Sunday 2 September 2012

Having recently re-read / re-listened to Nassim Taleb's books The Black Swan and Fooled By Randomness I began noticing some interesting points:

1. In Fooled By Randomness he talks about playing around with his Monte Carlo engine to create 'zorglubs' similar to how Richard Dawkin's describes evoluinoary methods in The Selfish Gene.

"My Monte Carlo engine took me on a few interesting adventures. While my colleagues were immersed in news stories, central bank announcements, earning reports, economic forecasts, sports results and, not least, office politics, I started toying with it in bordering fields to my home base of financial probability. A natural field of expansion for the amateur is evolutionary biology --the universality of its message and its application to markets are appealing. I started simulating populations of fast mutating animals called Zorglubs under climatic changes and witnessing the most unexpected of conclusions..."

Does anybody else think there is a relation here?

2. Taleb talks about maximising positive black swans which I took to mean an individual should look at ways to maximise one's options in life. That is, taking up options in all aspects of one's life, not just in the financial markets. For example, look out for options that you can take in negotiations that do not necessarily cost you to give up anything in return.

I've just finished listening to both of his books twice in a row and look to integrate some of his ideas into my investing life.

How have you found Taleb's works and have they benefitted you or not?