Welcome to the Journey to Science of Complexity, Chaos Theory & Non Linear System Dynamics:

Here is to the crazy ones, the misfits, the rebels, the trouble makers the round pegs in a square hole, the ones who see things differently. They are not fond of rules and they have no respect for the status quo.You can quote them, disagree with them, glorify or vilify them. About the only thing that you can't do is ignore them, because they change things. They push the human race forward, and while some may see them a s crazy ones, we see genius, because the people who are crazy enough to think they can change the world, are the ones who'll do it. 

Apple Computer Advertising 1997

The Unknown World-Nassim Nicholas Taleb Interview on Business Week

Monday, May 25, 2009

The Poker Face of Wall Street- Scribd

The Poker Face of Wall Street

The Poker Face of Wall Street

I came across this great Book " The Poker Face of Wall Street" by Aaron Brown. It is turning out to be a great read. Incidentally, the foreword is written by Nassim Taleb. So, it automaticaly becomes a must read for all of Taleb's Fans. Here is a little piece from Taleb's foreword to the book:

"One would tend to think that gambling is a sterile activity that is
meant to occupy those who have not much else to do and others
when they have not much else to do. You would also think that there
is a distinction between “economic risk taking” and “gambling,” one
of them invested with respectability, the other treated as a vice and a
product of a parasitic activity."

Saturday, May 23, 2009

The Black Swan Recommended by Ilya Bogard

Here is an Excerpt from Ilya Bogard's "Lessons In Leadership: How to Instigate and Manage Change", published in Tech Republic.

"The most basic requirement for the success of a change you’re making is that it’s real and is interpreted correctly. This is not only because the change may fail, but because what good is an impeccably executed project if it accomplishes exactly what you should not be doing?


I trust you will agree with me that the world has changed dramatically in this short period of time. Scores of business titans have fallen or are fighting for survival, while opportunistic carpe diem challengers have moved ahead. Change is omnipresent and while some transformations are predictable, others have come from nowhere (for this reason, I recommend reading The Black Swan by Nassim Taleb, a read that is not only thought provoking but also immensely enjoyable).

If you’re in a leadership position, it’s incumbent on you to instigate and manage change within your organization. How do you go about it to ensure success?"

Read the Full Article on http://blogs.techrepublic.com.com/tech-manager/?p=1389

About Ilya Bogard:

Ilya Bogorad is the Principal of Bizvortex Consulting Group Inc, a management consulting company located in Toronto, Canada. Ilya specializes in building better IT organizations and can be reached at ibogorad@bizvortex.com or (905) 278 4753.

Tuesday, May 19, 2009

Myron Scholes' pathetic response to Nassim Taleb

Myron Scholes finally responded, in a pathetic manner, to Nassim Taleb's criticism. With Taleb now being the leader in revolt against the Modern House of Finance and Mathematical Models adopted to measure risk, had this to say about Myron Shcoles: "we have to unmask the charlatans of risk like Myron Scholes".Taleb was quite furious on Scholes. He considers Scholes as the Great Oz because his work on options and derivatives allowed the whole of the financial system to adopt poorly understood products-like the ones that brought AIG down-that hide risk. To Taleb, Scholes' academic work, which enabled the widespread use of complex derivatives, was like 'giving children dynamite.' 'This guy should be in a retirement home doing Sudoku,' Taleb says. 'His funds have blown up twice. He shouldn't be allowed in Washington to lecture anyone on risk.'" Michael Lewis too commented on hazards and harms that the use of Black Scholes Model has brought upon the financial health- "Black-Scholes didn’t work; trillions of dollars’ worth of securities may have been priced without regard to the possibility of crashes and panics. But until very recently, no one has bitched and moaned about this problem too loudly. Lay folk might harbor private misgivings about the clergy, but as lay folk, they are reluctant to express them. Now, however, as the subprime market unravels, the beginnings of a revolt against the church seem to be taking shape".

I had expected that the fathers of Financial Horoscope Models would come up with some decent answer or better still would admit the flaws in their Models with open heart. But, it looks like they dont have the gut and unfortunately still continue to live in fool's paradise. Still sticking to their guns they are not even sophisticated to give a decent reply. All Scholes could say to Taleb's criticism was " If someone says to you, “Go to an old-folks’ home,” that’s kind of ridiculous, because a lot of old people are doing terrific things for society. I never tried sudoku. Maybe he spends his time doing sudoku".

Wednesday, May 13, 2009

The Legend of Nassim Taleb Part 2

Somewhere on http://www.fooledbyrandomness.com Taleb is pessimistic about any change in the way the global house of finance and public policy operates. This he states as his fear despite the fact that The Black Swan has become an all time Bestselling Book in the fields of Economics or Finance. So I have started some research and trying to assess about the reach of Taleb's teachings and ideas. Further to my earlier post here are some more Books that discuss or incorporate Taleb's Ideas:

1- Derivatives: Models on Models By Espen Gaarder Haug. And here is how Haug describes Nassim: " Nassim Taleb was an original thinker a tail event himself, specializing in tail events. He was also not afraid of sharing his knowledge probably because he knew that human nature and the bonus system in most wall street firms would make most traders ignore his ideas anyway.

2- The Long Tail: Why the Future of Business is Selling Less of More
By Chris Anderson
3- Traders, guns & money: knowns and unknowns in the dazzling world of derivatives
By Satyajit Das
4- Identifying and Managing Project Risk By Tom Kendrick: The Author calls 'The Black Swans" the most serious problems.
5- Handbook for Surviving the Global Financial Crisis By Barbara Goldsmith. The Book seems to be a guide to survive the hazards of next black swan yet the author seems to have completely ignored what Taleb had to himself said in this regard.


Now that I have started it all, it is hard to stop. But it is becoming evident to me that Taleb and his Books have become a great source of reference for varied fields. I desperately need volunteers to continue and broaden the work.

Tuesday, May 12, 2009

The Legend of Nassim Taleb Part1

Taleb has proven in a very convincing manner as to why the Finance, Economics etc. are pseudo sciences. And why the game Bankers or Quants play i.e. taking large risks based on models or probabilities that do not work in the real world are bound to fail. Most of the critics of Taleb are unfair in that either they havent read the Black Swan or are biased in certain manner or it is their mental models that are hard to change. Taleb's contribution is so immense that it is bringing about a revolution in investment related professions, finance syllabi, management books etc. I am surprised to see how quickly his ideas have been adopted. Here are a few of the examples of books which have incorporated Taleb's Ideas in one way or another, and I am only referring to big ticket authors:

1- When Markets Collide by El Erian
2- Readings in Financial Institution Management by Tom Valentine, Guy Ford
- Sociology and Health: Peter Morall
3- The unthinkable: who survives wen disaster strikes and why by Amanda Ripley
4- Wealthwar and wisdom: Barton Brigg
5- Financial Armageddon: Michael J. Panzer
6- Jump the Curve: 50 essential strategies to help your company stay ahead of the curve
7- Beyond Value at Risk : Kevin Dowd

Taleb's biggest lesson in learning is " To learn the General and not Specific".

Monday, May 4, 2009

Bigger is Not Better

Taleb's Ten Principles to be Black Swan proof were not taken so seriously. Lots of Academics couldnt digest it and criticised these on one ground or another. Now here is Taleb in full technical form in association with Charles Tapiero. They establish why Large Institutions are more vulnerable. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1398102