Debate: Black Swan Author Nassim Taleb vs Didier Sornette

(Last Updated On: May 22, 2014)


Debate: Black Swan Author Nassim Taleb vs Didier Sornette

From the NYC Contact so thanks to him

1) Your dynamic models are too sensitive to small input parameter changes, Power Laws/Distributions are very sensitive to change in alpha (tail exponent).

2) In the real world, an engineer needs an AntiFragile approach to building and testing a Bridge.

3) Dragon Kings are actually Gray Swans named by Taleb and Mandelbrot.

4) Your dynamic models can expose you to concave risk (i.e are fragile). Concave risk when exposed to a random variable has a negative nonlinear response and is therefore fragile.


1) My models don’t use Power Distributions, they use (here I’m not sure what he said, I think Stable distributions is what he uses).

2) Your AntiFragile Method is static, you lack the time dimension. An engineer needs to test the bridge dynamically in the time dimension (i.e tests need to be performed over time and under a variety of different weather conditions).
3) I like the Dragon King name, It sounds much better.

4) My models don’t give a precise time prediction thus they are not concave fragile, They allow you to estimate possible turning/inflection points where you can take convex/antifragile risks.

They both agree on the following:

1) Dynamic models are useful to estimate turning points/pockets of prediction in an otherwise non-predictive environment.

2) That you need Dynamic Modeling with a time dimension for identifying high probability trade setups,(but not for precise predictions), and you need a convex/AntiFragile approach when putting on actual trades.

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