Nassim Nicholas Taleb
From BookJive
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| Born: | 1960 |
| Died: | |
| Residence: | Dallas, Texas |
| School: | BSB University of France; MBA Wharton School, University of Pennsylvania; Ph.D. Université Paris-Dauphine |
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[edit] Bio
According to Investopedia, an Options Trader is “An individual working on the floor of an exchange whose function it is to watch a number of options traded on the exchange to ensure that they are being traded fairly, in fair market conditions. The individual may trade for him/herself or for other parties, but is under no obligation to 'make a market' for any options traded on the exchange.” An “option” is a contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specific price on or before a certain date. An option, just like a stock or bond, is a security. It is also a binding contract with strictly defined terms and properties. An option can also be a very high risk Options are powerful in that they are versatile, but that versatility comes with risks and it is not unusual for the trading of options to come with disclaimers that encourage using only risk capital.
As you can imagine, being an Options Trader can be a high adrenaline, high stress occupation and you need to understand that in order to understand Nassim Nicholas Taleb. Taleb became an options trader out of laziness. In an options theory class, he felt an immediate affinity for the product, finding it effortless to think about options. He figured it was a great way to be lazy, intuitive, and make a decent living. He describes his options trading as a hobby. It is worthy to note that he later quit the profession because it bored him.
Born in 1960 in Amioun, Lebanon, a Greek Orthodox community, the son of Dr. N. Taleb, an oncologist and researcher in anthropology, and Minerva Ghosn, Taleb’s family had a long history of prominent political positions within the Levantine. His maternal grandfather and great-grandfather were both deputy prime ministers of Lebanon. On his father’s side, his grandfather was a Supreme Court judge, and, in 1861, his 4-x great-grandfather was a governor of the Ottoman semi-autonomous province of Mount Lebanon. Many of these ancestors’ occupations would have a definitive effect on Taleb’s philosophies.
After attending the University of France, Taleb entered the Wharton MBA program at the University of Pennsylvania where he skipped as many classes as he attended. It was also while at Wharton that Taleb began to formulate his ideas regarding the aspects of randomness and its frequency in our society although it was during his years as a trader that he truly developed his philosophies. He quickly discovered that rare events were more frequent than people believed—and that when they happened, they cost a lost more than people expected they would.
After receiving his Ph.D. in financial mathematics (his dissertation on the transaction costs of forecasting volatility) from the Université Paris-Dauphine, Taleb continued to trade options, first currencies, then fixed income. In the late 1980’s and early 1990’s, he held senior trading positions at Banque Indosuez, Credit Suisse First Boston, Union Bank of Switzerland, and BNP Paribus. For the five years he was at CSFB, he was senior arbitrage trader for fixed-income and currency derivatives. He is currently Visiting Professor of Marketing at the London Business School, Adjunct Professor of Mathematics at the Courant Institute of New York University, the Dean’s Professor in the Sciences of Uncertainty at the Isenberg School of Management at the University of Massachusetts, Amherst, and affiliated faculty member at the Wharton Business School Financial Institutions Center. Taleb is also the founder and former owner of Empirica LLC, a firm that owns interests in hedge funds, provides portfolio protection strategies for hedge funds, and operates a research laboratory.
Taleb, who, at a very young age, experienced the beginning of the war in Lebanon, developed, not only because of the influence of his highly educated parents and extended family, a great love of literature and language—although he, admits, it gravitates toward the dead languages like Greek, Latin, and Aramaic. At age 10, he wanted to be a classicist and a man of letters and that ambition has not wavered despite his associations with the world of business.
He refers to himself as a “skeptical empiricist,” distrusting models and statisticians and having a complete contempt for finance academics. His books, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets and The Black Swan: The Impact of the Highly Improbable both center on society’s underestimation of random events as well as society’s misunderstanding of the concept of randomness. Taleb considers himself an Edge Activist—a member of the “literary and empirical community of scientists-philosophers”. The entirety of The Black Swan, a combination of autobiography, stories, histories, explanations, anecdotes, science, financial acumen, philosophy, sociology, anthropology, and academic and scholarly interpretation is concerned with the interconnection between chance and the dynamics of historical events on the one hand, and the cognitive biases embedded in human nature affecting our understanding of history on the other.
Taleb refers to his specialty as dealing “with problems of the applications of probability and epistemic issues, not financial advice.” Ever the student of philosophy, Taleb would consider his heaven spending his time reading books and cogitating. His hope (although even he sees it as a Black Swan (a rare, but probable event)) is that his books should be found to be pure philosophy, categorized as such in libraries and recognized as such by the majority.
[edit] Books
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