Nassim Nicholas Taleb

Nassim Nicholas Taleb (Arabic: نسيم نيقولا نجيب طالب‎, alternatively Nessim or Nissim, born 1960) is a Lebanese American philosopher, essayist and practitioner of mathematical finance. He wrote the 2007 book The Black Swan, which a Sunday Times review described as one of the twelve most influential books since World War II.

He is a bestselling author, and has been a professor at several universities, currently at Polytechnic Institute of New York University and Oxford University.He has also been a hedge fund manager and Wall Street trader, and is currently a scientific adviser atUniversa Investments.

He criticized the risk management methods used by the finance industry and warned about financial crises, subsequently making a fortune out of the late-2000s financial crisis. He advocates what he calls a "black swan robust" society, meaning a society that can withstand difficult-to-predict events. He favors "stochastic tinkering" as a method of scientific discovery, by which he means experimentation and fact-collecting instead of top-down directed research.

Family background and education

Taleb was born in Amioun, Lebanon. He is a son of Dr. Najib Taleb, an oncologist and researcher in anthropology, and his wife Minerva Ghosn. His parents were Greek Orthodox Lebanese with French citizenship, and he attended a French school there, the Grand Lycée Franco-Libanais.His family saw its political prominence and wealth reduced by the Lebanese Civil War, which began in 1975. During the war, Taleb studied for several years in the basement of his family's home.

Both sides of his family were politically prominent in the Lebanese Greek Orthodox community. On his mother's side, his grandfather, Fouad Nicolas Ghosn, and his great-grandfather, Nicolas Ghosn, were both deputy prime ministers. His paternal grandfather was a supreme court judge; his great-great-great-great grandfather, Ibrahim Taleb, was a governor of the Ottoman semi-autonomous Mount Lebanon Governorate in 1861. The Taleb family Palazo, built in 1860 by Florentine architects for his great-great-great-great grandfather, still stands in Amioun.

Taleb received his bachelor and master in science degrees from the University of Paris. He holds an MBA from the Wharton School at the University of Pennsylvaniaand a PhD in Management Science (his thesis was on the mathematics of derivatives pricing) from the University of Paris (Dauphine) under the direction of Hélyette Geman.

A polyglot, Taleb has a literary fluency in English, French, and classical Arabic; a conversational fluency in Italian and Spanish; and can read classical texts in Greek,Latin, Aramaic, and ancient Hebrew, as well as the Canaanite scrip.

Finance career

Taleb considers himself less a businessman than an epistemologist of randomness, and says that he used trading to attain independence and freedom from authority. As a trader, his strategy has been to safeguard investors against crises while reaping rewards from rare events, and thus his trading career has included several jackpots followed by lengthy dry spells. Taleb was a pioneer of tail risk hedging (now sometimes called "black swan protection"),whereby investors are insured against extreme market moves. He says that reaping dividends the way he has means dwelling in the land of "Mediocristan" instead of "Extremistan", the latter being an environment where huge things (black swans) can happen to you, whereas Mediocristan is the land of dentists who earn an above average income but with less extreme variations.

He has held the following positions: managing director and proprietary trader at UBS; worldwide chief proprietary arbitrage derivatives trader for currencies, commodities and non-dollar fixed income atCS First Boston; chief currency derivatives trader for Banque Indosuez; 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; and founder of Empirica Capital, after which Taleb retired from trading and became a full-time author and scholar in 2004. Taleb is currently Principal/Senior Scientific Adviser at Universa Investments in Santa Monica, California, a tail protection firm owned and managed by former Empirica partner Mark Spitznagel.

Taleb reportedly became independent after the crash of 1987[32]and made a multi-million dollar fortune during the financial crisis that began in 2007, a development which he attributed to the mismatch between statistical distributions used in finance and reality. Universa is a fund which is based on the "black swan" idea and to which Taleb is a principal adviser. Separate funds belonging to Universa made returns of 65% to 115% in October 2008. In the wake of the economic crisis that started in 2008, Taleb has become an activist for a "black swan robust society.

Academic career

Taleb became a full time researcher in 2004, as a university professor. He is currently Distinguished Professor of Risk Engineering at Polytechnic Institute of New York University, Associate Member at the Institut Jean Nicod of the Ecole Normale Superieure in Paris and Distinguished Research Scholar, Said Business School, Oxford University.He was Visiting Professor at London Business School and the Dean's Professor in the Sciences of Uncertainty at the Isenberg School of Management at the University of Massachusetts Amherst, Adjunct Professor of Mathematics at the Courant Institute of New York University, and affiliated faculty member at the Wharton Business School Financial Institutions Center. He jointly teaches regular courses with Paul Wilmott and occasionally on the Certificate in Quantitative Finance. In 2008–2009, he ranked fifth in terms of the number of downloaded papers on the Social Science Research Network.

Literary and nontechnical books

• Taleb, Nassim Nicholas (2001/2005). Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets. New York: Random House and Penguin. ISBN 0-8129-7521-9.
• Taleb, Nassim Nicholas (2005). Le Hasard Sauvage. Paris: Les Belles Lettres. ISBN 2-251-44297-9. The French edition of Fooled by Randomness with revisions and changes to the English version.
• Taleb, Nassim Nicholas (2007/2010). The Black Swan: The Impact of the Highly Improbable. New York: Random House and Penguin. ISBN 978-1-4000-6351-2..The book was completed in 2010 with the second edition including a long essay "On Robustness and Fragility".
• Taleb, Nassim Nicholas (2010). Force et fragilité, reflexions philosophiques et empiriques. Paris: Les Belles Lettres.
• Taleb, Nassim Nicholas (2010). The Bed of Procrustes: Philosophical and Practical Aphorisms. New York: Random House. ISBN 978-1400069972.