Not another “Black Swan”
I was disappointed with Nassim Nicholas
Taleb’s “Skin in the Game.” It is more a stream of consciousness than a path
breaking work. It would have been much better as a long magazine article. That,
at least, would have avoided his ceaseless repetitions as to why he hates
academics, economists, Robert Rubin, Goldman Sachs and Monsanto.
That said there are real kernels of the
book that are important. First as the title suggests that advice coming from
those who have who have no skin in the game is, at best, useless and at worse
harmful. Simply put those advisors suffer no consequences if they give bad
advice. Simply put this is Taleb’s “BS” detector. He next notes how tiny minorities
have the ability to enforce majoritarian preferences. For example making most
foods in the West Halal compliant is very important to Moslems but is not
material for non-Moslems so non-Moslems have no problem eating Halal compliant
foods.
Finally, and this is really important,
Taleb notes the difference from what I would characterize as inter-temporal
probability with cross sectional probability. His example is Russian roulette.
If 100 people played Russian roulette for a million dollars the expected value
of the individual payoff would be $833,000 (5 chances in 6 of surviving and
thus winning). However if one person played the same game with the same payoff
100 times, he/she would be dead. Thus the risk of ruin is understated in most
financial models. In other words you have to stay in the game in order to ultimately
win.
Thus if Taleb edited down his book into
a much smaller format I would have rated it much higher. However in its current
form it is a slog.
The full Amazon URL appears at: https://www.amazon.com/review/RBI1HVLIZVAY4/ref=pe_1098610_137716200_cm_rv_eml_rv0_rv
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