Download or read book Oil electricity and Taleb s Black Swan written by Ullrich Müller and published by GRIN Verlag. This book was released on 2012-11-26 with total page 63 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2012 in the subject Business economics - Business Management, Corporate Governance, grade: excellent, Corvinus University Budapest (School of Management), language: English, abstract: The paper is the result of the attempt to subject the socio-economic world of energy to an analysis regarding a phenomenon called the ‘Black Swan’. This concept has been made popular by Nassim Nicholas Taleb, who has become a popular point of reference ever since the beginning of the financial crisis in 2007. Based on his work, the paper first defines the concept of the ‘Black Swan’ as an extremely unlikely high impact event, which is evidently unpredictable ex ante; however, is regarded as potentially avoidable by most observers ex post facto. The underlying assumption is, that against commonly held believe, it is not a long chain of incremental and statistically relevantly many events that makes history, but a seemingly insignificant number of outliers, or hence, ‘Black Swans’. Consequently, in its second part the paper focuses on a critical examination of the strategic prediction models used in the energy business today, which are mainly based on driver based models. Relying on Gaussian Bell Curve type normal distributions in order to predict future supply and demand, these models try to predict future price and value chain developments, ultimately searching for a strategic direction. Using historic data and experiences in order to review to what extent the ‘Black Swan’ influenced the development of the energy world in the past, the paper questions this approach by showing that time and again similar predictions have been rendered obsolete by real developments. In order to apply the necessary methodological rigor, ‘Black Swans’ and their impact are measured according to predefined criteria and indicators, elaborated in the first part of the paper. These indicators are mainly qualitative, however, as an empirical anchor the paper uses the historical development of the oil price, focusing on peaks and lows. The most striking historical cases of sudden price rise or decline are examined in detail in order to find commonalities and differences. Finally, based on the findings of this historical analysis, the paper raises the question, whether it is possible to draw any practical conclusions for the future, looking for methods, which could provide protection from ‘Black Swan’ events.
Download or read book Black Gold Black Swans The importance of the unexpected for the future of energy written by Ullrich Müller and published by Anchor Academic Publishing (aap_verlag). This book was released on 2013-12-17 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt: The present study is the result of the attempt to subject the socio-economic world of energy to an analysis regarding a phenomenon called the ‘Black Swan’. This concept has been made popular by Nassim Nicholas Taleb, who has become a widely cited point of reference ever since the beginning of the financial crisis in 2007. The underlying assumption is, that against commonly held believe, it is not a long chain of incremental and statistically relevant events that constitutes history, but a seemingly insignificant number of outliers, or hence, ‘Black Swans’. Consequently, the study focuses on a critical examination of the strategic prediction models used in the energy business today, which are mainly based on driver based models. These models try to predict future price and value chain developments, ultimately searching for a strategic direction. This study questions this approach by showing that time and again similar predictions have been rendered obsolete by real developments. Based on the findings of this historical analysis, the study raises the question, whether it is possible to draw any practical conclusions for the future, discussing methods, which could provide protection from ‘Black Swan’ events.
Download or read book Skin in the Game written by Nassim Nicholas Taleb and published by Random House. This book was released on 2018-02-27 with total page 305 pages. Available in PDF, EPUB and Kindle. Book excerpt: #1 NEW YORK TIMES BESTSELLER • A bold work from the author of The Black Swan that challenges many of our long-held beliefs about risk and reward, politics and religion, finance and personal responsibility In his most provocative and practical book yet, one of the foremost thinkers of our time redefines what it means to understand the world, succeed in a profession, contribute to a fair and just society, detect nonsense, and influence others. Citing examples ranging from Hammurabi to Seneca, Antaeus the Giant to Donald Trump, Nassim Nicholas Taleb shows how the willingness to accept one’s own risks is an essential attribute of heroes, saints, and flourishing people in all walks of life. As always both accessible and iconoclastic, Taleb challenges long-held beliefs about the values of those who spearhead military interventions, make financial investments, and propagate religious faiths. Among his insights: • For social justice, focus on symmetry and risk sharing. You cannot make profits and transfer the risks to others, as bankers and large corporations do. You cannot get rich without owning your own risk and paying for your own losses. Forcing skin in the game corrects this asymmetry better than thousands of laws and regulations. • Ethical rules aren’t universal. You’re part of a group larger than you, but it’s still smaller than humanity in general. • Minorities, not majorities, run the world. The world is not run by consensus but by stubborn minorities imposing their tastes and ethics on others. • You can be an intellectual yet still be an idiot. “Educated philistines” have been wrong on everything from Stalinism to Iraq to low-carb diets. • Beware of complicated solutions (that someone was paid to find). A simple barbell can build muscle better than expensive new machines. • True religion is commitment, not just faith. How much you believe in something is manifested only by what you’re willing to risk for it. The phrase “skin in the game” is one we have often heard but rarely stopped to truly dissect. It is the backbone of risk management, but it’s also an astonishingly rich worldview that, as Taleb shows in this book, applies to all aspects of our lives. As Taleb says, “The symmetry of skin in the game is a simple rule that’s necessary for fairness and justice, and the ultimate BS-buster,” and “Never trust anyone who doesn’t have skin in the game. Without it, fools and crooks will benefit, and their mistakes will never come back to haunt them.”
Download or read book Antifragile written by Nassim Nicholas Taleb and published by Random House. This book was released on 2012-11-27 with total page 545 pages. Available in PDF, EPUB and Kindle. Book excerpt: Antifragile is a standalone book in Nassim Nicholas Taleb’s landmark Incerto series, an investigation of opacity, luck, uncertainty, probability, human error, risk, and decision-making in a world we don’t understand. The other books in the series are Fooled by Randomness, The Black Swan, Skin in the Game, and The Bed of Procrustes. Nassim Nicholas Taleb, the bestselling author of The Black Swan and one of the foremost thinkers of our time, reveals how to thrive in an uncertain world. Just as human bones get stronger when subjected to stress and tension, and rumors or riots intensify when someone tries to repress them, many things in life benefit from stress, disorder, volatility, and turmoil. What Taleb has identified and calls “antifragile” is that category of things that not only gain from chaos but need it in order to survive and flourish. In The Black Swan, Taleb showed us that highly improbable and unpredictable events underlie almost everything about our world. In Antifragile, Taleb stands uncertainty on its head, making it desirable, even necessary, and proposes that things be built in an antifragile manner. The antifragile is beyond the resilient or robust. The resilient resists shocks and stays the same; the antifragile gets better and better. Furthermore, the antifragile is immune to prediction errors and protected from adverse events. Why is the city-state better than the nation-state, why is debt bad for you, and why is what we call “efficient” not efficient at all? Why do government responses and social policies protect the strong and hurt the weak? Why should you write your resignation letter before even starting on the job? How did the sinking of the Titanic save lives? The book spans innovation by trial and error, life decisions, politics, urban planning, war, personal finance, economic systems, and medicine. And throughout, in addition to the street wisdom of Fat Tony of Brooklyn, the voices and recipes of ancient wisdom, from Roman, Greek, Semitic, and medieval sources, are loud and clear. Antifragile is a blueprint for living in a Black Swan world. Erudite, witty, and iconoclastic, Taleb’s message is revolutionary: The antifragile, and only the antifragile, will make it. Praise for Antifragile “Ambitious and thought-provoking . . . highly entertaining.”—The Economist “A bold book explaining how and why we should embrace uncertainty, randomness, and error . . . It may just change our lives.”—Newsweek
Download or read book X Events written by John L. Casti and published by Harper Collins. This book was released on 2012-06-12 with total page 438 pages. Available in PDF, EPUB and Kindle. Book excerpt: A necessary and thought-provoking read for the age of coronavirus, exploring eleven scenarios that may trigger the collapse of the modern world — from pandemics to nuclear apocalypse to robot uprisings — and what we can do to prevent and survive them. In the twenty first century, our world has become impossibly complicated, relying on ever more advanced technology that is developing at an exponential rate. Yet it is a fact of mathematical life that higher and higher levels of complexity lead to systems that are increasingly fragile and susceptible to sudden, spectacular collapse. In this highly provocative and grippingly readable book, John Casti brilliantly argues that today’s advanced, overly complex societies have grown highly vulnerable to extreme events that will ultimately topple civilization like a house of cards. Like Nassim Taleb’s The Black Swan meets Jared Diamond’s Collapse, Casti’s book provides a much-needed wake-up call, sounding a fascinating and frightening warning about civilized society’s inability to recover from a global catastrophe. An eye-opening and necessary read, X-Events is a shocking look at a world teetering on the brink of collapse, and a population under constant threat from pandemic viruses, worldwide communication breakdowns, nuclear winter, or any number of unforeseeable “X-Events.” Fascinating and chilling, X-Events provides a provocative tour of the catastrophic outlier scenarios that could quickly send us crashing back to the preindustrial age – and shows that they may not be as far-fetched as they seem.
Download or read book The Gray Rhino written by Michele Wucker and published by St. Martin's Press. This book was released on 2016-04-05 with total page 288 pages. Available in PDF, EPUB and Kindle. Book excerpt: The #1 English-language bestseller in China--the book that is shaping China's planning and policy for the future. A "gray rhino" is a highly probable, high impact yet neglected threat: kin to both the elephant in the room and the improbable and unforeseeable black swan. Gray rhinos are not random surprises, but occur after a series of warnings and visible evidence. The bursting of the housing bubble in 2008, the devastating aftermath of Hurricane Katrina and other natural disasters, the new digital technologies that upended the media world, the fall of the Soviet Union...all were evident well in advance. Why do leaders and decision makers keep failing to address obvious dangers before they spiral out of control? Drawing on her extensive background in policy formation and crisis management, as well as in-depth interviews with leaders from around the world, Michele Wucker shows in The Gray Rhino how to recognize and strategically counter looming high impact threats. Filled with persuasive stories, real-world examples, and practical advice, The Gray Rhino is essential reading for managers, investors, planners, policy makers, and anyone who wants to understand how to profit by avoiding getting trampled.
Download or read book The Right Way to Flourish written by John Ehrenfeld and published by Routledge. This book was released on 2019-10-08 with total page 264 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this ground-breaking book, pre-eminent thought leader in the fields of sustainability and flourishing, John R. Ehrenfeld, critiques the concept of sustainability as it is understood today and which is coming more and more under attack as unclear and ineffective as a call for action. Building upon the recent work of cognitive scientist, Iain McGilchrist, who argues that the human brain’s two hemispheres present distinct different worlds, this book articulates how society must replace the current foundational left-brain-based beliefs – a mechanistic world and a human driven by self interest – with new ones based on complexity and care. Flourishing should replace the lifeless metrics now being used to guide business and government, as well as individuals. Until we accept that our modern belief structure is, itself, the barrier, we will continue to be mired in an endless succession of unsolved problems.
Download or read book Fooled by Randomness written by Nassim Nicholas Taleb and published by Random House. This book was released on 2008-10-14 with total page 369 pages. Available in PDF, EPUB and Kindle. Book excerpt: Fooled by Randomness is a standalone book in Nassim Nicholas Taleb’s landmark Incerto series, an investigation of opacity, luck, uncertainty, probability, human error, risk, and decision-making in a world we don’t understand. The other books in the series are The Black Swan, Antifragile, Skin in the Game, and The Bed of Procrustes. Fooled by Randomness is the word-of-mouth sensation that will change the way you think about business and the world. Nassim Nicholas Taleb–veteran trader, renowned risk expert, polymathic scholar, erudite raconteur, and New York Times bestselling author of The Black Swan–has written a modern classic that turns on its head what we believe about luck and skill. This book is about luck–or more precisely, about how we perceive and deal with luck in life and business. Set against the backdrop of the most conspicuous forum in which luck is mistaken for skill–the world of trading–Fooled by Randomness provides captivating insight into one of the least understood factors in all our lives. Writing in an entertaining narrative style, the author tackles major intellectual issues related to the underestimation of the influence of happenstance on our lives. The book is populated with an array of characters, some of whom have grasped, in their own way, the significance of chance: the baseball legend Yogi Berra; the philosopher of knowledge Karl Popper; the ancient world’s wisest man, Solon; the modern financier George Soros; and the Greek voyager Odysseus. We also meet the fictional Nero, who seems to understand the role of randomness in his professional life but falls victim to his own superstitious foolishness. However, the most recognizable character of all remains unnamed–the lucky fool who happens to be in the right place at the right time–he embodies the “survival of the least fit.” Such individuals attract devoted followers who believe in their guru’s insights and methods. But no one can replicate what is obtained by chance. Are we capable of distinguishing the fortunate charlatan from the genuine visionary? Must we always try to uncover nonexistent messages in random events? It may be impossible to guard ourselves against the vagaries of the goddess Fortuna, but after reading Fooled by Randomness we can be a little better prepared. Named by Fortune One of the Smartest Books of All Time A Financial Times Best Business Book of the Year
Download or read book The Black Swan written by Nassim Nicholas Taleb and published by Random House Digital, Inc.. This book was released on 2009-10-13 with total page 388 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the author's point of view, a black swan is an improbable event with three principal characteristics - It is unpredictable; it carries a massive impact; and, after the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was. Why do we not acknowledge the phenomenon of black swans until after they occur? Part of the answer, according to Taleb, is that humans are hardwired to learn specifics when they should be focused on generalities. We concentrate on things we already know and time and time again fail to take into consideration what we don't know. We are, therefore, unable to truly estimate opportunities, too vulnerable to the impulse to simplify, narrate, and categorize, and not open enough to rewarding those who can imagine the 'impossible'.
Download or read book The Beginning of Infinity written by David Deutsch and published by Penguin UK. This book was released on 2011-03-31 with total page 571 pages. Available in PDF, EPUB and Kindle. Book excerpt: 'Science has never had an advocate quite like David Deutsch ... A computational physicist on a par with his touchstones Alan Turing and Richard Feynman, and a philosopher in the line of his greatest hero, Karl Popper. His arguments are so clear that to read him is to experience the thrill of the highest level of discourse available on this planet and to understand it' Peter Forbes, Independent In our search for truth, how far have we advanced? This uniquely human quest for good explanations has driven amazing improvements in everything from scientific understanding and technology to politics, moral values and human welfare. But will progress end, either in catastrophe or completion - or will it continue infinitely? In this profound and seminal book, David Deutsch explores the furthest reaches of our current understanding, taking in the Infinity Hotel, supernovae and the nature of optimism, to instill in all of us a wonder at what we have achieved - and the fact that this is only the beginning of humanity's infinite possibility. 'This is Deutsch at his most ambitious, seeking to understand the implications of our scientific explanations of the world ... I enthusiastically recommend this rich, wide-ranging and elegantly written exposition of the unique insights of one of our most original intellectuals' Michael Berry, Times Higher Education Supplement 'Bold ... profound ... provocative and persuasive' Economist 'David Deutsch may well go down in history as one of the great scientists of our age' Scotsman
Download or read book Before the Collapse written by Ugo Bardi and published by Springer Nature. This book was released on 2019-10-17 with total page 242 pages. Available in PDF, EPUB and Kindle. Book excerpt: Nobody has to tell you that when things go bad, they go bad quickly and seemingly in bunches. Complicated structures like buildings or bridges are slow and laborious to build but, with a design flaw or enough explosive energy, take only seconds to collapse. This fate can befall a company, the stock market, or your house or town after a natural disaster, and the metaphor extends to economies, governments, and even whole societies. As we proceed blindly and incrementally in one direction or another, collapse often takes us by surprise. We step over what you will come to know as a “Seneca cliff”, which is named after the ancient Roman philosopher, Lucius Annaeus Seneca, who was the first to observe the ubiquitous truth that growth is slow but ruin is rapid. Modern science, like ancient philosophy, tell us that collapse is not a bug; it is a feature of the universe. Understanding this reality will help you to see and navigate the Seneca cliffs of life, or what Malcolm Gladwell called “tipping points.” Efforts to stave off collapse often mean that the cliff will be even steeper when you step over it. But the good news is that what looks to you like a collapse may be nothing more than the passage to a new condition that is better than the old. This book gives deeper meaning to familiar adages such as “it’s a house of cards”, “let nature take its course”, “reach a tipping point”, or the popular Silicon Valley expression, “fail fast, fail often.” As the old Roman philosopher noted, “nothing that exists today is not the result of a past collapse”, and this is the basis of what we call “The Seneca Strategy.” This engaging and insightful book will help you to use the Seneca Strategy to face failure and collapse at all scales, to understand why change may be inevitable, and to navigate the swirl of events that frequently threaten your balance and happiness. You will learn: How ancient philosophy and modern science agree that failure and collapse are normal features of the universe Principles that help us manage, rather than be managed by, the biggest challenges of our lives and times Why technological progress may not prevent economic or societal collapse Why the best strategy to oppose failure is not to resist at all costs How you can “rebound” after collapse, to do better than before, and to avoid the same mistakes.
Download or read book Employee to Entrepreneur written by Steve Glaveski and published by John Wiley & Sons. This book was released on 2019-01-09 with total page 304 pages. Available in PDF, EPUB and Kindle. Book excerpt: Make the leap and become an entrepreneur today Are you living for the weekend? Are you dissatisfied at work? Are you itching to do something that is important to you? How can you avoid the pitfalls that many first-time entrepreneurs have fallen into? How do you explore whether entrepreneurship is right for you without giving up your day job? Employee to Entrepreneur is your guide to leaving your job behind and building something for yourself. Author and employee-turned-entrepreneur Steve Glaveski, shows you how to navigate the challenges, find the entrepreneurial success that is right for you and become a better person along the way. Employee to Entrepreneur combines storytelling with a step-by-step framework to teach you how to effectively explore and leverage entrepreneurship to gain freedom, fulfillment and financial security. understand what you want to do by first understanding yourself explore if entrepreneurship is right for you without giving up your day job avoid the common pitfalls faced by first-time entrepreneurs fund, test and prioritise your ideas in a fast and cost-effective way develop the mindset to succeed in your business. If you’re ready to leave your cushy employee life behind and build a business and a life you believe in, reading this essential guidebook is your first step to making it happen.
Download or read book The New Evolution Diet written by Arthur De Vany and published by Rodale Books. This book was released on 2011-12-20 with total page 226 pages. Available in PDF, EPUB and Kindle. Book excerpt: Believe it or not, our DNA is almost exactly the same as that of our ancestors. While scientific advances in agriculture, medicine, and technology have protected man, to some degree, from dangers such as starvation, illness, and exposure, the fact remains that our cave-dwelling cousins were considerably healthier than we are. Our paleolithic ancestors did not suffer from heart disease, diabetes, high blood pressure, or obesity. In fact, a good deal of what we view as normal aging is a modern condition that is more akin to disease than any natural state of growing older. Our predecessors were incomparably better nourished than we are, and were incredibly physically fit. And certainly none of them ever craved a doughnut, let alone tasted one. In fact, the human preference for sweet tastes and fatty textures was developed in an environment where such treats were rare, and signaled dense, useful energy. This once-helpful adaptation is the downfall of many a dieter today. It's what makes it hard to resist fats and sweets, especially when they are all around us. We are not living as we were built to live. Our genes were forged in an environment where activity was mandatory—you were active or you starved or were eaten. This created strong selective pressure for genes encoding a smart, physically adept individual capable of very high activity levels. Humans are among the most active of species, and we carry energetically expensive brains to boot. Our energy expenditures rank high among all animals. At least they once did. The New Evolution Diet by Arthur De Vany, PhD is a roadmap back to the better health our ancestors once enjoyed. By eliminating modern foods, including carbohydrates, dairy, and all processed foods from our diets, we can undo much of the damage caused by our modern food environment. The plan is based on three simple principles: 1. Enjoy the pleasure of food and do not count or restrict calories. Eat three satisfying meals a day filled with non-starchy vegetables, fruits, and high-quality, lean proteins 2. Do not starve yourself, but do go hungry episodically, for brief periods, to promote a low fasting blood insulin level and increase metabolic fat-burning. 3. Exercise less, not more, but with more playfulness and intensity. The goal is to create a strong body with a high resting metabolism and a large physiologic capacity to move through life easily—not to burn calories.
Download or read book Incerto 4 Book Bundle written by Nassim Nicholas Taleb and published by Random House. This book was released on 2016-01-26 with total page 1377 pages. Available in PDF, EPUB and Kindle. Book excerpt: Nassim Nicholas Taleb’s landmark Incerto series is an investigation of luck, uncertainty, probability, opacity, human error, risk, disorder, and decision-making in a world we don’t understand, in nonoverlapping and standalone books. All four volumes—Antifragile, The Black Swan, Fooled by Randomness, and the expanded edition of The Bed of Procrustes, updated with more than 50 percent new material—are now together in one ebook bundle. ANTIFRAGILE “Startling . . . richly crammed with insights, stories, fine phrases and intriguing asides.”—The Wall Street Journal Just as human bones get stronger when subjected to stress and tension, many things in life benefit from disorder, volatility, and turmoil. What Taleb has identified and calls “antifragile” is that category of things that not only gain from chaos but need it in order to survive and flourish. The resilient resists shocks and stays the same; the antifragile gets better and better. What is crucial is that the antifragile loves errors, as it incurs small harm and large benefits from them. Spanning politics, urban planning, war, personal finance, economic systems, and medicine in an interdisciplinary and erudite style, Antifragile is a blueprint for living in a Black Swan world. THE BLACK SWAN “[A book] that altered modern thinking.”—The Times (London) A black swan is a highly improbable event with three principal characteristics: It is unpredictable; it carries a massive impact; and, after the fact, we concoct an explanation that makes it appear less random and more predictable. The astonishing success of Google was a black swan; so was 9/11. In this groundbreaking and prophetic book, Taleb shows that black swan events underlie almost everything about our world, from the rise of religions to events in our own personal lives, and yet we—especially the experts—are blind to them. FOOLED BY RANDOMNESS “[Fooled by Randomness] is to conventional Wall Street wisdom approximately what Martin Luther’s ninety-five theses were to the Catholic Church.”—Malcolm Gladwell, The New Yorker Are we capable of distinguishing the fortunate charlatan from the genuine visionary? Must we always try to uncover nonexistent messages in random events? Fooled by Randomness is about luck: more precisely, about how we perceive luck in our personal and professional experiences. Set against the backdrop of the most conspicuous forum in which luck is mistaken for skill—the markets—Fooled by Randomness is an irreverent, eye-opening, and endlessly entertaining exploration of one of the least understood forces in our lives. THE BED OF PROCRUSTES “Taleb’s crystalline nuggets of thought stand alone like esoteric poems.”—Financial Times This collection of aphorisms and meditations expresses Taleb’s major ideas in ways you least expect. The Bed of Procrustes takes its title from Greek mythology: the story of a man who made his visitors fit his bed to perfection by either stretching them or cutting their limbs. With a rare combination of pointed wit and potent wisdom, Taleb plows through human illusions, contrasting the classical views of courage, elegance, and erudition against the modern diseases of nerdiness, philistinism, and phoniness.
Download or read book Lecturing Birds on Flying written by Pablo Triana and published by John Wiley & Sons. This book was released on 2009-06-09 with total page 405 pages. Available in PDF, EPUB and Kindle. Book excerpt: LECTURING BIRDS ON FLYING For the past few decades, the financial world has often displayed an unreasonable willingness to believe that "the model is right, the market is wrong," in spite of the fact that these theoretical machinations were largely responsible for the stock market crash of 1987, the LTCM crisis of 1998, the credit crisis of 2008, and many other blow-ups, large and small. Why have both financial insiders (traders, risk managers, executives) and outsiders (academics, journalists, regulators, the public) consistently demonstrated a willingness to treat quantifications as gospel? Nassim Taleb first addressed the conflicts between theoretical and real finance in his technical treatise on options, Dynamic Hedging. Now, in Lecturing Birds on Flying, Pablo Triana offers a powerful indictment on the trustworthiness of financial theory, explaining—in jargon-free plain English—how malfunctions in these quantitative machines have wreaked havoc in our real world. Triana first analyzes the fundamental question of whether financial markets can in principle really be solved mathematically. He shows that the markets indeed cannot be tamed with equations, presenting a long and powerful list of obstacles to prove his point: maverick unlawful human actions rule the markets, unexpected and unimaginable events shape the markets, and historical data is not necessarily a trustworthy guide to the future of the markets. The author then examines the sources of origin of many prevalent theories and mathematical dictums. He details how the field of financial economics evolved from a descriptive discipline to an abstract one dedicated to technically concocting professors' own versions of how such a world should work. He goes on to explain how Wall Street and other financial centers became eager employers of scientists, and how scientists became eager employees of financial firms. Triana concludes with an in-depth discussion of the most significant historical episodes of theory-caused real-life market malaise, with a strong emphasis on the current credit crisis. In the end, Lecturing Birds on Flying calls for the radical substitution of good old-fashioned common sense in place of mathematical decision-making and the restoration to financial power of those who are completely unchained to the iron ball of classroom-obtained qualifications.
Download or read book Dynamic Hedging written by Nassim Nicholas Taleb and published by John Wiley & Sons. This book was released on 1997-01-14 with total page 536 pages. Available in PDF, EPUB and Kindle. Book excerpt: Destined to become a market classic, Dynamic Hedging is the only practical reference in exotic options hedgingand arbitrage for professional traders and money managers Watch the professionals. From central banks to brokerages to multinationals, institutional investors are flocking to a new generation of exotic and complex options contracts and derivatives. But the promise of ever larger profits also creates the potential for catastrophic trading losses. Now more than ever, the key to trading derivatives lies in implementing preventive risk management techniques that plan for and avoid these appalling downturns. Unlike other books that offer risk management for corporate treasurers, Dynamic Hedging targets the real-world needs of professional traders and money managers. Written by a leading options trader and derivatives risk advisor to global banks and exchanges, this book provides a practical, real-world methodology for monitoring and managing all the risks associated with portfolio management. Nassim Nicholas Taleb is the founder of Empirica Capital LLC, a hedge fund operator, and a fellow at the Courant Institute of Mathematical Sciences of New York University. He has held a variety of senior derivative trading positions in New York and London and worked as an independent floor trader in Chicago. Dr. Taleb was inducted in February 2001 in the Derivatives Strategy Hall of Fame. He received an MBA from the Wharton School and a Ph.D. from University Paris-Dauphine.
Download or read book Statistical Consequences of Fat Tails written by Nassim Nicholas Taleb and published by . This book was released on 2020-06-30 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The book investigates the misapplication of conventional statistical techniques to fat tailed distributions and looks for remedies, when possible. Switching from thin tailed to fat tailed distributions requires more than "changing the color of the dress." Traditional asymptotics deal mainly with either n=1 or n=∞, and the real world is in between, under the "laws of the medium numbers"-which vary widely across specific distributions. Both the law of large numbers and the generalized central limit mechanisms operate in highly idiosyncratic ways outside the standard Gaussian or Levy-Stable basins of convergence. A few examples: - The sample mean is rarely in line with the population mean, with effect on "naïve empiricism," but can be sometimes be estimated via parametric methods. - The "empirical distribution" is rarely empirical. - Parameter uncertainty has compounding effects on statistical metrics. - Dimension reduction (principal components) fails. - Inequality estimators (Gini or quantile contributions) are not additive and produce wrong results. - Many "biases" found in psychology become entirely rational under more sophisticated probability distributions. - Most of the failures of financial economics, econometrics, and behavioral economics can be attributed to using the wrong distributions. This book, the first volume of the Technical Incerto, weaves a narrative around published journal articles.