Well - how interesting. You deigned to register an interest. I feel completely flattered to have the Man of Steel (in disguise) recognise my puny existence.
The following are excerpts from your post with my rejoinders.
"The Black Swan"
I read his 'Fooled by randomness' book. Nothing original there. All this stuff about fat-tails, extreme outliers, chaos theory etc has been done much better by others many years ago.
Really - by whom? Who did it better? And in whose opinion was it done better? In whose opinion did this unspecified person/s pull all the threads together in a better manner? Not just the little pieces enumerated one by one? But actually wrote in a more cogent, synthetic way which pulled all those themes together. Who was this person/s and if they did it why aren't they better known and why did Taleb's book go on to be such a best seller when someone else did it better. Why didn't this best seller just languish in the remainders bin because it was clear that so-and-so had done it all before. Really, Clark, "you just don't get it".
It might be good to remember, Clark, that all great thinkers respect the work on which their own contribution are founded. That is how knowledge works. Any great thinker is only too willing to recognise those who went before - and that their personal contribution is but a tiny morsel in the development of knowledge. And are only too willing to have their offerings assessed, criticised, and adjudged by their peers.
There is nothing of practical importance there.
Nothing of practical importance there? Really? Did he say it was of practical importance? Is pure research of practical importance? Isn't it done for itself alone? But - it often has the most unusual spin-offs - Black Swans in fact. That is the very point of his writing. But, as I said before - "you just don't get it". You really don't. In your epistemic arrogance. Just open yourself to some other viewpoints. This particular book was not written as a recipe book to be followed for those wishing to make mega-millions in the markets. It is a profound discussion of epistemological problems. Clearly, Clark, "you just don't get it".
Of the other points you made :
1. I would be the last person to be accused of using the past to predict the future. I am the quintessential investor. My outlook is prospective. Everything I do is about devining future developments, demographics and discounting those factors. If anyone was to be accused of peeking and data mining, it would be the charts/waves/chicken entrails brigade.
Absolutely Clark. But again "you just don't get it". "My outlook is prospective." Exactly. Condemned by the words you use to deride the chartists. You contradict yourself. The problem with your sneering at such activities is, first, you engage in such things yourself (as you admit), second, there are all sorts of chartists - using all sorts of methodologies - including some who use risk management techniques to minimise the effects of Black Swans. But "you just don't get it". You dont' see the differences in the vast universe you set out to deride nor do you see the similarities between yourself and those you set out to deride.
2. Did I predict the advent of globalisation, wireless internet etc 25 years ago ? No. I did however grasp its significance early enough to adapt. Someone quoted Maynard Keynes earlier on this thread. 100% correct. 'When the facts change, I change my opinion'
Yes - absolutely - and why? Again - "you just don't get it". While you are trumpeting your flexibility you are also continually trumpeting the ongoing invincibility of the WOW story. These two things just are not compatible. You are trapped by your own contradictions.
The second is a result of your epistemic arrogance - a high eminence from which you castigate those who, it appears, you think are a lower order of human being.
3. Of what practical importance is to plan for unforeseeable events ?
Oh my, oh my, oh my. So no one should take out insurance? Really Clark - you really are the living end. No one should take out insurance - did you all hear that. Insurance companies close down your shutters. Clark has spoken - you are totally irrelevant. Nobody needs you any more. Clark has decreed - There is no practical importance to plan for unforeseeable events.
Clark, "you just don't get it".
Very little. For all you know, if we get some sort of post-nuclear apocalypse, we'll all be equally stuffed regardless of how well we planned. The only winners could be some mutated bacteria. It is best to plan for the probable. This means that for the foreseeable future, 90% of the economy will be conducted in a manner similar to what we know. There will be banks. There will be insurance companies. There will be farming. There will be transport. There will be Schools, Hospitals etc etc etc.
Clark - tell that right now to the people in Myanmar. Clark, "you just don't get it".
As for the practical relevance of Taleb's Black Swan, fat tails, extreme outliers, chaos theory - he ran any number of investment activities based on these theories - and very successfully.
The following is from his CV:
Trading/Finance background: Was inducted in the Derivatives Strategy Derivatives Hall of Fame (Feb 2001). I was mostly a prop trader until 1993, then became more arbitrage oriented. I held positions of managing director and head trader at Union Bank of Switzerland, worldwide chief derivatives trader for currencies, commodities and non-dollar fixed income at CS-First Boston, chief currency derivatives trader for Banque Indosuez (age 25), Managing Director and worldwide head of financial option arbitrage at CIBC-Wood Gundy, derivatives arbitrage trader at Bankers Trust, proprietary trader at BNP-Paribas, as well as independent option market maker on the Chicago Mercantile Exchange (...). Owned Empirica LLC a trading operation (no, it is not a “hedge fund” in the common accepted sense as the bulk of the business consists in portfolio protection packages. We only called it a HF until October 2001). Also involved in Empirica Laboratory Limited in London. Current Corporate Boards: a few hedge funds.
Clearly his theories were of no practical relevance. All those activities - his theories were of no practical use? Clark, "you just don't get it".
Taleb frequently cites the fact that he is not taken seriously in academic circles - because he comes from the practical arena. The academics say: What would he know, he only has practical experience? That is the accusation thrown at him.
But Clark, you throw the opposite criticism at him. All that stuff is not practical.
