April 16, 2002
1:48 PM   Subscribe

Malcom Gladwell's got a new one in the New Yorker about a guy whose investment strategy positions him to profit from unlikely and scary random catastrophes like 9/11. Its' not on newyorker.com, but the story's subject was kind enough to scan it and post it.
posted by luser (8 comments total)
Even after reading the article, I'd still rather be Neiderhoffer than Taleb. Better to have made and lost a fortune (I've been there and do not regret a thing), to have lived a big life than to slowly bleed to death waiting for moments of redemption.

I mean the man has nervous tics. Also, I see bitterness when he writes of his number one hero, Richard Feyman, whom he defends as follows:

The only people who disliked him were the mediocre & second rate minds who concealed their mediocrity through seriousness, status and rank

Also, where's Karl Popper among his idols? Or, did Gladwell get this wrong?
posted by vacapinta at 3:04 PM on April 16, 2002

Unless I'm mistaken, Gladwell never mentions Fenyman but mentions Popper at least twice.
posted by solistrato at 3:16 PM on April 16, 2002

Great link Luser. Thanks'
posted by BentPenguin at 4:43 PM on April 16, 2002

They're all full of shit.
posted by mikegre at 4:46 PM on April 16, 2002

Very interesting article, luser, read it last night (couldn't follow the pdf, too difficult, so I waited till I could get the magazine). First time I ever heard of an approach such as this, how the hell did he get to a position where he can "bleed so much". Could not figure that part out. Thanks for pointing it out.
posted by bittennails at 6:19 AM on April 17, 2002

i liked how gladwell framed their options strategies in the metaphysical question of what one can know. like i think it's really fundamental, i mean especially when there's disagreement as to what probability even is.

i think taleb & co. are able to bleed so much because they make a killing when everyone else is wrong, which they believe happens periodically (and, more importantly, more often than other people believe -- the so called "fat tails"). but certainly there are liquidity issues that their investors must raise. like even by their own (anti-)logic it seems statistically that it's also possible "non-events" could keep on occurring longer than they can stay solvent.

btw re: popper (pooper :) i came across these discussions recently i thought were pretty interesting.
A critical history of research on artificial societies‚ is framed in the context of the "Positivist Dispute" (Positivismusstreit) between Karl Popper and Theodor Adorno. Both criticized the methodology of descriptive statistics, arguing that such analysis is just “scientific mirroring.” This unresolved debate prefigures themes in contemporary research on “artificial societies‚” such as the limitations of descriptive methods, the concept of alternative pathways of historical development, and the relationship between the individual and the collective. It is argued that simulation models have enabled researchers to (implicitly) address Popper's and Adorno's concerns through a shift in perspective, from the behavior of systems comprised of homogeneous actors, to that of dynamical systems with heterogeneous actors.
artificial societies and the social sciences by j. stephen lansing
I was discussing Popper and Kuhn and Lakatos yesterday with some acquaintances... I've always been a big fan of Lakatos and Kuhn. Imre Lakatos is less well-known --- he was Karl Popper's protege, but he ultimately discovered major problems with Popper's philosophy of science. He tried to save Popper's overall idea of a demarcation criterion, but ultimately Popper himself felt that if Lakatos was correct, Popper's ideas would have to be discarded. In the end Lakatos ended up much closer to Popper's nemesis, Thomas Kuhn, as well as Feyerabend, with whom Lakatos shared a warm friendship and a friendly intellectual rivalry. Proofs and Refutations by Lakatos is a classic work.
synthetic zero discussion with mitsu hadeishi!
posted by kliuless at 7:19 AM on April 17, 2002

This article proves Wall Street is just like any table in Vegas: the only way you get out with your shirt still on your back is to walk away after a big score.

Popper, Feynman..... now where was the reference to David "we have no evidence the sun will rise tomorrow" Hume?
posted by junkbox at 1:56 PM on April 17, 2002

here you go :)
That picture, though, as the eighteenth-century Scottish philosopher David Hume had been the first to insist, was always haunted by a small, permanent ghost of uncertainty: no matter how many times the apple fell down, one could never be entirely certain that someday an apple might not fall up. In the textbook example, if the law was "All swans are white" you could count white swans for centuries but still not know that all swans were white, not for sure. This caveat—Hume's "problem of induction"—seemed to most working scientists, however, to be one of those insoluble philosophical difficulties that haunt the game without actually spoiling the party.
also see error and the growth of experimental knowledge by deborah g. mayo!
posted by kliuless at 8:41 PM on April 17, 2002

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