convexity. And this is what everything is based on. Well, the general convex. And concave. And probably the best illustration is how we fared in 2007 and I explained it in the black swan, right? Before it happened. I looked at the risk of Fannie Mae. By deserter who left Fannie Mae and distributed risk reports.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“It's red more in 2023 than it was in 2013, the second year publication. So same with Black Swan. Black Swan is read more now than it was a year after publication. But in spite of all of these arguments being presented, people couldn't grasp our paper and discovered why. Something I figured out only recently, when I talked to young people of 23, 24, They know exactly what I'm talking about. Their parents are the problem.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Exactly. So let me give you an example to go back to before when we were talking about when I used GMO versus selective breeding, tell you why speed and fragility. An example I use in an anti-fragile. If I bang a car against a wall at one mile per hour, Hundred times, okay, it's not going to be the risk of your bank at once at 100 miles per hour. Okay, so this is where if you have acceleration of harm, like if I jump 10 feet, I'm harmed more than twice than if I jump 5 feet. So we showed in the presence of acceleration what to do. And that part of the paper was never understood because people don't understand convexity. Although anti-fragile is currently my most successful book.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“We put that in a precautionary principle, the nonlinearity, the convexity, that's the theme of anti-frauderal, the convexity.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT
“Interest in complicating the story. In fact, you just say, okay, let's forget about fossil fuels, let's pollute with other things. Just like I say, if a drug is dangerous.”
2023-09-07 · The Tim Ferriss Show · #691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More · IDENTIFIED FROM THE TRANSCRIPT