#691: Nassim N. Taleb & Scott Patterson — How Traders Make Billions in The New Age of Crisis, Defending Against Silent Risks, Personal Independence, Skepticism Where It (Really) Counts, The Bishop and The Economist, and Much More

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Nassim Nicholas Taleb (@nntaleb) spent 21 years
as a risk-taker (quantitative trader) before becoming a
researcher in philosophical, mathematical, and (mostly) practical
problems with probability.


Taleb is the author of a multivolume essay, the Incerto (The
Black Swan, Fooled by Randomness, Antifragile, The Bed of
Procrustes, and Skin in the Game), covering broad facets of
uncertainty. His work has been published into 49 languages.


In addition to his trader life, Taleb has also written, as a
backup of the Incerto, more than 70 technical and scholarly
papers in mathematical statistics, genetics, quantitative
finance, statistical physics, medicine, philosophy, ethics,
economics, and international affairs around the notion of risk
and probability (grouped in the Technical Incerto).


Taleb is currently Distinguished Professor of Risk Engineering at
NYU's Tandon School of Engineering (retired). His current focus
is on the properties of systems that can handle disorder
("antifragile").


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Scott Patterson (@pattersonscott) is an
investigative reporter for The Wall Street Journal, currently
based in Washington DC, working on climate and energy policy. His
new book is Chaos Kings: How Wall Street Traders Make
Billions in the New Age of Crisis, a profile of the rise
of “black-swan traders,” such as Nassim Taleb and Mark
Spitznagel, as well as a survey of the many perils the world
faces today—and how we might fix them.


Scott has covered everything from Berkshire Hathaway to stock
exchanges to high-speed traders to the financial regulators. His
first book, The Quants, describes the rise of mathematical
finance and delves into its role in the 2008 financial blowup.
Dark Pools, his second book, tells how computer traders took
control of the U.S. stock market, starting from the birth of
computer trading in the 1980s to the explosion of high-frequency
trading in the late 2000s.


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[09:44] How Scott and Nassim first connected.


[12:02] Why Nassim would rather be remembered as a scholar than a
trader.


[14:01] You can’t forge a new friendship without breaking a few
eggs.


[16:22] Silent risk, tail events, and one-trick ponies.


[25:56] What prompted Scott to write Chaos Kings?


[33:41] Pseudo-efficiency, pseudo-optimization, and
pseudo-sorries.


[36:49] The joy of writing a preemptive resignation letter.


[37:39] Developing resilience against criticism.


[40:33] Recurring patterns in successful investors.


[44:15] Nassim: contrarian, or simply independent?


[46:44] Jiving with skeptical turkeys.


[51:53] Living in the polycrisis.


[53:54] The precautionary principle.


[1:00:07] Fat tails, thin tails, and the COVID vaccine.


[1:11:03] GMO risks and Monsanto intimidation tactics.


[1:14:45] Implementing the precautionary principle at a large
scale.


[1:16:49] Uncertainty and the climate crisis.


[1:19:45] Convexity in the face of financial crisis.


[1:27:12] Are investors overpowered in an interconnected world?


[1:31:36] Utilizing the precaution principle in the real world
(for better and worse).


[1:36:53] The flow-on effect of having skin in the game.


[1:39:37] The ponzification of startups and an overdue reckoning.


[1:42:51] What convexity at the center of all things conveys.


[1:49:27] Where to find Scott and Nassim.


[1:50:44] What Nassim is working on now.


[1:53:37] New insights from ancient words.


[1:57:26] Parting thoughts.


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Past guests on The Tim Ferriss
Show include Jerry Seinfeld, Hugh
Jackman, Dr. Jane Goodall, LeBron James, Kevin
Hart, Doris Kearns Goodwin, Jamie Foxx, Matthew
McConaughey, Esther Perel, Elizabeth
Gilbert, Terry Crews, Sia, Yuval Noah
Harari, Malcolm Gladwell, Madeleine
Albright, Cheryl Strayed, Jim Collins, Mary
Karr, Maria Popova, Sam Harris, Michael
Phelps, Bob Iger, Edward Norton, Arnold
Schwarzenegger, Neil Strauss, Ken Burns, Maria
Sharapova, Marc Andreessen, Neil Gaiman, Neil de
Grasse Tyson, Jocko Willink, Daniel Ek, Kelly
Slater, Dr. Peter Attia, Seth Godin, Howard
Marks, Dr. Brené Brown, Eric Schmidt, Michael
Lewis, Joe Gebbia, Michael Pollan, Dr. Jordan
Peterson, Vince Vaughn, Brian Koppelman, Ramit
Sethi, Dax Shepard, Tony Robbins, Jim
Dethmer, Dan Harris, Ray Dalio, Naval
Ravikant, Vitalik Buterin, Elizabeth
Lesser, Amanda Palmer, Katie Haun, Sir Richard
Branson, Chuck Palahniuk, Arianna Huffington, Reid
Hoffman, Bill Burr, Whitney Cummings, Rick
Rubin, Dr. Vivek Murthy, Darren
Aronofsky, Margaret Atwood, Mark Zuckerberg, Peter
Thiel, Dr. Gabor Maté, Anne Lamott, Sarah
Silverman, Dr. Andrew Huberman, and many more.


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