Friday, December 31, 2010

Insurance: "COMMENT: The Black Swan guy is back, and he’s talking about you and me"

From Reactions Magazine:

There are lessons to be had for the insurance and reinsurance industry in Nassim Nicholas Taleb's new book, says Reactions contributing editor Garry Booth.
Read more: [Nassim Nicholas Taleb]

Nassim Nicholas Taleb, celebrated author of the Black Swan: The Impact of The Highly Improbable and, before that, Fooled By Randomness: The Hidden Role of Chance in Life and in the Markets, has got a new book out.

Like its predecessors, The Bed of Procrustes: Philosophical and Practical Aphorisms, will resonate strongly with risk practitioners in the insurance and reinsurance business.

Perhaps more importantly, this time Taleb’s philosophy is served up in bite sized chunks, so we could all get around to reading it. (Be honest, you haven’t read it, but how many times have you cited the Black Swan yourself, or nodded sagely when someone else dropped it in to the conversation?)

Taleb has a healthy disregard for financial services people and the journalists that write about finance, describing them variously as imbeciles, empty suits and philistines. But this new work wasn’t written as a collection of aphorisms simply to help unimaginative dunces like us “get it”.

Taleb says he is also rescuing the aphorism from the triteness with which it has become associated – the sort that is woven and framed on the wall of that Bed & Breakfast in Brighton perhaps?...MORE

So much of what he says could be aimed directly at the insurance underwriter, the broker, the modeler, the investor, the corporate risk manager, and the chief executive.
In fact, try attributing each of these examples to any of the aforementioned people above:

To bankrupt a fool, give him information.
In science you need to understand the world; in business you need others to misunderstand it.
An erudite is someone who displays less than he knows; a journalist and consultant, the opposite; most others fall somewhere in between.
It is as difficult to avoid bugging others with advice on how to exercise and other health matters as it is to stick to an exercise schedule.
Randomness is indistinguishable from complicated, undetected, and undetectable order; but order itself is undistinguishable from artful randomness.
Here at The PseudoProfound Group we believe...

Jan. 20, 2009
Technical Analysis: S&P Black Swan Formation

Lifted from BloggingStocks:

A message board poster has put this hilarious chart showing that S&P 500 could be in for a rough ride. He writes that "The very rare black swan formation - note both feet and neck are complete and the rare vampire tooth variation is in place. This is very bad. Very very bad."...