Friday, April 20, 2007

Nassim Nicholas Taleb "The Black Swan" Book Launch by marketsurfer & annaland

Last night we attended Nassim Taleb’s new book launch party for The Black Swan –The Impact of the Highly Improbable on Park Ave, NYC. The event was well attended with approximately 120 people. The audience included several heavy weight quantitative professionals such as Dr. Emanuel Derman. It was well orchestrated compared to the mad house of the George Soro’s signing event attended earlier in the year. Little touches like serving Black Swan wines, as a marketing tie in, and chocolate cookies added to the friendly, collegiate ambiance. The jovial crowd appeared to consist of academics, young suits, and various book types.

An animated and vocal Taleb took the stage first stressing that his new book was not about finance, then admitting that he does not like the subject and finds it exceedingly boring. In true Taleb fashion he began by ripping on history books by saying that most historians are bullsh!t artists and not to take any history book seriously. He added that historians and stock analysts share a similar trait – Bsing. During his speech, he raised the following question, “How many traders are in the room?” Sitting near the back of the room, we counted perhaps 8 hands—I was expecting a much larger representation of the trading community.

Nassim then jumped into the issue of retrospective distortion—using the recent VT shootings as fodder for his idea. By retrospective distortion he meant the way humans tend to evaluate and make sense of matters after the fact, constructing an orderly event in hindsight. . The more significant things he talked about included his belief that experts do not exist in complex domains, that using cumulative advantage loops and preferential advantage concepts is not a proper way to conceptualize black swans and perhaps his most interesting statement is that ALL design has its genesis in randomness—the implications of this idea are profound. He elaborated a little on several topics, then opened the floor up for questions.

Not surprisingly, the first question focused on Malcolm Gladwell’s New Yorker article regarding Niederhoffer and Taleb. He was visibly annoyed and without delay he stated that the article was an example of a “false narrative”—another concept he talks about in the book. He said that the article worked wonders for selling his book, but for the wrong reasons. However, he made it clear that the right reason for buying his book was boring. Taleb further affirmed that he absolutely does not wish to talk about Niederhoffer, quickly moving onto the next question.

He fielded questions about the central aspect of his new book claiming that the Normal and Gaussian distributions are frauds primarily because probabilities drop when moving away from the mean while with Mandelbrot’s variations this does not occur. He then was asked several specific financial questions, which he politely dodged and commented that he does not know what the Black Swan is or how to predict it. Time was up and the book signing began—several of the audience members carried a dozen or more books for his autograph. Not sure if they will be on eBay, but I’ll monitor for a bit to see if they end up there.

Taleb was over all very energetic and his aggravation, when Victor Niederhoffer was mentioned, was short-lived. He dropped the F bomb on several occasions quickly changing to proper words with a chuckle—not sure if this was done purely for effect or if its his natural vocabulary. Taleb’s lively delivery and overall friendly demeanor (except when Niederhoffer was mentioned) made it an entertaining and unique evening. My initial impressions of the book, after a cursory read, are that it appears interesting, well documented and entertaining although lacking in an academic discussion. I’m looking forward to further reading this week.

1 comment:

annaland said...

Here is a kosher summary of a great night:
The combination of surfer/taleb was entertaining, at the least. Taleb made some interesting and thought provoking statements and surf made sure to scribble them down, while I internalized his ideas and inhaled the surroundings. Following the book event, we met the 15inch hot dog and the $10 magical boiled chicken (that I still feel guilty about), which only topped off the intense after-party of reassurance schemes. I give the night 4 annaland stars.