Nassim Nicholas Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis
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Published 2023-09-07
Order Chaos Kings: How Wall Street Traders Make Billions in the New Age of Crisis:
www.amazon.com/Chaos-Kings-Street-Traders-Billions…
Resources from this episode: tim.blog/2023/09/07/nassim-nicholas-taleb-scott-pa…
Nassim Nicholas Taleb (@nntaleb) spent 21 years as a risk-taker (quantitative trader) before becoming a researcher in philosophical, mathematical, and (mostly) practical problems with probability.
Taleb is the author of a multivolume essay, the Incerto (The Black Swan, Fooled by Randomness, Antifragile, The Bed of Procrustes, and Skin in the Game), covering broad facets of uncertainty. His work has been published into 49 languages.
In addition to his trader life, Taleb has also written, as a backup of the Incerto, more than 70 technical and scholarly papers in mathematical statistics, genetics, quantitative finance, statistical physics, medicine, philosophy, ethics, economics, and international affairs around the notion of risk and probability (grouped in the Technical Incerto).
Taleb is currently Distinguished Professor of Risk Engineering at NYU's Tandon School of Engineering (retired). His current focus is on the properties of systems that can handle disorder ("antifragile").
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Scott Patterson (@pattersonscott) is an investigative reporter for The Wall Street Journal, currently based in Washington DC, working on climate and energy policy. His new book is Chaos Kings: How Wall Street Traders Make Billions in the New Age of Crisis, a profile of the rise of “black-swan traders,” such as Nassim Taleb and Mark Spitznagel, as well as a survey of the many perils the world faces today—and how we might fix them.
Scott has covered everything from Berkshire Hathaway to stock exchanges to high-speed traders to the financial regulators. His first book, The Quants, describes the rise of mathematical finance and delves into its role in the 2008 financial blowup. Dark Pools, his second book, tells how computer traders took control of the U.S. stock market, starting from the birth of computer trading in the 1980s to the explosion of high-frequency trading in the late 2000s.
00:00 Intro
00:36 How Scott and Nassim first connected.
03:14 Why Nassim would rather be remembered as a scholar than a trader.
05:23 You can’t forge a new friendship without breaking a few eggs.
07:57 Silent risk, tail events, and one-trick ponies.
18:39 What prompted Scott to write Chaos Kings?
27:31 Pseudo-efficiency, pseudo-optimization, and pseudo-sorries.
29:54 The joy of writing a preemptive resignation letter.
30:55 Developing resilience against criticism.
34:09 Recurring patterns in successful investors.
38:21 Nassim: contrarian, or simply independent?
41:08 Jiving with skeptical turkeys.
46:52 Living in the polycrisis.
54:22 The precautionary principle.
55:59 Fat tails, thin tails, and the COVID vaccine.
1:07:58 GMO risks and Monsanto intimidation tactics.
1:11:54 Implementing the precautionary principle at a large scale.
1:14:06 Uncertainty and the climate crisis.
1:17:11 Convexity in the face of financial crisis.
1:24:54 Are investors overpowered in an interconnected world?
1:29:58 Utilizing the precautionary principle in the real world (for better and worse).
1:36:14 The flow-on effect of having skin in the game.
1:38:51 The ponzification of startups and an overdue reckoning.
1:42:50 What convexity at the center of all things conveys.
1:50:05 Where to find Scott and Nassim.
1:51:29 What Nassim is working on now.
1:54:50 New insights from ancient words.
1:58:57 Parting thoughts.
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Tim Ferriss is one of Fast Company’s “Most Innovative Business People” and an early-stage tech investor/advisor in Uber, Facebook, Twitter, Shopify, Duolingo, Alibaba, and 50+ other companies. He is also the author of five #1 New York Times and Wall Street Journal bestsellers: The 4-Hour Workweek, The 4-Hour Body, The 4-Hour Chef, Tools of Titans and Tribe of Mentors. The Observer and other media have named him “the Oprah of audio” due to the influence of his podcast, The Tim Ferriss Show, which has exceeded 900 million downloads and been selected for “Best of Apple Podcasts” three years running.
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All Comments (21)
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So nice to see Nassim in 4K instead of 144p (his favorite resolution).
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Oh wow, I wasn’t expecting Nassim to show up to a podcast
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Best interview i've seen with Nassim because Tim let him talk and listened.
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Scot: "Nassim mentioned his contrarian nature" Nassim: interjects "It's not a contrarian nature, it's independence".
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This is an incredible podcast episode. I have seen podcasts where people come to discuss their books and ideas. But I don't think I have seen one like this. It is foundational thinking. The guests, the hosts, the subject matter - put together for a great episode so far. More like this, Tim.
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Ferriss has an innate ability to make his guests feel at peace and really talk about their ideas. A very rare skill.
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Tim Ferriss must be a real one to survive Nassim's legendary block list.
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This is a fat tailed event, NNT on a podcast! The man's books have changed my life. Well done Tim.
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Seeing Nassim living in his element here. Tells me he s in good company.
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Nassim freaking Taleb Been waiting forever for this one with Tim
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Wow Tim didn't realize you shared so much history with Taleb. I just finished Chaos Kings a couple of days ago, and am now currently waiting on Mark's book Safe Havens. This was a pleasant surprise, as initially when I saw you had tweeted this out, I at first was skeptical because Nassim is very selective on who he interviews with, but I am so surprised and impressed with the level of detail and wisdom Nassim brings to the table as always, as there is never a boring interview or exchange between him. He adds even more depth and background to the story as well after having read the book. Thank you for having him, definitely a memorable and informative interview.
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"If you have to panic, panic early. Panic NOW" - Nassim. Love it!
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Nassim effing Taleb on the Tim Ferriss Show. How awesome is that.
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Best Nassim interview ever, and therefore one of the best podcasts ever. Thank you Tim 🙌🏼
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I’m a huge fan of Aquinas myself, Nassim! But sadly, not in the original. Wow. This was such an amazing discussion. Really appreciated the closeness and comraderie of Scott and Nicholas. Almost reading each other’s minds.
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Never expected a podcast with Nassim
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You know it when the OGs NNT and tim discuss options and hack, exploring their works was perhaps the biggest inflection point of my life.
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This is such a rare treat to come across. Thank you Mr Ferriss
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“Venture capitalists are rich on companies that never made a penny” true indeed
