What is nassim Taleb saying?

Nassim Taleb Quotes “We should reward people, not ridicule them, for thinking the impossible.” “Injecting some confusion stabilizes the system.” “This is the central illusion in life: that randomness is a risk, that it is a bad thing.” “Much of modern life is preventable chronic stress injury.”

What does Nassim Taleb mean by convexity?

Convexity refers to the shape of the curve in Figure 1. A convex curve bends away from the origin, the point where the x and y axes cross. A curve that bends the other way is concave. Things that are convex benefit from uncertainty, while things that are concave are hurt by it.

Why is nassim Taleb famous?

Taleb has been a practitioner of mathematical finance, a hedge fund manager, and a derivatives trader. He was a pioneer of tail risk hedging (now sometimes called “black swan protection”), which is intended to mitigate investors’ exposure to extreme market moves.

What does Black Swan mean?

A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, severe impact, and the widespread insistence they were obvious in hindsight.

What are fat tails Taleb?

The statistical term ‘fat tails’ refers to probability distributions with relatively high probability of extreme outcomes. A summary article by Nassim Taleb reminds practitioners that fat tails typically invalidate methods and conventions applied in quantitative finance.

What does a convex look like?

A convex shape is the opposite of a concave shape. It curves outward, and its middle is thicker than its edges. If you take a football or a rugby ball and place it as if you’re about to kick it, you’ll see that it has a convex shape—its ends are pointy, and it has a thick middle.

What is a convex relationship?

Convexity is a measure of the curvature in the relationship between bond prices and bond yields. Convexity demonstrates how the duration of a bond changes as the interest rate changes. If a bond’s duration rises and yields fall, the bond is said to have positive convexity.

How did Nicholas Nassim Taleb make his money?

In the 1980s Nassim Taleb worked as an options market maker. That means he made most of his money by supporting customer flow. He sold options for slightly higher prices than he bought them, and counted on the orders evening out so he had little net position. Nassim was holding enough of these puts to make $35 million.

Is Nassim Nicholas Taleb a philosopher?

Nassim Nicholas Taleb can be hard to pin down. The trader turned mathematician turned philosopher loves all things volatile. His “black swan” concept helped explain – and some say, predict – the 2008 financial crisis.

Is Fatou Korean?

Fatou (파투) is a Senegalese singer and rapper and a member of South Korean girl group Black Swan under DR Music. Fatou Facts: – She was born in Yoff, Senegal, but grew up in Tienen/Tirlemont, Belgium.

Why do people have fat tails?

By definition, a fat tail is a probability distribution which predicts movements of three or more standard deviations more frequently than a normal distribution. Even before the financial crisis, periods of financial stress had resulted in market conditions represented by fatter tails.