Flight of the Black Swan
The cover story of the May edition of the Bloomberg Markets magazine discusses Nassim Nicholas Taleb's affect on Wall Street:
On a freezing day in March 2007, Nassim Taleb walked into a conference room at Morgan Stanley's Manhattan offices on 47th Street and Broadway to address a group of the firm's risk managers. His message: Your models don't work.
Using a whiteboard to scribble out his calculations, Taleb, now 48, began one of his rants, this time against stress tests--Wall Street lingo for examining how a market rout will play out. Stress tests are inherently risky because they ignore rare but potentially devastating events, Taleb said.
It's always interesting to see what other investors or thinkers have on their bookshelf. In the introduction to the article, there's a picture of Nassim Taleb in his library. Using the hard copy, I picked out a few books that Taleb has read (or hasn't read, by Umberto Eco standards). These should be useful for expanding one's network of mental models:
Darwin's Dangerous Idea, by Daniel Dennett
Collapse, by Jared Diamond
Guns, Germs and Steel, by Jared Diamond
The Selfish Gene, by Richard Dawkins
Rational Herds, by Christophe Chamley
The Perception of Risk, by Paul Slovic
Knowledge and Decisions, by Thomas Sowell
Serendipity, by Royston Roberts
The Construction of Preference, by Sarah Lichtenstein and Paul Slovic
Evolutionary Dynamics, by Martin Nowak
The Quark and the Jaguar, by Murray Gell-Mann
Why Beauty is Truth, by Ian Stewart
The Eastern Origins of Western Civilization, by John Hobson
For and Against Method, by Imre Lakatos and Paul Feyerabend
Probability via Expectation, by Peter Whittle
Probability Theory, by E. T. Jaynes
Plight of the Fortune Tellers, by Riccardo Rebonato
Imperfect Knowledge Economics, by Roman Frydman and Michael Goldberg
The Business of Options, by Martin O'Connell
The Logic of Scientific Discovery, by Karl Popper
Unmaking the West, by Philip Tetlock
On another note, I have joined the team of authors at Reflections on Value Investing. If you haven't already, head over and subscribe to the RSS feed. It's a must for any value investor. Although this was posted at both sites, for the most part, my occasional posts at Reflections will have different content than FutureBlind.