Friday, November 11, 2005

Nassim Taleb Interview

Weird that I checked Taleb's site the other night and found the Notebook. And then noticed I'm ranking #1 on blogsearch.google.com and #2 on Technorati.com for "Nassim Taleb" searches. From Technorati I found a recent interview with Taleb from SmartMoney.com here. Great interview by the way. Here are some of my favorite parts:
Psychologists ran experiments to see how people absorb information. In one experiment they found people who work with racehorses, and asked them to name up to 50 pieces of information they would need [to determine if it was going to be a winner]. They ranked them by order of importance. They took the 10 most important ones out of 50 and looked at the prediction of accuracy to determine if a horse will win a race. Then they took the 20 most important pieces, then the 30. In the end, you had no gain in predictive power beyond the first 10 pieces of information, but a huge gain of overconfidence...

It's the market that creates the indicator, not the indicator that creates the market.

To become Bill Gates you need more luck than skill. But to become a prosperous person, you need more skill than luck.

I believe Warren Buffett has skills, but probably two-thirds of it comes from an environment that helped him.

I am unable to predict markets, but I know it.

The favorite quote being the Bill Gates more luck than skill. I've referenced that type of thinking back in this post on Relativity by Dr. Mike Ott here. I strongly believe that environment makes up at least 2/3 of a person's success. The other 1/3? Ah, that's your edge.

Got Edge?

MT

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