Antifragile

Anyone read it yet? seems to be generating intended reactions of disdain, which i like. probably some good nuggets for practitioners who deal with uncertainty on a daily basis, so i’ll check it out.

Please give us a synopsis. My book list continues to grow and even incorporating audiobooks and cutting tv, i think i would need 3 lives to complete this agenda.

This is all you need to take away from another NNT book:

2001: Fooled by Randomness

2002: S&P 500 returns -24%

2007: Black Swan

2008: S&P 500 returns -38%

2013: AntiFragile

2014:???

All the ingredients are there for a big sell off next year, probably catalyzed by Fed tapering. The Fed just keeps inflating the asset bubble with limited incremental positive results but larger and larger risks. They should have tapered before. Now they’re afraid of their own shadow after the 10 year spiked 100 bps at even the mention of tapering. NNT knows how to time a book release.

^ it looks like the chart has broken down. i believe the latest was actually published in 2012.

Antifragile: a description of Taleb’s larger-than-life ego. (Though that doesn’t mean he isn’t right, it just means he thinks he’s the only one that’s ever been right.)

NNT was just “early”.

Considering it’s been 5 straight up years for the market (2009-2013) with a few double digit years in there, I wouldn’t be surprised.

^ Actually, counting this year, it’s been 4 of the last 5 years that have been double digit gains.

Attended a lecture by him in Oxford a while back. I agree, the guy is full of himself. I enjoyed Fooled by Randomness and Black Swan but can’t bring myself to start his new book after knowing what a prick he is in person.

I understand the people that get turned off by Taleb’s style. He is not courting to the middle. But that is precisely why I like him. You ever not be able to stand a politician and it blows your mind how others cannot see this and support that politician? It is one of those things. You either agree with his worldview, or you don’t. If you don’t, he comes off as a real jerk. If you agree, then this guy speaks the truth.

In either event, OP, I have read Antifragile and it is sort of a continuation of the ideas espoused in Fooled by Randomness and The Black Swan. He goes from describing his view on the nature of reality and natural vs. man-made worlds, social systems, etc. in the first two books, to trying to piece together a framework for how to thrive in a world we don’t understand. It’s more philosophical than a bullet-point list of action items, but I think it is an interesting way to view the world. Set yourself up to benefit from shocks and volatility. Understand how to map and catalogue the world in terms of what is harmed by volatility, and what benefits from volatility. Never put yourself in a short-term stable position that can be threatened by a shock event. These are some of the general ideas he is talking about in this book, and they have more to do with everyday life than investments. I found the read worthwhile, personally.

I don’t know how many of you deal with stress testing, but I really liked this article by him. It discusses that rather than the levels resulting from the stress test, one should be more concerned with the convexity/duration of the stress test results. I think someone on this forum shared it with me but can’t remember. It’s short and good.

A New Heuristic Measure of Fragility and Tail Risks: Application to Stress Testing

http://www.imf.org/external/pubs/ft/wp/2012/wp12216.pdf

I actually use some of his points in there when discussing stress test modeling with those not as familiar with it, but are ultimately still responsible for understanding it. I’ve had pretty good success so far, especially this one:

Using an inaccurate tape measure will give a false reading of a child’s height (a level measurement). However, if one uses the same tape measure over time, it will give a reli able test of whether the child is growing (a second-order measurement). By the same token, most economic and financial models have limitations, but looking at the differences in estimated outcomes from any given model will be robust under fairly general conditions, thus pointing the stress tester in the right direction.